3.7.4 Additional Section 223(f) Requirements

A. In addition to the general requirements in Section 3.1, the following requirements apply to Section 223(f) when used for acquisition or refinancing:

1. Any property acquired by the Borrower before the date of the mortgage insurance application shall be treated as a refinance transaction.

2. Any property acquired by the Borrower after the date of the mortgage insurance application shall be treated as a purchase.

3. In a purchase transaction, any identity of interest, however minor an interest, between seller and purchaser requires the application to be processed as a refinance. (Acquisitions to facilitate Affordable transactions as defined in Section 3.1.12 of the MAP Guide are an exception to this requirement.)

4. Borrowers with no experience operating multifamily rental housing will not be considered for acquisition financing under Section 223(f) unless there are significant mitigants (e.g. the principals have clean credit, strong diversified financial capacity, a conservative valuation, and the property will be managed by an experienced HUD third party Management Agent).