Applying for Multifamily FHA/HUD Financing
If you're interested in getting financing to construct or renovate a multifamily residential property, getting an FHA 221(d)(4) loan can be one of the most cost effective ways to do so. But, to get an FHA/HUD 221(d)(4) loan, you'll need to do significant preparation.
What You'll Need to Apply for an FHA/HUD 221(d)(4) Loan
The first part of the FHA/HUD 221(d)(4) loan application process is called pre-application. During this part of the process, you'll need to provide your HUD office with a variety of information about your project, including a general description of the project, Form HUD-92013, “Application for Multifamily Housing Project,” the resumes of the owner, key principals of the project, location maps, site plans, photographs, environmental assessments, as well as a variety of other HUD forms and documents.
What You'll Need for a Firm Commitment
The second part of the HUD 221(d)(4) loan application process is called firm commitment. At this point, the HUD has given general approval to the project based upon what they currently know, but they still need to see more documentation before everything is set in stone. To pass through the firm commitment process to full loan approval, you'll need documentation including a transmittal letter and an Application for Multifamily Housing Project (Form HUD-92013) which has a fee of $3 per $1000 of mortgage. Plus, you'll also have to pass an intergovernmental review. On top of that, you should contact your local HUD office to see who you need to contact in the state where the property is located (and if any additional reviews are required).
In addition, you'll need to fill out Byrd Amendment paperwork, which is intended to make sure no illegal lobbying or lobbyist-based conflicts of interest are likely to occur as a result of the project. And, you'll also need to submit Form HUD-92013, in which you must disclose any recent legal actions regarding parties involved in the project. This is especially important if the legal actions are related to delinquent federal debt.
The FHA/HUD 221(d)(4) loan application process is relatively complex-- and borrowers need to submit far more than the documents we've mentioned here. To check out the full list of documents you'll need to apply for an FHA/HUD 221(d)(4) loan, visit our FHA/HUD 221(d)(4) loan checklist.
Finding an FHA Licensed Lender
Remember, in addition to getting all your documentation and approval from HUD, you'll need to find an FHA licensed lender, usually before you begin the approval process. It’s important to keep in mind that the FHA/HUD only insures the loan, and is not actually responsible for loaning the borrower any money. Therefore, it's a good idea to discuss your project with multiple FHA licensed lenders, so you can understand more about process and the benefits and drawbacks of potential lenders.