Date:  July 1, 2021

From:  Jan Miyagishima
            Director, Mortgage Operations



Property income and expense statements and pro-forma financial statements                    (Section 3004.04) 


AHFC's multi-family seller/servicer memo (21-01mf) released on January 4, 2021 provided guidance to lenders who are determining whether the debt service coverage ratio meets or exceeds the 1.250 requirement as described in Section 1002.02.F. AHFC would like to offer further clarification to assist Lenders with their determination.



Projected Gross Income - gross rents as projected by the appraiser.

Vacancy/Credit Loss - Projected Gross Income less Effective Gross Income.

Effective Gross Income - based on most recent average of two years federal income tax returns. For loans with a 75% loan-to-value or lower, current rents may be averaged with historic rents.



Management/Admin - nine percent (9%) of the Effective Gross Income or property management contract rate if higher, or historical average if higher.

Insurance - actual insurance premium quote.

Real Property Taxes - actual current year taxes. If proposal pre-dates the establishment of current year taxes, the higher of prior year's property taxes or appraiser's projections may be used.

Utilities - most recent calendar year's utility expenses as verified by local utility providers. Repair/Maintenance - average of most recent two years federal income tax returns. Documented capital improvements may be deducted from the Schedule E expense line item.

Reserves - $350 per unit, per year unless indicated higher by the appraisal report.


Net Operating Income - Effective Gross Income less Total Operating Expenses


Additional operating expenses, identified as historic expenses supported by Schedule E statements or by contract (such as a land lease), must be included as a separate line item in the pro-forma.

documentation for purchase of a seasoned multi-family loan                                                            (Section 5000.06) 


AHFC is pleased to expand the Multi-family Loan Purchase Program to include guidelines for the sale of a seasoned loan that has an expired AHFC term loan commitment. Predicated on the existence of an expired AHFC term loan commitment that was offered up to 24 months prior, to request a new term loan commitment (replacement commitment) under the expired commitment terms and conditions, the following is required: 

  1. Copy of the original, expired commitment;

  2. Payment history indicating no late payments since origination; and,

  3. Evidence that the unsatisfied condition(s) in the original commitment that prevented the loan from being sold to AHFC has been satisfied. 

The fee structure is the same as an initial commitment with a 0.5% fee being charged for a 90-day commitment. AHFC will consider requests for a 45-day commitment at a 0.25% commitment fee.


The interest rate offered on the replacement commitment will be the rate in effect at the time the replacement commitment request is received by AHFC. If the interest rate on the note is lower than the interest rate at the time the request is received by AHFC, the selling lender must buy down the current interest rate to match the note rate. If the note rate is higher than the published interest rates, the loan may be sold to AHFC at the note rate.


Any outstanding fees from the original commitment must also be paid when requesting a replacement commitment. Please review the attached guidelines for additional direction.