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Top 10 Changes in the New MAP Guide

June 1, 2016

Posted in Industry News.

New LEAN Handbook

May 23, 2016

HUD released a new draft handbook for the Section 232 Healthcare Mortgage Insurance Programs that will offer new financing opportunities for healthcare borrowers. Some of the more noteworthy changes proposed in the new handbook include:

  • Improved Debt Seasoning Requirements
    The new debt seasoning requirements focus exclusively on the period of time needed for a project to demonstrate its ability to generate a sufficient level of cash flow to support the value and pay the debt service. What this means is that there is no longer an automatic two-year seasoning requirement, but rather tiered leverage depending on the use of the existing debt.
     
    % of Existing Debt Used for Project Purposes
    (vs. equity out)
    HUD Loan Amount
    ≤60% LTV
    HUD Loan Amount
    61-70% LTV
    HUD Loan Amount
    ≥71% LTV
    >50%
    No seasoning required
    No seasoning required
    2-year seasoning required
    ≤50%
    No seasoning required
    2-year seasoning required
    2-year seasoning required

    In order for the two-year seasoning requirement to not apply, value must be supported by 3+ years of stabilized historical cash flow which supports the market value.

  • Operator Debt Now Eligible
    Previously, all operator debt was considered ineligible for refinancing with HUD. Now, any operator debt tied directly to the project is considered eligible, including costs related to FF&E purchases, working capital related to lease-up and stabilization, and capital expenditures. Costs associated with AR lines of credit, acquiring beds or CON’s are still not eligible.
  • Identity of Interest (IOI) Purchase Debt
    Existing indebtedness related to the purchase of partnership interests are now immediately eligible for refinancing through HUD without the two-year seasoning period, so long as the seller has no residual rights to the project control and no residual rights to reacquire the project within 5 years of the HUD closing. The purchase must have occurred prior to date of the HUD firm commitment.

These are only a few of the exciting changes that are part of the revised 232 Handbook – there are many more! HUD has clearly demonstrated their ability to listen to the lender and borrower community in order to provide financing solutions that are more in line with market occurrences. These proposed changes will not go into effect until after the comment period has closed next month, but now is the best time to start exploring what these exciting changes could mean for you and your investments.

Posted in Industry News, Love Funding News.

VAHCDO Annual Conference

March 19, 2016

Director Ann Bolen will be attending the Virginia Association of Housing and Community Development Annual Conference April 27-29 in Hampton Road, VA. Ann has extensive experience working in affordable housing throughout the state of Virginia and looks forward to discussing your financing needs at the conference.

Posted in Industry News.

HUD Construction Financing

March 18, 2016

Learn more here.

Posted in Industry News.

Request for 2015 Audited Financial Statements

February 11, 2016

ATTENTION!

Every year, Borrowers must file an annual audited financial statement (AAFS) with HUD within ninety (90) days following the end of the Borrower’s fiscal year. Annual audited financial statements should be transmitted to HUD electronically through the Real Estate Assessment Center (REAC). In furtherance of Love Funding’s asset management responsibilities, please also submit a paper or electronic copy (preferred) to Love Funding Corporation by the applicable due date.

Instructions for Submitting Statements

AAFS may be submitted electronically to Love Funding at financialstatements@lovefunding.com

-OR-

Mail to:
Love Funding
Attn: Asset Management
45 N Fourth Street, Suite 100
Columbus, OH  43215

Questions?

Please direct any questions to Tina Pfeifer, Asset Manager, at tpfeifer@lovefunding.com or (202) 591-3682

 

Posted in Home Loan Closings Slider, Industry News, Love Funding News.

Exciting Changes at HUD

February 3, 2016

Posted in Industry News.

Reduced MIP Fees For Qualified Properties

February 2, 2016

For commitments issued or reissued beginning April 1, 2016, many transactions will now qualify for lower MIP rates. Additionally, HUD Deputy Director Dan Sullivan advised that if a loan is in processing (i.e. the loan did not and will not close before April 1), lenders may submit amended Firm Commitment Applications reflecting the new MIP if the lender anticipates closing the loan on or after April 1 and the property and financing terms meet relevant requirements.

