Full escrows for property taxes and all
applicable insurance are funded at closing
and must be maintained throughout the life of
A Replacement Reserve account must be
established at closing and is made available
for replacement of depreciable capital items.
An Operating Deficit escrow will be required
by HUD to cover operating losses until
sustaining occupancy is reached and funded
with cash or a letter of credit.
This is a non-recourse loan.
Long loan term - up to 40 years, fullyamortizing.
Low, fixed interest rates.
High loan-to-cost ratio up to 90% for rental
assistance; 87% for affordable; and 85%
for market projects.
Most affirmative and negative loan
covenants typically found in conventional
loan agreements are eliminated.
Converts to permanent financing upon
completion at no extra cost.
No low-income tenancy requirements.
Fully assumable subject to CMI and HUD
Can be used as a credit enhancement for
tax exempt bonds. Debt service coverage ratio of 111% for
rental assistance; 115% for affordable; and
118% for market rate projects.
Click here to download a PDF of this program.