High LTV Loans

Large HUD 221(d)(4) Loans: What You Need to Know

Large HUD 221(d)(4) Loans: What You Need to Know

While we mentioned in the loan facts section of this website that the minimum HUD 221(d)(4) loan is $2 million, and there is no upper limit, the reality can be a little bit more complex. While there technically is no financial ceiling for the program, particularly large loans are typically subject to stricter requirements, especially those involving DSCR and LTC

What are the Benefits of Non-Recourse Loans?

What are the Benefits of Non-Recourse Loans?

One of the biggest benefits of HUD 221(d)(4) loans for developers is the fact that they are non-recourse-- i.e., the lender cannot seize a borrower's personal property if they default on the loan. Instead, HUD multifamily construction loans are secured by collateral; in this case, the building and the property itself, which can be seized if the borrower defaults. 

HUD 221(d)(4) Loan Appraisals: What You Need to Know

HUD 221(d)(4) Loan Appraisals: What You Need to Know

One of the most important of the third-party reports required in the HUD 221(d)(4) application process is the appraisal, during which a qualified property appraiser will examine the development project to determine it's potential value, income, and profitability. This information has been taken directly from the HUD Multifamily Summary Appraisal Report

What are the Pros and Cons of HUD 221(d)(4) Loans?

What are the Pros and Cons of HUD 221(d)(4) Loans?

What are the pros and cons of HUD 221(d)(4) loans? It's a great question, since these HUD multifamily construction loans are incredibly attractive to a variety of developers and investors. 

LTV: Loan-to-Value Ratio in Relation to HUD 221(d)(4) Loans

LTV: Loan-to-Value Ratio in Relation to HUD 221(d)(4) Loans

Loan-to-value ratio (or LTV) is an assessment of risk that lenders use to determine the viability of a loan. Loans with higher LTVs are considered riskier, and therefore often have higher interest rates. Lenders believe that borrowers who have loans with higher LTVs have a greater likelihood of defaulting on their mortgages because of the lack of equity within the property. However, a higher LTV allowance means that investors and developers can get a sizable loan with less cash down.