Late last year, I authored a blog about folks that continue to take on refinance risk. In my blog, I referenced the AT&T commercial about “what’s better, faster or slower” and the perceived shortcomings of refinancing a multifamily asset through HUD. Specifically, the blog highlighted the supposed limitations of efficiently getting to the closing table in a timely manner with HUD versus other executions such as GSE or CMBS debt.
Well, I can now officially say that the perception of HUD as the “covered wagon” of finance when compared to the “Ferrari” of Fannie and Freddie is definitely not reality. We at First Housing submitted a firm application package for HUD mortgage insurance under HUD’s Section 223(f) loan program to the Atlanta multifamily HUB in mid November of last year. HUD is allowed 60 days to review the application, and either issue a firm commitment for mortgage insurance or reject the package. In a matter of 28 days, they processed our underwriting package and issued a firm commitment! Even more phenomenal was that during the processing period was the Thanksgiving holiday! How’s that for speed?
Needless to say, our client was very pleased with this turnaround from HUD. So, while faster isn’t always better when financing commercial real estate, it sure is nice when faster is combined with better!