Highlights include:

  • Broadly Affordable transactions will be reduced to 25 bps: Includes projects with 90% or greater of the units covered by either a Section 8 Project Based contract or affordability use restriction under the Low Income Housing Tax Credit Program.
  • Affordable* transactions will be reduced to 35 bps: Includes projects with between 10% to 90% of all units covered by either a Section 8 Project Based contract or affordability use restriction under the Low Income Housing Tax Credit Program.
    *HUD’s definition of Affordable has been broadened to include properties with inclusionary zoning, density bonus set-asides and other local affordability restrictions meeting the required tests. Please see your Love Funding originator for more detail.
  • Green/Energy Efficient Housing will be 25 bps. Qualified projects must:
    • Achieve (or will achieve and maintain) an industry recognized standard for green building. Examples of acceptable standards include Enterprise Green Communities Criteria, U.S. Green Building Council’s LEED-H, LEED-H Midrise, LEED-NC or ENERGY STAR Certification, to name a few.
    • Achieve (or will achieve) a score of 75 or better on the 1-100 Energy Star Score using EPA’s Portfolio Manager.
  • No change to Market Rate Housing, except those that meet the criteria for green and energy efficient housing.

Note that additional restrictions apply to many of these changes, such as the requirement for a minimum of 15 years remaining on the qualifying affordable use restriction and a requirement that owners agree to accept Section 8 vouchers on affordable transactions.

Posted in Industry News.

New MAP Guide Changes

February 1, 2016

HUD released the new MAP (Multifamily Accelerated Processing) Guide, which will take effect on May 28, 2016, and applies to all loans for which an initial application for Firm Commitment is submitted on or after the effective date.

Effective Date
Loans where the Firm Commitment application was submitted before the effective date of May 28, 2016, are subject to the provisions of the MAP Guide published in 2011; however, HUD will accept lender requests to revise Firm Commitment applications already in processing to reflect provisions of the revised Guide that are appropriate for a particular transaction. Similarly, Multifamily Regional Center and Hub Directors may consider requests to amend Firm Commitments already issued but not yet closed; such requests may or may not be approved depending on the specific transaction terms.

Explanation of Changes
A draft of the new MAP Guide was published in February 2015, and a series of conference calls was held to obtain public and industry feedback on the proposed MAP Guide revisions. HUD received over 4,000 comments. The most significant issues have been addressed and HUD’s response is summarized in this explanatory matrix. HUD will continue to consider edits and corrections in a future version.

Significant Changes
The updated MAP Guide has been under revision since February 2015, and Love Funding has been heavily involved in providing feedback on the proposed changes. Some of the most significant changes include:

  • The ability to provide more loan dollars for qualified properties due to less stringent coverage requirements and higher underwritten LTVs
  • The ability to include more repairs in your mortgage under section 223(f) due to an increase in the maximum per unit cost of rehabilitation allowed
  • More updates to come

Posted in Industry News.

From Our Newsletter: FHA Finance News You Can Use

October 29, 2015

150a967da33

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Love Funding has been busy this quarter expanding our interim financing options and introducing a new member of our team, La Fonte Nesbitt, as our General Counsel. We are excited to see the many ways in which these expanded capabilities will greatly benefit our valued customers. HUD also has several updates related to the LIHTC Pilot Program and the 232 queue that we are closely following. As we prepare for the Fall 2015 FHA Lenders Roundtable and future Love Funding quarterly newsletters, please send us suggestions for the news and updates you would like to know more about. Let’s start a conversation. Continued…

Posted in Industry News, Love Funding News.

Renters: Boomers vs. Millennials

September 21, 2015

Posted in Industry News.

Apartment Rent Growth Strong, But Will Be Tested

September 1, 2015

MBA-NewsLinkBy Michael Tucker
mtucker@mba.org

Apartment rents maintained their bullish growth in August, rising by $7 to a record $1,162, reported Yardi Matrix, Englewood, Colo.

“Perhaps more importantly, the numbers in August matched July’s 6.5 percent year-over-year increase, which indicates that rent growth does not seem to be slowing down,” said Yardi Matrix Vice President Jeffrey Adler.

