You may be asking why would I want to do all of the paperwork and spend the time on a multifamily or a senior housing construction loan with HUD financing? Yes, it is much more time upfront to finance your next construction loan through HUD, however, the benefits could payoff in the long term.

With a HUD construction to perm loan, you will get the following benefits: 

• By financing with a HUD construction loan, you are able to convert it into a permanent HUD loan as soon as the construction is over. If you finance with a bank construction loan, you will have to wait three after your occupancy permit to finance it with HUD and how much higher will interest rates be in three years?
• Up to 40 years amortization and 40 year term, you may never need to refinance this loan. How much time and dollars will you save vs having to refinance every five years?
• HUD loans are Non-recourse, so there are no personal guarantees. Plus HUD doesn’t need to see your tax returns.
• HUD loans are assumable to qualified buyers. If you build now with the lower interest rates that will be locked in for the next 40 years, your buyer will be able to assume this lower interest rate. Your property should have a much higher value than other properties that will have to go through a new loan process with likely higher interest rates in the future.
• Opens up your lending limit at your bank. Banks have lending limits that they can lend to their clients. As with all HUD financing, we’ll cash out your current bank mortgage which will open up your lending limit at your bank. This can allow you to purchase more properties and your all deposit accounts can stay with your bank. There is no change in your banking relationships as HUD doesn’t care where you bank. Bankers that Howell Investment Finance has dealt with like this concept as you will have more income from more properties to run through their bank.
• Your down payment is based on the Lessor of the Stabilized Value or the Loan to Cost. Howell Investment Finance recently arranged a 90% LTC on a new HUD construction loan.

Howell Investment Finance will walk you through the process from the idea inception through to construction funding and will stay with you until the tenants move into your HUD construction loan project. Even after the loan closes, Howell Investment Finance stays involved if you ever have any loan serving questions, they are only a phone call away.

Howell Investment Finance in Ames, IA specializes in commercial loans obtained through HUD, Fannie Mae, and Freddie Mac. Howell Investment Finance works with a strong network of commercial lenders from coast to coast to assist individuals with buying and refinancing a range of commercial investment properties. If you’re ready to learn more about commercial real estate financing, including HUD financing, Howell Investment Finance will walk you through the process! Call (515) 233-8228 or visit the website to schedule an appointment. In addition to Ames, the company serves Ankeny, Cedar Rapids, Des Moines, West Des Moines, Sioux City, Davenport, and Iowa City. Be sure to “Like” us on Facebook.