What is Builder and Sponsor’s Profit and Risk Allowance (BSPRA)?
For HUD 221(d)(4) loans, Builder and Sponsor’s Profit and Risk Allowance (BSPRA) consists of an allowance of 10% of the estimated project cost. Since the mortgage calculation contains no builder profit, this allowance is used as a credit to the builder.
What are Basis Points?
Basis points are a common measurement to denote changes in interest rates and other financial percentages. 1% change = 100 basis points, and 0.01% = 1 basis point.