FHA SMALL PROJECTS DEMONSTRATION PROGRAM LAUNCHED FOR MULTI-FAMILY HOUSING IN NORTHWEST AND ALASKA
SEATTLE, WA—Today, the U.S. Department of Housing and Urban Development Region X announced the launch of a "fast track" Small Project Demonstration Program (SPP) for FHA insurance programs covering small mortgages up to $1.5 million dollars. The SPP is available to all FHA-approved lenders for multi-family housing projects located in Alaska, Idaho, Oregon and Washington.
The SPP Demonstration, which will run through June 30, 2008, is the cornerstone program for making new inroads into rural and other smaller project markets, including urban in-fill development. The SPP is designed to attract risk-takers and capital to markets where both have been in short supply.
The Demonstration will employ cost, timing, and mortgage sizing incentives to new housing development in smaller markets utilizing the FHA 221(d)(4) and 223(f) programs. Projects must have a minimum of five units and be located within the states of Alaska, Idaho, Oregon or Washington. However, there is tremendous potential applicability for larger projects, depending upon location.
The new SPP provides streamlined processing, reducing time and transaction costs -- an attractive option for small project owners, developers and lenders.
Eligible FHA insurance programs are Section 223(f) for acquisition and refinancing and Section 221(d)(4) for new construction and substantial rehabilitation projects.
Benefits of this program include reduced financing costs, optional use of Fannie Mae and Freddie Mac appraisal forms, and reduced owner requirements for annual financial reporting. The maximum mortgage term for existing buildings and for new construction and substantial rehabilitation will be 30 years and 35 years, respectively. For Section 221(d)(4) projects, the maximum Loan-to-Cost will be 90 percent, and the maximum Loan-to-Value for Section 223(f) projects will be 85 percent.
For more information on the SPP "fast-track" demonstration program, contact Sean Gallagher with the HUD Region X - Northwest/Alaska Multifamily Hub at (206) 220-5208.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.