HUD Multifamily financing
I’m hearing that HUD is really backed up on 223f loans and it’s taking several months for a deal to even get assigned. Has anyone gone through this process lately? We have a few deals that may go this direction and want to know what we are getting ourselves into. Any insight?
Bump
Submitted 2 applications in March, tentatively scheduled for review in august and September.
Hey man,
There is a queue, but the length all depends on where in the country the application is filed as each office/region has different timetables. Please send me a private message if you're open to it, I work as an originator for one of the top HUD lenders in the country and am happy to discuss the process/timing with you in more detail.
Thanks,
Jacob
Yes you are correct. HUD is very backed up and depending on where the deals are it could be pushing end of year before they are reviewed. You certainly aren't closing until 2022 but if you're in a OpZone you can skip the que. You might also want to look at an agency execution, I'd be happy to lay out your options for you. I was a HUD underwriter for the first 5 years of my career and have been a HUD producer for the last 6 years. Shoot me a message for more details.
I don't believe being in an opportunity zone allows you to skip the queue; however you do get a lower application fee and are prioritized. That said, depending on the region, you are still likely 2-4 months (maybe 4-8 months in the northeast right now) before getting picked up by an underwriter.
Out of curiosity, why would a multifamily investor opt for a HUD loan instead of a Fannie/Freddie loan?
Rate and a fully amortizing loan are the main things I imagine. Let's say a Fannie / Freddie deal is at 3.0 - 3.25% today for a regular 10-year refinance. A HUD deal would be at 2.30% ish (pre MIP). You also get to utilize 35-year amortization rather than the standard 30-year. That said, no IO and the time and head ache it takes make it a tough call.
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