221(d)4 loan

4 Replies

I am a current lead service technician for a luxury living community. I want to educate myself on everything 221(d)4 loans for the future. I am determined to be successful in owning one myself. If there is anyone that might already have experience and already has success in the area. Some information to start would be great. I love what I do and really want to climb higher.

Hi David-

FHA 221(d)(4) loans are for either new construction or substantial rehab of multifamily properties - defined as 5 or more units. Due to the cost and complexity of the application process, you don't usually see loans less than $1 million, and even at a million it's a relatively expensive option.

FHA 223(f) loans are for refinancing or acquisition of existing multifamily and are a little less costly but same basic thresholds apply.

Do a search for those terms and you'll find some lender websites with basic loan program info, and HUD probably publishes some fact sheets or FAQs as well.

Let me know if I can answer any specific questions for you.

All the best,
Tom

Have no idea how a luxury living community would be using a 221 (d) loan.

Depends on what you might consider luxury.

These are commercial residential loans guaranteed by FHA.

These loans are generally to non-profits, they may private or partner with public housing authorities and the purpose to serve low and very low income persons. Generally all are SROs, single room occupancy having a private kitchen and bath but share living spaces. Other projects may be approved on a needs basis, could be moderate housing. Rehabs and new construction.

Our housing authority has one (of 4) high rise apartment buildings was a 221d. HUD financed project.

The luxury side may come in with other financing within a project, look to Section 42 Tax Credit programs through a syndicator (IRS Tax Code, Sec 42). Projects may have different sources of financing under certain restriction.

Another use for funding use to be under HUDs "Mark To Market" projects that spun existing HUD housing into the private market.

If you're starting off, I'd suggest you begin in Section 8 administration or admin in a housing authority or at a HUD regional office. Other options would be for SRO operators, non-profits dealing in multi-housing or Section 42 developers. These folks don't make much money as admin support. I can tell you, it's highly competitive, very political and without capital it would be tough going this route, but anything is possible. Good luck :)

@Bill Gulley -- believe it or not, D4's can be used for market rate new construction (or rehab), by for-profit sponsors.

Originally posted by @Tom Meade :
Bill Gulley -- believe it or not, D4's can be used for market rate new construction (or rehab), by for-profit sponsors.

DANG 504 TIMED OUT AGAIN! Why my posts are slowing down, BP not responding.

Yes, this will be shorter, I thought I mentioned private. Usually works better, politically as a collaborative public-private arrangement. HUD regions develop need to insure, can get political, but certainly to private developers. I've not seen anything under 1M either. :)

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