FHA 241 Program
Eligible Property Overview: This program provides insured second mortgages to finance repairs, replacements (including major movables), energy conservation measures, and additions to existing FHA insured multifamily properties. The program is intended to keep a property competitive, extend its economic life, and provide replacement of obsolescent equipment.
Maximum Loan Amount: The lesser of: (a) 90% of the total eligible Replacement Costs of the project.
(b) The maximum statutory limitation applicable to the Section of the Act which the existing first mortgage is insured, based on the sum of the outstanding balance of the first mortgage and the supplemental loan.
(c) 90% of NOI inclusive of debt service payments on first mortgage.
Maximum Term: Coterminous with the existing FHA loan if less than 25-years left on the existing FHA loan, otherwise up to 40-years limited to 75% of the remaining useful life of the Property.
Assumable: Yes, same as other FHA loans.
Fees and Expenses: 0.30% application fee due at submission of application. Financing and permanent placement fees of up to 3.5% are based on final loan amount due upon commitment and payable at closing. HUD inspection fee for 241(a) is 0.5% of mortgage amount. Love Funding will charge a nominal processing fee.
MIP and FHA Fees: FHA Fees 0.95% of loan amount due at initial loan closing for each 12 months of construction term, or part thereof; 0.95% of outstanding principal balance thereafter. Qualifying affordable or green transactions may have reduced MIP rates ranging from 0.25%-0.35%.
Davis Bacon Wage rules: Normally Davis-Bacon prevailing wage requirements do apply. Contact our office to discuss exceptions.