The fixed-rate, non-recourse construction-permanent loan will be used to finance the 218-unit apartment building, located at 443 New York Ave., in the Mount Vernon Triangle neighborhood. The term is for 40 years, which is not unusual for a HUD loan, Lynch tells GlobeSt.com.
HUD, along with Fannie Mae and Freddie Mac, are about the only source of multifamily finance available to developers. In light of this, HUD--which has tended to remain in the shadows compared to its GSE counterparts--has gotten much more attention this past year. "Because of the lack of private debt, institutional investors who never would have considered HUD as a capital source are going to them for financing," Lynch says.
HUD's loan process has gotten shorter--relatively speaking. This loan, for instance, took over six months to complete. The borrowers opted for its "direct to firm" application process, which Lynch said is faster and more effective. "We were tracking another project at the same time that used HUD's traditional application process and that took longer," she says.
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