What is HUD?
U.S. Department of Housing and Urban Development. HUD's mission is to increase home ownership, support community development and increase access to affordable housing free from discrimination. To fulfill this mission, HUD will embrace high standards of ethics, management and accountability and forge new partnerships--particularly with faith-based and community organizations--that leverage resources and improve HUD's ability to be effective on the community level.
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What is FHA?
The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.
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What is OIHCF?
The Office of Insured Health Care Facilities (OIHCF) was created to oversee every HUD-Insured healthcare facility financing that is funded. The OIHCF is comprised of individuals that are healthcare industry professionals hailing from several discipline backgrounds, i.e. valuation, architectural, mortgage credit, etc.
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What is NHA?
National Housing Act. Federal act in 1934 creating the Federal Housing Administration providing mortgage insurance and below-market financing for home buyers, and the Federal Savings and Loan Insurance Corporation. FHA mortgage insurance protects against default risk in mortgage loans with loan-to-value ratios up to 80%, and mortgages amortized by periodic payments over a 30-year term. FHA-insured mortgage loans are purchased in the secondary market by the Government National Mortgage Association. You may view or download the document here.
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What is GNMA?
Ginnie Mae - Government National Mortgage Association. Ginnie Mae neither issues, sells or buys pass-through mortgage-backed securities, nor does it purchase mortgage loans. It simply guarantees (insures) the timely payment of principal and interest from approved issuers (such as mortgage bankers, savings and loans, and commercial banks) of qualifying loans, such as those issued by the FHA and RHA.
Unlike its cousins Freddie Mac, Fannie Mae and Sallie Mae, Ginnie Mae is not a publicly-traded company. An investor in a GNMA security will not know who the underlying issuer of the mortgages is, but merely that the security is guaranteed by GNMA, which is backed by the full faith and credit of the U.S. government, just like U.S. Treasuries.
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What is LTV?
Loan-to-value (LTV) is a ratio that depicts the relationship of a loan amount with the value of a property. This ratio is obtained by dividing the amount of a loan by either the sale price of the property or the property’s appraised value. The lower of the two amounts is used. LTV is expresses as a percentage. For example, a loan of $50,000 on a $100,000 home has an LTV of 50 percent.
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What is DSCR?
The debt service coverage ratio (DSCR), is the ratio of cash available for debt servicing to interest, principal and lease payments. It is a popular benchmark used in the measurement of an entity's (person or corporation) ability to produce enough cash to cover its debt (including lease) payments. The higher this ratio is, the easier it is to obtain a loan. The phrase is also used in commercial banking and may be expressed as a minimum ratio that is acceptable to a lender; it may be a loan condition or covenant. Breaching a DSCR covenant can, in some circumstances, be an act of default.
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What is MAP?
The Multifamily Accelerated Processing (MAP) Guide, originally published May 17, 2000, was revised March 15, 2002. The MAP Guide is approximately 565 pages. You may view or download the document here.
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What is a HUD Lean?
Lean is the new processing system for all HUD 232/223(f) loans. The Lean management process is driven by simple rules such as, all work should be highly specified as to content, sequences, timing and outcome, and every customer-supplier connection must be direct. Also, there needs to be an unambiguous 'yes or no' way to sent requests and receive responses. The pathway for every product and service must be simple and direct, and any improvements must be made in accordance with the scientific method under the guidance of a teacher at the lowest possible level in the organization. Lean is aimed to eliminate inefficiencies in the processing and approval of HUD applications.
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Can I get cash out under Lean?
The same rules for MAP still apply under Lean. Cash-out is not immediately available to the borrower. The borrower can however receive additional funds to make capital improvements to the facility being financed by HUD. Cash-out can be obtained in conjunction with a bridge loan after 24 months.
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Can't I just go to my local HUD office?
As of September 1, 2008, Multifamily Hubs and Program Centers will no longer accept Section 232/223(f) applications.
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What property types qualify for HUD Lean?
Licensed Senior housing, long term care facilities, Licensed skilled nursing, assisted living, and board care facilities. Facilities containing unlicensed independent units are eligible so long as the number of these types of units is less than 25% of the total units in the facility.
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