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General: 800.ARBOR.10

Home | FHA Multifamily | 223(f) Refinance of Section 202
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FHA®223(f)

Refinance of HUD Section 202 Properties

Arbor provides FHA-insured, long-term, fixed-rate financing for refinance or moderate renovation of existing Section 202 projects nationwide. Arbor uses the single-stage Multifamily Accelerated Processing (MAP) program to expedite underwriting and approval.

Loan Term & Amortization Up to 35 years (fully amortizing)
Minimum DSCR 1.11x
Maximum LTV/Purchase Price Up to 90%
Fixed Rate Yes
Eligible Properties Existing Section 202 projects
Eligible Borrower Single asset entity (for profit or nonprofit)
Developer Fee Up to 15% of the acceptable development cost
Tax & Insurance Escrows Monthly deposits required
Recourse Nonrecourse, subject to HUD Regulatory Agreement
Commercial Space Maximum 25% of net rentable area and maximum 20% of effective gross income; 10% vacancy applied
Required Reports Appraisal, Project Capital Needs Assessment (PCNA) & Phase I Environmental
Prepayment Negotiable; generally two-year lockout with a 10% to 1% declining prepayment penalty; other prepayment options available
Assumable Subject to Arbor and HUD approval and payment of assumption fee
Good Faith Deposit Based on project type and loan size
Expense Escrow Yes – sufficient to cover Arbor’s expenses and third-party report costs
Origination Fee Negotiable
HUD Application Fee Nonrefundable fee of $3 per $1,000 (0.3%) of the mortgage amount due to HUD upon application submission
HUD Inspection Fee $30 per unit when repairs are less than $3,000 per unit; if above $3,000 per unit, 1% of the total cost of the repairs
Legal/Closing Fee Borrower pays Arbor’s counsel fee and miscellaneous closing costs
Rehabilitation Qualifications Repairs cannot exceed $15,000 per unit (adjusted for local high-cost factor); repairs/replacements are also limited to one major building component
Davis Bacon Not applicable to this program
HUD Mortgage Insurance Premium (MIP) HUD sets the cost of the FHA insurance; initial MIP is due to HUD at closing, and the MIP is escrowed monthly thereafter
Prepayment of Section 202 Loan HUD’s Housing Notice 2013-17 provides guidance for the prepayment approval process
HUD Mortgage Insurance Premium HUD sets the cost of the FHA insurance; initial MIP is 1% of the loan amount due to HUD at closing. Annual MIP rates:

  • Market rate properties: 0.60%
  • Affordable properties: 0.35%
  • Broadly affordable or energy efficient properties: 0.25%

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ARBOR.COM | 800.ARBOR.10
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