Are you considering a refinance of your multifamily loan? If so, you've come to the right place! We have taken a look at two of our most popular multifamily refinance options: an interest rate reduction and FHA 223(a)(7). Each product has specific guidelines, but a simple comparison is below. For a more in depth analysis of these programs, click here. Love Funding is proud to be your FHA finance expert. Please don't hesitate to contact a member of our team to see if these programs could work for you.
|INTEREST RATE REDUCTION||FHA 223(a)(7)|
|OVERVIEW||This program permits the modification of the existing loan only for the purpose of reducing your interest rate. Please note, your existing prepayment penalty must be paid in full and is absorbed in the new interest rate.||If you have an existing FHA insured loan, this streamlined FHA program is designed to allow you to lower your interest rate, extend your term, fund project repairs and increase your replacement reserve.|
|QUALIFIED PROPERTIES||Your property must have an existing FHA insured loan to be eligible. It must also be out of the lock-out phase before the request is submitted to HUD. Only the FHA mortgagee, or lender of record, can execute an IRR.||Your property must have an existing FHA insured loan to be eligible. It must also be out of the lock-out phase before closing.|
|LOAN AMOUNT||You will not be able to increase the loan proceeds; however, a minimum debt service coverage (DSC) of 1.05x is required based on T-12 operating financials and the new interest rate.||
Your loan amount will be the lesser of:
|TERM EXTENSION||No term extension is available.||
HUD may approve a term of up to 12 years beyond the remaining term of your existing mortgage, but not to exceed the original term. Additionally, term extension requests must be supported by condition of property, replacement reserve balance and/or debt coverage ratio.
|FEES & EXPENSES||There are minimal fees and expenses:
||There are fees associated with FHA 223(a)(7):
|OTHER REQUIREMENTS||Other FHA requirements include:
||Other FHA requirements include:
|TIMING||The process takes approximately 30-45 days. Underwriting is not required; however, HUD asset management approval is required.||This process takes approximately 90-120 days with required Love Funding underwriting and HUD production review.|