But Adler said recent stock market volatility will pose a “significant test” to the apartment sector. “Although the major causes of the sudden 10 percent decline in stock values–the collapse of stock prices and currency depreciation in China, slower growth in emerging markets and fears that U.S. stocks were overvalued after a bull run–are not directly related to real estate, recent history demonstrates that exogenous shocks can play an outsized role in roiling the U.S. economy,” he said.

Continued…

Posted in Industry News.

Dealmaker of the Day

August 25, 2015

Love Funding, Washington, D.C., closed a $15.3 million loan to renovate a city block in downtown Cleveland to accommodate a new loft apartment community.

When completed, West 25th Street Lofts will offer 83 market-rate loft apartments in four adjacent buildings in Cleveland’s Ohio City neighborhood, including one constructed in 1866 to house the Jacob Beahr Brewery.

Love Funding Midwest Regional Director Bruce Gerhart secured the financing through HUD’s 221(d)(4) loan insurance program and federal and Ohio state historic preservation tax credits. HUD’s program provided the development team with low-rate non-recourse financing for construction and a subsequent 40-year term. The project also tapped two City of Cleveland funding programs.
Continued…

Posted in Industry News, Love Funding News.

Dealmaker of the Day

July 13, 2015

Love Funding, Washington, D.C., closed a $10.1 million refinancing loan for Court Square Center, a mixed-use development in downtown Memphis, Tenn.

Love Senior Director Artin Anvar secured the financing through FHA’s Section 223(f) loan insurance program.

“FHA’s 223(f) program is a non-recourse and fully assumable program,” Anvar said. “In this case it gave the borrowers a 35-year loan below 4 percent with 35-year amortization. The program allows leverage up to 83.3 percent, which also interested them.”

The new loan enabled the borrowers to pay off debt taken out to redevelop the property and preserve its historic character. Court Square Center was co-developed by the Memphis development team of John Basek, C. Yorke Lawson and consulting firm Chandler and Chandler, who worked with Telesis Corp. and New Community Partners, both of Washington, D.C.
Continued…

Posted in Industry News, Love Funding News.

Closing the Gap in Affordable Housing Development

June 29, 2015

Colorado Real estate Journal

by Peter Wessel

Over the past several years, market-based rental rates have crept up with construction costs. Not so for affordable rental units, though, because they are capped based on low and moderate incomes that have not risen commensurately. This mismatch has resulted in an increasing gap between the cost of developing a new affordable apartment project and the ability to finance its development.

Fortunately, there are a couple of new tools available to affordable housing developers to close the funding gap. They are not perfect but they can be viable solutions to help develop or preserve affordable properties – so long as you know how to navigate their complexities.
Continued…

Posted in Industry News, Love Funding News.

NAA Education Conference & Expo

June 11, 2015

Senior Director Robyn Cunningham and Director Adrian Hartman will be attending the National Apartment Association’s Education Conference & Expo June 24-27, 2015 in Las Vegas, NV. Join Robyn and Adrian at booth #1528 to learn about the many financing options available through FHA’s multifamily finance programs.

Posted in Industry News.

HUD’s role in rental affordability deserves more attention

March 12, 2015

The Hill

By Mark Dellonte

Our elected leaders on both sides of the political aisle are going to have a lot to say about President Obama’s proposed federal budget in the weeks and months ahead. But one area is likely to continue escaping attention in the wake of the proposal’s release: the availability of affordable rental housing.

The president’s budget request would increase funding for the Department of Housing and Urban Development – the agency tasked with providing American housing options and assisting community development – by $4 billion, or 8.7 percent, above current levels. The casual observer might assume the lion’s share of this increase will go to helping more Americans buy their own homes. On the contrary, the majority of the hike will go to fund programs that help renters afford to put a roof over their head.
Continued…

Posted in Industry News, Love Funding News.

U.S. Housing Policies No Longer Reflect Reality

March 10, 2015

MAR 9, 2015 8:00am ET via National Mortgage News

There is a problem with the U.S. housing market that few are willing to admit.

