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.
Are HUD Multifamily Construction Loans Assumable?
If you take out an HUD loan to build a multifamily property and want to sell it, can the new owner simply take on your existing mortgage? The answer is yes-- as long as they get approval from the FHA.
Does FHA multifamily construction financing place limits on rehabilitation work?
If you're considering applying for a FHA/HUD 221(d)(4) loan to rehabilitate a multifamily property, it's important to realize that there minimum FHA/HUD multifamily project size limits that must be met. Otherwise, the project won't be considered large enough to be eligible for the loan.