An engineering report is an assessment of a property’s physical conditions and risks by an engineer and other specialists that could affect the property’s value. This report might contain issues or flaws found in the property. Like architectural reports, engineering reports are typically only required for HUD multifamily loans that finance new construction or substantial rehabilitation, such as the HUD 221(d)(4) loan, or the HUD 232 loan for senior healthcare properties.

An engineering report provides an assessment of a property’s physical conditions and risks by an engineer and other specialists that could affect the property’s value. This report might contain issues or flaws found in the property. To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form and a HUD lending expert will get in touch.

The benefits of obtaining an Engineering Report for a commercial real estate loan include:

• Identifying any potential issues or flaws in the property that could affect its value.
• Providing an accurate assessment of the property’s physical conditions and risks.
• Ensuring that the property meets the requirements of the loan program.

Engineering reports are typically only required for HUD multifamily loans that finance new construction or substantial rehabilitation, such as the HUD 221(d)(4) loan or the HUD 232 loan for senior healthcare properties.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form below and a HUD lending expert will get in touch.

The risks associated with not obtaining an Engineering Report for a commercial real estate loan include not being able to accurately assess the property’s physical conditions and risks that may affect the property’s soundness and value. Additionally, without an Engineering Report, you may not be aware of any issues or flaws associated with the property that could affect its value. It is important to speak with a qualified commercial real estate broker to discuss all of the risks and benefits associated with obtaining an Engineering Report before taking out a loan.

• Engineering Report
• Third-Party Reports Guidelines
• HUD Multifamily Construction Loans
• Gross Rent Multiplier

The cost of an engineering report for a commercial real estate loan can vary depending on the size and complexity of the project. According to Commercial Real Estate Loans, engineering reports are one of the third-party reports required for HUD 241(a) loans and can often be one of the biggest costs associated with the loan. In addition, HUD 241(a) loans typically require borrowers to pay financing/permanent placement fees at closing, which often come out to 3.5% of the loan amount.

The process for obtaining an Engineering Report for a commercial real estate loan is similar to the process for approving a commercial real estate mortgage. The exact process may vary depending on the lender’s policies, but here are the basic steps:

• Borrower submits loan application package to the lender.
• The lender reviews the loan application, and requests any further information from the borrower.
• An engineer and other specialists assess the property’s physical conditions and risks that may affect the property’s soundness and value.
• The engineer creates an Engineering Report.
• The loan application goes through the lender’s credit approval and underwriting process.
• On approval, borrower and lender discuss repayment terms and finalize the commercial mortgage.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form and a HUD lending expert will get in touch.