The process for financing a multifamily project usually involves several loans and two-to-three closings, which indicates fees will be paid for multiple transactions. Initially, there will be a construction loan plus a closing just for the interim construction loan.
Throughout the following 1-2 years, a permanent mortgage will be placed. Once construction is completed, there will be another loan closing, with fees similar to your permanent mortgage.
Many people opt for a lower rate with a 5 year term and 30-year amortization. Once five years is up, so is the loan, and another loan is necessary as will be another round of fees.
A Great Solution
Interest-only construction loan that automatically converts to 40-year permanent financing
40 Year Amortization
40 Year Term (no balloon)
No maximum loan amount
Low, fixed interest rate, based on market spreads over the 10-Year Treasury Yield
"Developer's Fee of 10% of cost permitted towards use of equity requirement
Non-recourse loan (No personal liability)
Pre-payment terms apply
Debt Service Coverage ratio minimum of 1.20
Ability to finance third-party fees and loan costs into loan
Review the FHA 221(d)(4) Program