The country is experiencing job growth, unemployment rates have dropped and hourly wages have started to increase for lower-income workers. The overall U.S. economy has mostly recovered from the 2007-2009 recession. The housing sector has not.

It’s time for a new conversation about U.S. housing policies.

The U.S. Department of Housing and Urban Development’s goal in 2015 is to increase homeownership rates. But, there is a distinct possibility that homeownership rates will never return to their pre-recession levels given the number of young Americans who either cannot or will not buy homes.
Continued…

Posted in Industry News.

Implementation of Quarterly Operator Financial Statements

March 6, 2015

On March 6, 2015, Tim Gruenes, Director of Asset Management, Office of Residential Care Facilities, at HUD released a memo to all section 232 lenders/servicers, borrowers and operators.

Summary:

  • Quarterly balance sheets and income statements are required for all Section 232 FHA-insured projects.
  • If you operate on a calendar year, the reports must be sent to the Lender (via the online 232 Healthcare Portal or email) by May 31 for the first quarter of 2015.
  • The financial statements should be quarterly fiscal year-to-date and reflect operations at the facility level.
  • You will receive an email by March 9th to register for an online training about the 232 Healthcare Portal that may be used to submit the financial statements.

To read the entire memo, click the image below. Please contact financialstatements@lovefunding.com to learn more.

232-Operator-Financial-Statements-Memo-3-6-2015

Click to Learn More

Contact Us

Love Funding Asset Management
Phone: 844.344.LOVE
Email: financialstatements@lovefunding.com

Posted in Industry News.

From our Newsletter: Spread the Love

February 14, 2015

2014-Q3

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On Valentine’s Day, our thoughts turn to commitment, and we’d like to take this opportunity to talk about ours. At Love Funding, we are starting out 2015 by making changes to improve the level of service and products we can offer our existing and new clients. We were recently acquired by Midland States Bank, allowing us to expand our lending capabilities, bring our servicing group in-house and serve as a one stop shop for the very best in FHA financing solutions. We’ve also been busy expanding our originations, underwriting, closing and asset management groups to provide our customers with dedicated, personalized attention through every stage of the finance process. At Love Funding, we deeply value our client relationships and look forward to demonstrating our continued commitment in 2015.

Posted in Industry News, Love Funding News, Newsletter.

Dealmaker of the Day

January 30, 2015

Love Funding, Washington, D.C., arranged $35.8 million in FHA financing for Maryland, California and Texas assets.

Laura Saull-Smith, senior director in Love Funding’s Washington, D.C. office, originated a $20.7 million refinancing for Paddington Square Apartments, a 165-unit community in Silver Spring, Md. The 223(f) financing enabled borrower Paddington Square Development Corp., to lock in a fixed non-recourse 35-year loan and consolidate outstanding debt.

“Paddington Square, which was built in 1960, is an affordable/market-rate rental property operating under the Housing Innovations Fund program offered by the Montgomery County Housing Opportunities Commission,” Saull-Smith said. As a result, the property reserves 40 percent of its units for of low- and moderate-income families, she added.

Paddington Square Development Corp. acquired the property in 2004 and received approval from the Housing Opportunities Commission to conduct a $5.6 million renovation including electrical upgrades, replacement of all HVAC systems and central water heaters and roof replacement. The Housing Opportunities Commission also approved a second rehabilitation phase in 2009, raising the total commitment to $11.2 million.
Continued…

Posted in Industry News, Love Funding News.

RAD Program Updates

January 28, 2015

The HUD Rental Assistance Demonstration (RAD) program is entering its second major phase with a full head of steam. The program’s initial cap of 60,000 units has tripled and now sits at 185,000. What’s more, the proposed 2015-16 federal budget would impose no limit at all on the program going forward.

The rising popularity of the program speaks to its effectiveness as a means of converting the public housing stock of this country to private ownership. The driver is the program’s design: Allowing existing subsidies the projects are receiving through housing authority budgets to be transferred to direct rent payments. This enables private investors to take part in recapitalizing and modernizing the rental housing inventory by partnering with PHAs. They can finance the improvements with market rate debt, Low Income Housing Tax Credits (LIHTC), and/or other state or local subsidies when they are made available.

