HUD/FHA Multifamily Documentation

If you want to apply for HUD multifamily financing, having the correct forms and documents is essential. Both lenders and HUD want detailed information on potential borrowers and the property itself. In order to help you close faster, we’ve provided a basic list of standard templates and forms below with links to download.

Forms, Templates for Borrowers

Personal Financial Statement Template

A personal financial statement, or PFS, allows a lender and HUD to determine the financial strength of the person (or persons) borrowing funds. In general, HUD would like to see borrowers with a net worth of at least 100% of the loan amount (not including retirement accounts) and a minimum of 10% of the loan amount in liquidity. If a deal has compensating factors, such as lower leverage, or a borrower with significant HUD multifamily experience, these requirements may be negotiable.

SREO (Schedule of Real Estate Owned) Template

If a potential borrower currently owns other investment properties, a schedule of real estate owned, or SREO, is a required supplement to a borrower’s PFS. In essence, if a borrower is already investing in real estate, HUD (and the lender) want to see how they’re managing their portfolio. They will also want to identify any potential liabilities or risks that may be associated with their current investments.

Organizational Chart Template

An organizational chart, or org chart, demonstrates the exact structure of the borrowing entity. This can be important for HUD, as projects may get complicated, particularly if multiple investors, trusts, or other unique capital structures are involved.

Property Financial Forms, Templates

HUD and lenders also want to know about the profitability and financial status of the property itself.

Trailing 12-Month P&L Template

An operating statement, also known as a P&L, or profit and loss statement, is one of the most effective ways to demonstrate this. A P&L shows both income and expenses and can be utilized to determine NOI (net operating income), DSCR (debt service coverage ratio), and other important metrics. A P&L statement is often organized on a trailing 12-month basis, showing data for each of the 12 preceding months.

Three-Year Operating Statement Template

HUD and lenders will also want to see a longer-term view to a property’s historical profitability. This can be shown with a P&L of the last three years, with data on a yearly basis, to highlight the property’s income and expenses — thus profitability — over a longer term.

Budget & Pro Forma Template for HUD 221(d)(4)

The lender and HUD will also require evidence of a stabilized budget for the next 12 months. This is especially important for assets that will undergo change, from substantial rehabilitation to the replacement of a property management company.

Rent Roll Template

A rent roll is one of the most important documents for a prospective HUD multifamily borrower. A rent roll lists all of a property’s tenants, including information such as the amount of rent they are paying, if they are current or behind on rent, any rental concessions offered, and lease terms. This information is extremely valuable for the underwriting process, as it can help lenders and HUD assess risk in ways that a T12 or longer-term P&L statement cannot. For instance, if multiple tenants are behind on rent, or many of a property’s leases expire in the same month, it could suggest a higher risk profile.

Sources & Uses Statement Template

Another critical document is the sources and uses statement, which demonstrates where the funding for a multifamily or commercial real estate project is coming from and how each dollar of capital is used. In a sources and uses statement, the combined uses of funds must exactly match the combined sources of funds.