The change in Administration brought with it a flood of news about agency closings, furloughs, buyouts, and the like. It’s been tough to keep up.
One of the great advantages of an FHA-insured loan for borrowers is that they can “fix it and forget it.” We usually say that about rates. Once you’ve locked your rate on an FHA loan, it’s fixed through construction and for its forty-year life. At the moment, it’s good to remember that. If you have an FHA-insured loan, the deal is done. Your rate and terms are fixed, and they will not change.
The news is encouraging if you are thinking about FHA financing for your multifamily project or are processing a loan now. New and more generous underwriting – 1.15 DSC and 87% LTC for market-rate projects – is available now, and the new Administration has signaled a more business-friendly approach, relaxing some regulations and placing others on hold. While up, FHA rates are still much lower than conventional bank debt (if you can find a bank loan at all), and plenty of liquidity is available.
We often say that FHA-insured financing – with no recourse, fixed rates, and higher leverage — offers peace of mind. Amidst all the news from Washington, that’s still true.
If you have a project that needs financing or want to discuss the options, we welcome the opportunity to speak with you about it. Please schedule a call.
