HUD 232 Application Fees

Lender Fees in Relation to HUD 232 Loans

Lender Fees in Relation to HUD 232 Loans

Just like other kinds of financing, HUD 232 loans have certain application fees, including a HUD application fee, an FHA inspection fee, and lender application fees. Keep reading to see the entire list of typical fees for HUD 232 loans. 

LTV: Loan-to-Value Ratio in Relation to HUD 232 Loans

LTV: Loan-to-Value Ratio in Relation to HUD 232 Loans

Loan-to-value ratio, or LTV, is one of the most important financial metrics that lenders look at when deciding to approve a borrower for a loan. LTVs for HUD 232 and HUD 232/223(f) loans typically vary between 75% and 85%, depending on the specific property type and borrower.

What are the Replacement Reserve Requirements for HUD 232 Loans?

What are the Replacement Reserve Requirements for HUD 232 Loans?

Both HUD 232 loans for new construction and substantial rehabilitation and HUD 232/223f loans for purchase and refinancing require borrowers to have a certain replacement reserves; money which can fund the repair and replacement of outdated or broken building systems without putting a financial strain on the project itself. Borrowers for these loans must provide a 15-year replacement reserve analysis along with their loan application. Plus, replacement reserves for both of these types of loans must have a minimum balance of $1,000 per unit in years 2 through 15 (HUD 232 loans), and in years 1 through 15 (HUD 232/223f loans).  

What are the Escrow Requirements for HUD 232 Loans?

What are the Escrow Requirements for HUD 232 Loans?

HUD 232 new construction loans require a working capital escrow of 4% of the loan amount. 2% of this, or half the amount, is a construction contingency escrow intended to help fund cost overruns or approved change orders that might occur. If, by the end of the construction process, the construction contingency escrow has not been used, it will be refunded to the developer.

Can You Refinance a HUD 232 or HUD 232/223f Loan?

Can You Refinance a HUD 232 or HUD 232/223f Loan?

If you own a senior living facility with a loan insured under the HUD 232 or HUD 232/223f programs, you can refinance that loan under the 232/223(a)(7) refinancing program. Borrowers can refinancing more than one HUD-insured loan on the same property with one 232/223(a)(7) loan, though the entire loan amount cannot exceed the Maximum Insurable Loan Calculation (MILC). 

Do HUD 232 Loans Allow for Commercial Development?

Do HUD 232 Loans Allow for Commercial Development?

HUD 232 loans allow for a small amount of commercial development, the exact amount of which varies by loan type. For HUD 232 new construction and substantial rehabilitation loans, commercial space is limited to "10% of the gross floor area of the project and 15% of the gross project income." If a space is only intended to serve the project's residents, it won't be counted towards the 10% area limit and 15% income limit. 

What Qualifies as Substantial Rehabilitation for HUD 232 Loans?

What Qualifies as Substantial Rehabilitation for HUD 232 Loans?

In order to qualify for a HUD 232 loan for substantial rehabilitation, a project must meet one of two major requirements. Either the hard cost of any repairs and improvements must exceed 15% of the project's value after completion, or two or more major building components (ex. plumbing, electrical, roof) must be substantially replaced. 

OCRF: Office of Residential Care Facilities in Relation to HUD 232 Loans

OCRF: Office of Residential Care Facilities in Relation to HUD 232 Loans

The Office of Residential Care Facilities (OCRF) is a subdivision of HUD's Office of Healthcare Programs (OHP) composed of healthcare industry professionals that oversees HUD-insured healthcare FHA 232 loan financing.

What are the Application Fees for HUD 232 Loans?

What are the Application Fees for HUD 232 Loans?

Just like other kinds of financing, HUD 232 loans have certain application fees, including a HUD application fee, an FHA inspection fee, and lender application fees. Keep reading below to see the entire list of typical fees for HUD 232 loans.