Frequently Asked Question for Business Loans and Commercial Mortgage Loans
WHAT IS DSCR? Debt Service Coverage Rate is the net operating income divide by total debt service (such as PITI, principal, interest, taxes and insurance.)
WHAT IS AN OCCUPANCY RATE? The percentage of your investment property that is currently rented divided by the total units.
WHAT IS AN ADJUSTABLE RATE MORTGAGE (ARM)? A mortgage with an interest rate that goes up and down through the life of your loan. Also called variable or floating rates.
ARE THE FHA MORTGAGE INSURANCE PROGRAMS LIMITED TO SUBSIDIZED HOUSING?
No. FHA mortgage insurance programs is that it is only limited to low income or subsidized housing. HUD will insure market rate apartment assets with no income restrictions or subsidies.
WHAT MATURITIES ARE AVAILABLE?
Maturities of 35 years or less for Section 223(f) and 40 years or less for Section 221(d) are permissible, however, all debt must be amortized within the term of the loan. Shorter amortization periods increase annual debt service requirements, which decrease the amount a property can borrow based on debt service coverage.
ARE FHA INSURED LOANS ASSUMABLE?
FHA insured loans are assumable through a Transfer of Physical Assets process with HUD, provided the new owner and its principals are acceptable to HUD (0.05% of the original loan amount due at application submittal).