FHA® 223(f) Refinance of Section 202 Properties

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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 and Amortization Up to 35 years (Fully Amortizing)
Minimum DSC 1.11x for non-profit
Maximum Loan to Value/Purchase Price Up to 90%
Fixed Rate Yes
Eligible Property Existing Section 202 projects
Eligible Borrower Single Asset Entity (for profit or non-profit)
Developer Fee Up to 15% of the acceptable development cost
Tax and Insurance Escrows Monthly deposits required
Recourse Non-recourse
Commercial Space Maximum 25% of net rentable area and maximum 20% of effective gross income
Required Reports Appraisal, Project Capital Needs Assessment (PCNA) & Phase I
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 based on project type
Expense Escrow Yes – sufficient to cover Arbor’s expenses and third-party report costs
Origination Fee Negotiable
HUD Application Fee Non-refundable fee of $3 per $1,000 (0.3%) of the mortgage amount due to HUD with the firm commitment submission package.
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), 15% of appraised value. Repairs/replacements are also limited to one major building component.
Davis Bacon Not applicable to this program
HUD Mortgage Insurance Premium HUD sets the cost of the FHA Insurance. The 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.
Arbor Commercial Mortgage | arbor.com | 800.ARBOR.10

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