What are the Application Fees for HUD 223(f) Loans?
While HUD 223(f) acquisition and refinancing loans offer incredible benefits to borrowers, they also come with a variety of fees. Some of the most common include lender application fees, which generally cost around $25,000 and include all required third-party reports and due diligence, an FHA
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While HUD 223(f) acquisition and refinancing loans offer incredible benefits to borrowers, they also come with a variety of fees. Some of the most common include:
Lender Application Fee: Typically around $25,000. This includes mandatory due diligence, and required third-party reports, such as an Appraisal, Phase I Environmental Assessment, Market Study, and Project Capital Needs Assessment (PNCA.)
FHA Application Fee: 0.30% of the entire loan amount.
FHA Inspection Fee: $30/unit if the repairs are less than $3,000/unit, or the greater of $30 per unit or 1% of the total cost of required repairs if that cost exceeds $3,000/unit
Origination Fee: Negotiable, varies by lender
Finance/Permanent Fee: Usually limited to 3.50% of the entire loan amount (can be paid from loan proceeds)
Good-Faith Deposit (rate lock and commitment): 1% of the total loan amount, due at commitment and refunded at loan closing
Lender's Legal Costs: Vary, paid by borrower
Title Costs: Vary, also paid by borrower
What are the typical application fees for HUD 223(f) loans?
The typical application fees for HUD 223(f) loans include a lender application fee of around $25,000, an FHA application fee of 0.30% of the entire loan amount, an FHA inspection fee of $30/unit if the repairs are less than $3,000/unit, or the greater of $30 per unit or 1% of the total cost of required repairs if that cost exceeds $3,000/unit, an origination fee that is negotiable and varies by lender, a finance/permanent fee usually limited to 3.50% of the entire loan amount, a good-faith deposit of 1% of the total loan amount, lender's legal costs, and title costs. All of these fees are paid by the borrower. Source and Source.
What documents are required to apply for a HUD 223(f) loan?
To apply for a HUD 223(f) loan, you will need to fill out a form and provide the following documents:
- Financial statements
- Business tax returns
- Personal tax returns
- Credit report
- Appraisal report
- Environmental report
- Title report
- Survey report
- Lease documents
- Operating statements
- Insurance documents
For more information, visit the HUD 223(f) Loans: Terms, Qualifications and Guidelines page on the HUD website.
What is the timeline for the HUD 223(f) loan application process?
In general, FHA 223(f) loans take between 100 and 150 days (4 to 5 months) to close. The actual time frame depends on specifics of each deal. A typical timeline might be as follows:
- Firm application is typically submitted to HUD within 30 days.
- After HUD issues the firm commitment and rate lock, most HUD 223(f) loans close in 45 to 60 days.
What is the maximum loan amount for a HUD 223(f) loan?
HUD 223(f) loans have no maximum loan amount. However, HUD may decide to impose even more restrictive LTV and DSCR requirements for loans above $100 million in order to reduce their risk. The overall size of a HUD 223(f) loan cannot go beyond a specific per-unit limit set by HUD (and adjusted by project location).
Source Source SourceWhat is the minimum credit score required to apply for a HUD 223(f) loan?
The minimum credit score required to apply for a HUD 223(f) loan is not specified. However, the borrower must have a satisfactory credit history and demonstrate the ability to repay the loan. Additionally, the borrower must have a debt-to-income ratio of no more than 45%.
For more information, please refer to the following sources: