 Sam
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 Posted: Sat Apr 03, 2004 3:14 am Post subject: Multifamily loans and mortgage insurance programs |
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Multifamily mortgages are residential loans meant for properties that are occupied by more than four families, for example, an apartment building.
The conventional multifamily finance market offers a variety of loan programs to suit the requirements of borrowers. One such multifamily mortgage product available in recent years is the variable rate bond financing. This allows the borrower with an option to get lower interest rates thereby reducing the cost of the long term debts.
The FHA (Federal Housing Administration) insures most of these multifamily home loan programs. The multifamily mortgage insurance programs support financing for the construction and rehabilitation of rental housing apart from residential properties in general.
There are also small multifamily mortgages, although the FHA mortgage insurance program does not hold well in this market. The primary reason behind it is the rigid underwriting process and excessive fees involved in taking home loans for such projects.
As far as refinancing of existing multifamily rental projects are concerned, the HUD (Department of Housing and Urban Development) under the FHA offers the 223(f) multifamily mortgage insurance program. But this program isn't much in demand as it has the condition that the project must be 3 years old. Another area of concern is that multifamily properties should meet HUD's environmental standards to qualify for FHA insured mortgages. |
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