Properties with Both HAP Contracts and LIHTC Units
Requirements
For a Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. secured by an MAH PropertyMAH PropertyProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. or a Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan underwritten and serviced by the Lender and financed by the issuance of Bonds where Fannie Mae is providing a Credit Enhancement Instrument. , if the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). has both HAPHAPHousing assistance payment provided to a Borrower by HUD in connection with a HUD Section 8 Property. contracts and LIHTCLIHTCFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. units, you must underwrite the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. using 1 of the following options.
Choice |
Requirements |
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Option 1 |
Underwrite the rents from HAPHAPHousing assistance payment provided to a Borrower by HUD in connection with a HUD Section 8 Property. contract units using the lowest of
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Option 2 |
Underwrite the rents from HAPHAPHousing assistance payment provided to a Borrower by HUD in connection with a HUD Section 8 Property. contract units using the additional income above the LIHTCLIHTCFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. rents (LIHTCLIHTCFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. overage) if the HAPHAPHousing assistance payment provided to a Borrower by HUD in connection with a HUD Section 8 Property. contract rents are less than market rents. If the HAPHAPHousing assistance payment provided to a Borrower by HUD in connection with a HUD Section 8 Property. contract expires before the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents or a mortgage debt obligation with a Fannie Mae credit enhancement. Maturity DateMaturity DateDate all amounts due and owing under the Mortgage Loan become fully due and payable per the Loan Documents. , you must ensure that:
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You may use Option 2, or eliminate the Restabilization Reserve under either option, if you meet all of the following:
- all LIHTCLIHTCFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. rents are at least 10% below market;
- the MAH PropertyMAH PropertyProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. is located in a market or submarket with 90% or greater economic occupancy; and
- the SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). is experienced and successful in owning and operating properties with HAPHAPHousing assistance payment provided to a Borrower by HUD in connection with a HUD Section 8 Property. contracts.