Expertise in HUD Mortgage Programs

The United States Department of Housing and Urban Development (HUD) is vital in providing FHA mortgage insurance on loans made by lenders to multifamily developers and healthcare owners/operators.

HUD programs provide capital to acquire, refinance, build, or substantially renovate multifamily housing projects, senior assisted living centers, and long-term care facilities.

A common misconception is that HUD provides loans to multifamily developers, real estate investors, and healthcare owners/operators. HUD does not offer financing itself. Instead, they insure loans provided by an approved lender, allowing those lenders to provide better interest rates and terms because the loan is insured by the federal government, making it eligible for funding through the sale of GNMA securities.

As a HUD-approved lender, and authorized GNMA seller/servicer, Century Health & Housing Capital will complete the mortgage insurance application process and underwrite the loan. HUD will review our mortgage insurance application and, upon approval, will issue a “Commitment to Insure” the loan. Century then provides funding for a non-recourse, long-term, low-fixed-rate loan backed by GNMA mortgage-backed securities.

HUD programs provide substantial benefits to multifamily developers and healthcare owners/operators. Depending on the property type and loan purpose, these can include:

• Non-recourse loans to fund a wide range of properties.
• Lower fixed interest rates and longer, fully amortized terms translate to lower payments and greater cashflow.
• Lower debt service coverage underwriting requirements.
• No ongoing loan covenants.
• Loans are fully or partially assumable, which can be attractive for sale opportunities or estate planning purposes.
• Up to 35 years of fixed rate, fully amortized terms for existing projects.
• Up to 40 years of fixed-rate financing, plus construction time, for new construction or substantial rehabilitation.
• Cash-out refinancing opportunities for owners to repurpose equity.
• Finance value-add and other capital expenditures.
• A Low-Income Housing Tax Credit program to encourage investment in affordable properties.

While HUD FHA-insured mortgage programs provide multifamily developers and healthcare owner/operators with many benefits, to obtain the leverage afforded by the program, borrowers and operators should be aware of possible regulatory requirements, which may include:

• Annual submission of financial audits.
• Secondary financing limitations.
• Adherence to Davis-Bacon labor standards for construction loans.

With more than 30 years of experience financing HUD-insured loans, Century Health & Housing Capital can help multifamily developers and healthcare owners/operators anticipate and prepare for many of these requirements. Through our detailed understanding of the regulatory process and in-house loan servicing capabilities, Century Health & Housing Capital also assists our clients with ongoing regulatory requirements.