100% Funding With HUD 223F.

[Lee Ali]

In some circumstances HUD 223F is able to do 100% financing.

Please contact your commercial mortgage brokers and ask them to investigate the specific conditions and requirements.

I want to compile a list of parameters based on various investors' situations.

I think that this would be a useful empirical "stress test" of the loan program and everyone will benefit from it.

Thanks for your participation.

Lee

[Louis Bergman]

I hate having to answer the question in a positive manner, as it creates a wrong mindset with many wannabees and tire kickers.
But here is the quick and dirty for those who will know how to benefit from this.

In some cases with New Construction and situations where a distressed property is purchased below FMV while needing substantial rehab, you will find that you can have a Loan scenario that reaches 100% or even more. As a specialist in the field and in the normal course of business I regularly place these Loans with my special Lenders.
Having said that, this is not a right for everyone to claim.

These so-called HUD loans are NON-recourse, but the Lender (the Bank) will most certainly look at the investor to gauge his experience and financial standing. Your strength, experience as well as the recommendation of your experienced Broker in good standing will determine whether the Bank is willing to grant such an exceptionally high leverage Loan.

In first instance the Bank will judge the Broker's underwriting on its own criteria, as in the end this loan will stay on the books of the Bank (not HUD).
If their due diligence confirms the positive information as presented, they will submit the package to HUD who will then on their own start the process from scratch to verify what the Bank presents.
If in the end HUD agrees with the Bank (and indirectly with your Broker who stuck his neck out), a closing date is determined, and FHA will proceed to guarantee the Loan to the Bank.

So yes, these are truly the Rolls Royces among Loans, but they take several months to close.
You have to know your stuff to be able to negotiate such a long closing with the Seller.
Experienced investors have no problem with all the LOIs, contracts, bureaucratic procedures and forms, because it just does not get any better for the Pros. But if you're relatively new to the field, and have no financial strength whatsoever or experience in multifamily, you will not get access to these high leverages.

So Lee is correct in saying it is indeed possible. But this playing field is for the Pros.
Hope this cleared up some of the misunderstandings on the subject.

Louis :cool: