FHA Section 231 Mortgage Insurance Program
$1,500,000 and larger.
LOAN TERM AND AMORTIZATION
The construction loan converts into a 40 year fully amortizing permanent loan upon the completion of construction. The construction loan is interest only.
Sponsor must have site control and all approvals in place. Certain minimum amounts or certain component replacements must be spent on the property in order to qualify as a substantial rehabilitation property.
Typically 10 year prepayment penalty of loan amount declining 1% per year.
Profit Motivated or Non Profit/50l(c)3.
DEBT SERVICE COVERAGE
LOAN TO VALUE
Varies depending on rental income source.
Underwritten with a minimum vacancy allowance of 7%.
Fully assumable, subject to FHA approval.
MAXIMUM LOAN AMOUNT
Depends on rental income source but is generally the lesser of: 90% of FHA’s cost estimation, debt supported by 90% of the net operating income at stabilized rents or the statutory mortgage limits for the area.
Fixed rate for both the construction and permanent loans established after issuance of firm commitment by FHA based upon then current market conditions. Permanent rate is fixed prior to the start of construction.
Mortgage Insurance Premium: 1.0% for the first year payable at closing from loan proceeds and .45% per year thereafter payable monthly.
Up to 3.5% of the loan amount for the combined construction and permanent loan and depending on loan size.
Contact your Slate Capital representative for a price quote.