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| | HUD Feasibility
Studies...
Rainmaker
Marketing Corporation specializes in commercial real estate development project feasibility
studies, including HUD feasibility
studies. HUD's MAP program
focuses on providing  non-recourse financing for developers of
multifamily housing and senior
housing. HUD's program includes
both market rate and low-income housing financing programs.
The
drawbacks of the HUD-insured mortgage financing program are:
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Limitations
on certain fees the developer may receive - principally, the
development management fee is not part of the eligible basis unless
the project has a not-for-profit sponsor. This increases the
equity requirement if the developer requires the development fee
income; and
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Limitations
on certain offsite construction costs. If you have significant
offsite utility construction or significant pre-fabricated
construction, HUD will not allow these items to be part of the loan
basis. This also increases the equity requirement as the
offsite construction costs and pre-fabricated costs cannot be
avoided in certain circumstances; and
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Limitations
on product type. Some areas of the country will not pass
muster with HUD as HUD will claim the market has reached saturation
(whether it has or not). This can result in extended
application windows and/or loss of market opportunity; and
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| Limitations
on carrying costs. The uses of working capital in all
HUD-insured loans is the responsibility of the borrower - even when
these working capital requirements become excessive due to HUD's
patent inability to get applications processed in a timely manner
(i.e.: quite often, application windows will require years to
close). You pay your money and take your chances.
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Continued
on next page...
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Do
You Know The Secret?
When it comes to commercial real
estate development finance, it doesn't matter whether you need to raise
$5 million or $50 million, the out-of-pocket costs, advance fees and
project due diligence costs will always require the same relative
investment dollars the promoters have to fund. Do you know what
that amount is? Do you know the Secret? |
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