A New Game In Town. Foro de la Viviendai 1 PROGRAMA DE GARANTÍAS PARA EL DESARROLLO DE AREAS RURALES Y URBANAS

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1 Multifamily il FHA Insurance A New Game In Town Foro de la Viviendai 1 PROGRAMA DE GARANTÍAS PARA EL DESARROLLO DE AREAS RURALES Y URBANAS Entorno, Retos y Oportunidades en el Mercado Inmobiliario de Puerto Rico

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3 Federal Housing Administration (FHA) Provides mortgage insurance on loans made by FHA-approved lenders throughout the U.S. and its territories. Insures single family and multifamily homes, including hospitals. FHA mortgage insurance provides lenders with FHA mortgage insurance provides lenders with protection against losses as the result of owners defaulting on their mortgage loans. 3

4 HUD MF Housing Units in Puerto Rico HUD MF Housing Units in Puerto Rico 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Puerto Rico Family Elderly Disabled In conjunction with HUD s Assisted housing programs, has provided MF lenders and owners with the ability and the incentives to create tens of thousands of rental properties which h otherwise may not have existed.

5 MF FHA Insurance Programs Acquisition or Refinance New Construction and Substantial Rehabilitation Health Care Facilities 5

6 Acquisition or Refinance 6 Section 223(f) Section 232 pursuant to Section 223(f) Section 223(a)(7) Refinance program for FHA insured projects

7 New Construction and Substantial Rehabilitation 7 Section 221(d)(3) --- Not-for-profits Section 221(d)(4) Section 220

8 Health Care Facilities 8 Section 232 New Construction or Substantial Rehabilitation Section 242 Hospitals

9 MF FHA Insurance Programs 9 Acquisition or Refinance Section 223(f) Section 232 pursuant to Section 223(f) Section 223(a)(7) Refinance program for FHA insured projects New Construction and Substantial Rehabilitation Section 221(d)(3) --- Not-for-profits Section 221(d)(4) Section 220 Health Care Facilities Section 232 New Construction or Substantial Rehabilitation Section 242 Hospitals

10 Egida del Buen Samaritano Caguas, Puerto Rico 10 Section 223(f) refinancing of Section 202 Direct Loan Mortgage amount: $3,493, Interest: 6.5% Term: 35 years BR elderly units.

11 Hospital Mennonita Cayey, Puerto Rico 11 On January 20, 2010, HUD insured a mortgage loan to Mennonite General Hospital to expand and renovate its Cayey campus. The $129,966,100 loan is made possible through FHA s Section 242 Mortgage Insurance Program for Hospitals. The closing was completed at the San Juan Field Office.

12 12 Non recourse financing No balloons or variable rates FHA Benefits Repairs mortgageable Favorable loan terms

13 HUD Notice H Expire July 31, 2011 A project which was built and intended as condominiums, but is now operating or proposed to operate as a rental project, may be considered under Section 223(f) if the condominium regime is converted to a single owner with no individual unit ownership, and the property meets the other program guidelines.

14 HUD Notice H Expire August 31, 2011 Renewal of Special Authority for Eligibility of Projects for Mortgage Insurance where Construction has Started. Applies only to projects with site improvements and building foundation work (i.e., footings, foundation walls, piers, grade beams, slabs, and under slab utilities).

15 HUD Notice H Expire February 28, 2011 Extension of Temporary Authority for Multifamily Hubs to Process Waiver Requests Pertaining to the Three-Year Rule for Section 223(f) to Allow for Acquisitions iti Property was originally constructed or substantially rehabilitated less than three years prior to the date of application for Firm Commitment.

16 Section 202/811 Capital Advance Programs 16 Capital advance to finance development of new rental housing with supportive services for the elderly and persons with disabilities. Capital Advance repayment is not required if property remains low income for 40+ years Awarded d competitively through hannual NOFA process Must be nonprofit owner

17 Yabucoa Elderly Housing Yabucoa, Puerto Rico 17

18 Ciudad Dorada Víctor Hernández Aguadilla, Puerto Rico Section 202 Housing for the Elderly Capital Advance: $5.1 million HOME funds used to remove asbestos 42 1-BR units 2008 Silver Achievement Award Renovated Housing Overall Project Multifamily 50+ Housing Council/National Association of Home Builders

19 La Casa de Junny Mayaguez, Puerto Rico Section 811Housing for the Disabled Capital Advance: $452, unit Group Home Restricted Occupancy: persons with ihmental retardation

20 General Requirements 20 Regulatory Agreement Sole Asset Amortization Plan HUD Application Fee HUD Inspection Fee HUD MIP Fair Housing and Equal Opportunity Previous Participation Occupancy

21 Key Questions for Selecting an FHA Program 21 What? When? Business Plan? Where? Full Ownership? Who? Ongoing Compliance?

22 MF Housing in FY

23 Where to Get More Information 23 San Juan Field Office gin_islandsislands 235 Federico Costa Street Suite 200 San Juan, PR (787)