In addition, the cost of that capital is particularly enticing. The market rate financing is most often insured with FHA multifamily mortgage insurance, which results in very low interest rates. This incentivizes investors to borrow as much as they can to maximize the repairs and improvements and boost their own returns.

Posted in Industry News.

This holiday season, consider veterans in need

December 23, 2014

by Mark Dellonte via Washington Examiner

This year, a higher level of attention has been brought to a group of Americans who deserve our appreciation but often don’t get the kind of thanks they truly need.

Throughout the country, veterans are struggling with issues few of us can fathom. Many face not only physical and mental challenges upon returning home from conflict, but pressing financial concerns as well. It may shock you to know that nearly 50,000 veterans across the United States are homeless.
Continued…

Posted in Industry News, Love Funding News.

Dealmaker: Love Funding Secures $11M in 223(a)(7) Funds

October 9, 2014

MBA-NewsLink

Tucker, Michael–Oct. 9 , 2014

Love Funding, Washington, D.C., secured $10.9 million through HUD’s 223(a)(7) program to refinance two market-rate Knoxville, Tenn. apartment properties.

Senior Director Tammy Tate of Love Funding’s Knoxville office secured the 35-year loans for Baco Realty Corp., which owns and manages Meadowood Apartments and Sutters Mill Apartments as well as assets in California and Nevada.

“We closed these loans in the mid-three percent range; they were in the high fours,” Tate said. “So they are going to generate something like $25,000 a year in cash flow savings.”
Continued…

Posted in Industry News, Love Funding News.

Love Funding Applauds HUD and VA $62 Million Award to Help Homeless Vets Find Permanent Housing

October 1, 2014

Mark Dellonte, President and Chief Executive Officer of Love Funding, today applauded the U.S. Departments of Housing and Urban Development (HUD) and Veterans Affairs (VA) for awarding $62 million to help thousands of homeless veterans find permanent housing.

HUD today announced the department would grant $57 million to support 8,276 Tenant-Based Vouchers for privately-owned rental units, and $5 million for 730 Project-Based Vouchers (PBV) for existing newly constructed units in specific developments.
Continued…

Posted in Industry News.

Affordable multifamily properties’ mid-life crisis

August 27, 2014

By Laura Saull-Smith and Ann Bolen

Many of us appreciate the role that affordable apartment properties play in providing housing to Virginians who wouldn’t otherwise be able to afford it, but few genuinely understand what goes into preserving those meaningful living quarters in the state’s affordable housing supply. It’s an information gap that needs to be closed soon: During the next five years, more than 25,000 affordable apartment units reserved for tenants with incomes at or below 60 percent of an area’s median income and financed by the Virginia Housing Development Authority (VHDA) will conclude their mandatory 15-year lockout period, the compliance period during which a property that received federal low-income housing tax credits (LIHTCs) must maintain a certain amount of affordable units. At that point, many owners may need to invest heavily to modernize their properties or sell them to offload the financial burden.
Continued…

Posted in Industry News, Love Funding News.

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Calendar

FHCA Annual Conference & Tradeshow

Love Funding Director Kate Murray will be sponsoring the Florida Healthcare Association Annual Conference & Tradeshow August 7-11, 2016 in Orlando, FL. Contact Kate today to learn more about HUD’s healthcare finance programs or to schedule a meeting on-site.

Indiana Housing Conference

Director Dave Opalek will be exhibiting at the Indiana Housing Conference August 25-26, 2016 in Indianapolis, IN. Stop by our booth to discuss your property’s financing needs with Dave.

TAAHP’s TX Housing Conference

TAAHP’s TX Housing Conference will be held July 25-27, 2016 in Austin, TX. Contact our affordable housing finance expert, Director Ken Charbauski today to schedule a meeting at the conference.

CREJ Land & Development Conference

Denver-based Senior Director Peter Wessel will be attending the Colorado Real Estate Journal’s Land & Development Conference August 23, 2016 in Denver, CO. Learn more about Peter’s construction financing experience in Colorado here or contact Peter today to discuss your financing needs.

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