3.7.11.1 Section 223(f) Refinance and Acquisition Processing

A. Criterion 1. Loan Amount Requested on Application. The requested application amount may be amended when appropriate.

B. Criterion 3 . Amount Based on Value: The applicable percentage of the estimated value of the property after completion of repairs and improvements for loan applications are as follows:

1. 90% for Section 202 & 202/8 direct loans and for projects with 90% or greater rental assistance.

2. 87% for projects that meet the definition of Affordable Housing and for which the achievable Tax Credit rents are at least 10% below market rents.

3. 85% for market rate projects or Tax Credit projects without a significant rent advantage (i.e. the achievable rents are not at least 10% below market).

C. Criterion 4. For amount based on limitations per family unit, where percentages are required, enter the same percentage applied under Criterion 3. See Chapter 8 for complete details and the MF Housing website: https://www.hud.gov/program_offices/administration/hudclips/notices/hsg on information for per family unit limitations and the High Cost Percentage by jurisdiction.

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Chapter 3 Programs 3.7 Section 207/223(f) Refinance or Acquisition

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• D. Criterion 5. Amount based on DSCR (ratios are rounded for presentation purposes) must be as follows:

1. 90% of NOI (1.11 DSCR) for projects with 90% or greater rental assistance;

2. 87% of NOI (1.15 DSCR) for projects that meet the definition of Affordable Housing and for which the achievable Tax Credit rents are at least 10% below market rents; or

3. 85% of NOI (1.176 DSCR) for market rate projects or Tax Credit projects without a significant rent advantage (i.e. the achievable rents are at least 10% below market.)

E. Criterion 7 – Acquisition Applications. For amount based on total cost of acquisition, per Section 223(f), the following percentages apply to Line 7d. (i.e. formula to compute the loan closing charges) and Line 7h:

1. 90% for projects with 90% or greater rental assistance;

2. 87% for projects that meet the definition of Affordable Housing and for which the achievable Tax Credit rents are at least 10% below market rents; or

3. 85% for market rate projects or Tax Credit projects without a significant rent advantage (i.e. the achievable rents are at least 10% below market.)

• F. Criterion 10. For this criterion, the limit is the greater of 80% of LTV or the cost to refinance.