Multifamily Construction Loans

LIHTC: Low-Income Housing Tax Credits in Relation to HUD 221(d)(4) Loans

LIHTC: Low-Income Housing Tax Credits in Relation to HUD 221(d)(4) Loans

The Low-Income Housing Tax Credit (LIHTC) program, sometimes referred to as section 42, is a government initiative that encourages private investors to finance housing for low-income families and individuals. To do this, the LIHTC program provides an indirect federal subsidy in the form of a tax credit that a developer or investor can claim on their income tax return. 

DSCR: Debt Service Coverage Ratio in Relation to HUD 221(d)(4) Loans

DSCR: Debt Service Coverage Ratio in Relation to HUD 221(d)(4) Loans

When deciding whether to issue a loan to a borrower, one of the most important aspects a lender looks at is DSCR, or Debt Service Coverage Ratio. DSCR is a measurement of annual cash flow vs. annual debt obligations.

What are the terms and amortization of HUD multifamily construction loans/financing loans?

What are the terms and amortization of HUD multifamily construction loans/financing loans?

During construction, HUD multifamily construction loans are fixed and interest only (for up to 36 months). This is followed by an additional 40 years of fully amortized, fixed-rate payments. Altogether, there is a maximum term of 43 years, including construction.

Are the interest rates fixed with FHA 221(d)(4) loans?

Are the interest rates fixed with FHA 221(d)(4) loans?

One of the major benefits of a HUD/FHA 221(d)(4) loans is the fact that they have incredibly competitive interest rates. But are these interest rates fixed or variable? Let's take a look. 

Who is eligible to reside in HUD/FHA 221(d)(4) properties?

Who is eligible to reside in HUD/FHA 221(d)(4) properties?

If you're considering building or renovating a multifamily residential property with a HUD/FHA 221(d)(4) loan, you might be wondering if it restricts or limits the kinds of residents that can live in the development. And, in pretty much every case, the answer is no. 

How long does it take for an HUD 221(D)(4) application to be approved?

How long does it take for an HUD 221(D)(4) application to be approved?

Just how long does it take to process an HUD 221(d)(4) loan? That depends. For a MAP one-stage application, the process will take about 5-7 months, whereas, for a MAP two-stage application, the process is more likely to take around 8-10 months.