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GENERAL: 800.ARBOR.10

FHA®

223(a)(7)

Arbor provides streamlined refinancing of existing FHA-insured loans nationwide. Refinance costs, including prepayment, are included.

Loan Term & Amortization Remaining term of the existing loan plus up to 12 years (subject to HUD approval). Term cannot exceed the original term of the existing loan. The loan is fully amortizing through the term of the loan.
Loan Amount No cash out. New loan amount is the lowest of:

  1. Original principal balance of existing loan
  2. 100% of the costs to refinance (current principal balance plus transaction costs, repairs and deposits to replacement reserves)
  3. Minimum debt service coverage of 1.11 (1.05 for non-profit owners)
Interest Rate Fixed rate subject to market conditions at time of rate lock.
Eligible Properties Multifamily projects or healthcare facilities currently insured under Sections 220, 221(d), 223(f), 232 and 241 and 242.
Eligible Borrower Single Asset Entity (for profit or non-profit).
Cash Out Not allowed.
Tax & Insurance Escrows Monthly deposits to the escrows are required for property insurance, real estate taxes, reserves for replacement and mortgage insurance premiums.
Recourse Non-recourse.
Required Reports New Property Condition Needs Assessment (PCNA) required if last report is over two years old.
Prepayment Negotiable. Generally two-year lockout with a 10% to 1% declining pre-payment penalty. Other pre-payment options are available.
Assumable Subject to Arbor and HUD approval and payment of assumption fee.
Good Faith Deposit Negotiable
Expense Escrow Negotiable
Origination Fee Negotiable
HUD Application Fee 0.15% of the new loan amount paid to HUD with Firm Commitment Application.
HUD Inspection Fee Not applicable.
Legal/Closing Fee Borrower pays Arbor’s Counsel Fee and miscellaneous closing costs.
Repairs Repairs approved by HUD can be funded by mortgage proceeds with 10% Completion Assurance required from owner. Repairs are limited to $1,500 per unit.
Davis Bacon Not applicable to this program.
HUD Mortgage Insurance Premium HUD sets the cost of the FHA Insurance:

  • Market Rate Properties: 0.50% upfront, 0.50% annually
  • Affordable Properties: 0.35% upfront, 0.35% annually
  • Broadly Affordable or Energy Efficient Properties: 0.25% upfront, 0.25%
    annually

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