HUD FHA 221(d)(4) Construction Loans
HUD FHA 221(d)(4) Construction Loans are for substantial rehabilitation of Multifamily properties. The Interest-only term is equal to actual construction period plus 2 months for cost certification followed by 40 years fully amortizing. Financing is available up to 90% for subsidized projects and payment of prevailing wages is required, as determined by the Department of Labor, for all contractors and subcontractors. The loan is assumable, requires impounds for taxes, insurance, mortgage insurance, and replacement reserves. The construction loan rolls to permanent financing at the same rate. Great for reducing exposure to interest rate environment.