3 Great Benefits of the HUD-insured 221(d)(4) Loan Program
Some multifamily developers and investors shy away from HUD loans. Many feel there is a stigma attached to them. Others misunderstand the products, believing they are only for low-income and affordable housing projects. However, these things are not true. In comparison, HUD multifamily loans have several benefits which make them some of the best products in the business:
Benefit #1: 221(d)(4) loans are fixed and fully amortizing for 40 years. This doesn’t include the interest-only fixed-rate during construction. Overall, the loan is fixed for up to 43 years and is fully amortizing for 40 years.
Benefit #2: They are the multifamily industry’s lowest-cost, highest-leverage, non-recourse, fixed-rate loan available.
Benefit #3: Unlike most bank loans these are completely asset-based.
And although HUD 221(d)(4) loans take longer to close than traditional loans and are more costly to originate, borrowers benefit from favorable leverage, interest-rates, and much more. Especially if you work with an experienced intermediary.
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