Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects
Program Funding
Annual program obligations reported to SAM.gov.
Program Objective
To provide mortgage insurance to HUD-approved lenders for the purchase or refinancing of existing multifamily housing projects, whether conventionally financed or subject to federally insured mortgages at the time of application for mortgage insurance. The program allows for the long term mortgages that can be financed with Ginnie Mae Mortgage-Backed Securities.
Eligibility
Eligible Applicants
- For-Profit Organization
Both for profit and non-profit borrowers are eligible to apply.
Beneficiaries
- For-Profit Organization
All persons are eligible to occupy such projects subject to normal occupancy restrictions.
How to Apply
Award Procedure
If the project meets program requirements, the local HUD Multifamily Hub or Satellite Office issues the commitment to the lender to insure the project.
Processing time goals are to process 223(f) applications in 60 days excluding days that the lender is responding to questions posed by HUD.
Program details & compliance
Description
Section 223(f) allows FHA to insure lenders against loss on mortgage defaults. The program allows for long-term mortgages (up to 35 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage-Backed Securities. FHA insurance improves the availability of loan funds and permits more favorable interest rates and term/maturity.
Mission Categories
Primary: Property and Mortgage Insurance
Use of Funds
Allowed Uses
Section 223(f) insures lenders against loss on mortgage loans. These loans may be used to purchase or refinance existing multifamily housing projects. The property must contain at least 5 residential units with complete kitchens and baths and have been completed or substantially rehabilitated for at least 3 years prior to the date of the application for mortgage insurance. The program allows for non-critical repairs that must be completed within 12 months of loan closing. Projects requiring substantial rehabilitation are not acceptable under this section and may not involve the replacement of more than one major system. The remaining economic life of the project must be long enough to permit a ten-year mortgage. The mortgage term cannot exceed 35 years or 75 percent of the estimated life of the physical improvements, whichever is less. Davis Bacon prevailing wage requirements do not apply to this program. Mortgage sizing depends on certain characteristics of the project including affordability restrictions and will be based on loan-to-value and debt service coverage ratios that can be found in the multifamily web site's MAP Guide or HUDclips.
Restrictions
See MAP Guide
Required Documentation
Section 223(f) is eligible for Multifamily Accelerated Processing (MAP). The borrower/sponsor works with the MAP-approved lender who submits required exhibits for Firm Commitment application, including a full underwriting package to the local Multifamily Hub or Satellite Office for review. The Multifamily Hub or Satellite Office reviews the application to determine whether the proposed loan is an acceptable risk. Considerations include market need and the capabilities of the borrower. FHA underwriting analysis must determine that there is enough project income to repay the loan, taking into account all necessary project expenses. If the proposed project meets program requirements, the local Multifamily Hub or Satellite Office issues a commitment to the lender for mortgage insurance.
Reporting & Compliance
Applicable 2 CFR 200 Subparts
- Subpart F — Audit Requirements