2 FHA Programs to Know
Construction lending is down, but this government agency provides developers options
to BE a succEssful commErcial
mortgage broker in today’s market,
you must learn about the various gov-ernment-loan programs available to
your clients, how to use them and what
types of properties they can finance.
In particular, the Federal Housing
Administration (FHA) offers viable alter-
natives for your developer clients who
wish to build a multifamily-apartment
property or an assisted-living property.
Also in This Issue
Read our Q& A with Carol Galante, the U.S. Department of
Housing and Urban Development’s deputy assistant secretary for multifamily housing
programs: page 16
assisted-living, intermediate-care and
nursing-home facilities.
To help clients who wish to develop
these types of properties, brokers
should understand the basic guidelines
and processes for each program.
Speak to our seasoned bankers
(877) 226-5897
Rates starting at 6.5%
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Holiday Inn Express
California
Purchase
SBA 504
Broker Fee: $45,000
$4,500,000
Holiday Inn Express
Georgia
Refinance
USDA B&I Loan
Broker Fee: $45,000
$2,485,000
Medical Office Construction
New Mexico
Construction to Permanent
SBA 504
Broker Fee: $24,850
$670,000
Super 8
Arkansas
Purchase
SBA 7A
Broker Fee: $6,700
$950,000
Ramada Inn
Vermont
Refinance
Conventional
Broker Fee: $9,500
Market-rate apartments
If one of your clients wants to develop
a market-rate multifamily apartment
property, the 221(d)( 4) program can
help. As of press time, this program underwrites to the lesser of the following:
90-percent loan-to-cost ratio (ltc); •
1.11 debt-service-coverage ratio •
(dscr); or
federal statutory-loan limits • . Statu-
tory limits apply in high-cost areas,
such as New York City; Washington,
D.C.; San Francisco and Chicago. This
past March 16, the U.S. Department
of Housing and Urban Development
(HUD) increased limits by exclud-
ing land value from the calculation.
This allows the FHA to make loans in
places such as New York, where few
loans previously were made.
In its underwriting, the FHA focuses
strongly on the market study. It has
had established guidelines for years.
As a result, the FHA’s losses had been
low. In 2006, losses were 0.6 percent.
In 2007, losses were 0.7 percent. They
increased to 1.6 percent in 2008. Expected losses for 2009 are 3 percent.
Because of this increase, the agency
as of press time was considering
changing the 221(d)( 4) program’s underwriting requirements for market-rate apartments to the lesser of
83.5-percent LTC or 1.2 DSCR. HUD was
continued on page 38 »
Contact:
Sanat Patel - (623) 878-0258 sanat@thebankoflv.com
Andrew Patel - (623) 487-4890 andrewpatel@thebankoflv.com
LPO Office: 8190 W. Deer Valley Rd. Ste 104-333, Peoria, AZ 85382
Nationwide Lender for Investor and Owner Occupied CRE Conventional • SBA 7(a) • SBA 504 • USDA B&I
All Commercial Real Estate except: Land, Golf Courses, RV Parks, Churches, Marinas, Gas Stations and C-Stores
View our listing in the Scotsman Guide Commercial Matrix
Michael Zukerman is managing director of
Whitestone Realty Capital LLC, a real estate
investment banker and developer. WRC
is developing 24 multifamily projects, six
mixed-use projects and four resort-hotel
projects. Zukerman is of counsel to Warshaw
Burstein Cohen Schlesinger and Kuh LLP
( www.wbcsk.com), practicing real estate
law in New York City, and also is an adjunct
professor at New York University’s Schack
Institute of Real Estate. Reach him at (212)
984-7836. Visit www.whitestonerealty.com.
