Repairs or capital improvements to be
completed after closing require a cash or
letter of credit escrow.
Full escrows for property taxes, all applicable
insurance and any special assessments are
funded at closing and must be maintained
throughout the life of the loan.
A Replacement Reserve account must be
established at closing and is made available
for replacement of depreciable capital items.
Long loan term - up to 35 years.
Low, fixed interest rates, fully amortizing.
Loan-to-value ratio up to 90% on rental
assistance; 87% on affordable; and 85% on
market rate projects.
Debt service coverage ratio of 1.11 on rental
assistance; 1.149 on affordable; and 1.1765
on market rate projects.
Cash-Out equity may be allowed and is
subject to the loan-to-value of 80%.
Loan is fully assumable subject to HUD and
Most affirmative and negative loan covenants
typically found in conventional loan
agreements are eliminated.
Davis Bacon prevailing wages not required.
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