SS Multi-Family Memo 16-02
Date: September 16, 2016
MULTI-FAMILY GUIDE REVISIONS: CONTACT MULTI-FAMILY
Multi-Family Loan Purchase Program
Eric Havelock, Lending Officer II
Remaining Economic Life
Effective with the date of this memo, all multi-family properties that are being submitted to AHFC for commitment consideration must be supported by an appraisal that identifies the remaining economic life as equal to or exceeding the amortization period of the proposed loan. Should the remaining economic life be less than the amortized period of the loan, a capital needs assessment must be completed by a qualified appraiser to identify the required capital improvements necessary to extend the remaining economic life to match the amortization period of the loan. Alternatively, the applicant may elect for a shorter amortization period to match the property’s remaining economic life.
As a reminder to Lenders, AHFC’s Multi-Family Selling Guide requires completion escrows to be funded at 150% of the bid amount(s). Effective with the date of this memo, multi-family submissions for commitment that include completion escrows will be required to have 150% of the bid amount(s) included in the balancing of the sources and uses. After the repairs are completed, excess loan proceeds are to be used to reduce the principal balance. The Lender is required to advise AHFC in its submission package whether the buyer or the seller is to receive excess reserve deposits that are not loan proceeds, should they exist, after the work identified in the completion escrow has been finished.