FHA® 223(a)(7):
REFINANCE OF EXISTING HUD-INSURED LOAN
Arbor provides streamlined refinancing of existing FHA-insured loans nationwide. Refinance costs, such as prepayment, are included.
| Loan Term & Amortization | Remaining term of the existing HUD loan plus up to 12 years (subject to HUD approval); term cannot exceed the original term of the existing loan; loan is fully self-amortizing |
| Loan Amount | No cash-out; new loan amount is the lowest of:
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| 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, 241 and 242 |
| Eligible Borrower | Single asset entity (for profit or nonprofit) |
| 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 | Nonrecourse, subject to HUD Regulatory Agreement |
| Required Reports | New Property Condition Needs Assessment (PCNA) required if last report is over two years old |
| Prepayment | Typically 10% year 1, declining 1% per year; other prepayment options available subject to market conditions |
| Assumable | Subject to Arbor and HUD approval and payment of assumption fee |
| Good Faith Deposit | Negotiable based on loan size |
| Expense Escrow | Yes – sufficient to cover Arbor’s expenses and third-party report costs |
| 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 escrow; repairs are limited to $1,500 per unit |
| Davis Bacon | Not applicable to this program |
| HUD Mortgage Insurance Premium (MIP) | HUD sets the cost of the FHA Insurance
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