Oxbridge Ventures has teamed with several foreign investment groups to significantly augment its lending capacity to the multifamily and healthcare sectors. Under an agreement with the Argentum Capital Group of the United Kingdom, both entities have agreed to leverage up to $100 million in internally sourced equity in creating a US based real estate investment portfolio of over $1 billion by 2016. A key focus of this ambitious effort will be sourcing and structuring GAP financing for sponsors of projects seeking FHA insured loans provided by HUD. FHA insured loans are loans that typically offer higher loan to value ratios – anywhere from 85% to 92.5% of a given project’s cost or value (see detailed specifications itemized below). The fund established by Oxbridge and Argentum, to be styled the Oxbridge FHA Facility, will provide the remainder of the financing from internally sourced equity or debt. Click here to see the press release announcing the creation of the fund.
The FHA insured loans provided by HUD are generally reserved for multifamily and/or healthcare related projects, including loans for the purchase, refinancing, construction and substantial rehabilitation of apartments, assisted living facilities, skilled care nursing homes and critical care hospitals. These loans play an important role providing liquidity to the multifamily and healthcare communities. As the mortgages are insured by the FHA, HUD approved lenders are able to assume a greater level of risk and provide borrowers with the most aggressive rates and terms in the market. Click here to see detailed term sheets for the types of FHA loans currently available.
Advantages in procuring an FHA insured loan include:
- Up to 90% LTV on purchases
- Up to 85% LTV on refinances
- Low interest loans
- 35-40 yr amortization
- Low payments
- Loans are assumable multiple times
- Low DSCR requirements 1.17x
- All closing costs and lender fees are eligible to be included in the loan to be paid at closing
- No minimum net worth requirements
- No liquidity minimum requirements
- Low experience requirements
- A minimum FICO credit score of 680
- Construction and substantial rehabilitation loans for up to 90% of total costs
- Rate locks for long-term construction interest rate prior to commencement of the project
- Mezzanine debt is allowable in some cases
- No stabilization reserve is required if there is a HAP contract
- Secondary financing plus the first mortgage can go up to 92.5% of value for existing projects
- No Medicaid Stabilization Reserve is required for healthcare projects with Medicaid
With the new fund created by the partnership between Oxbridge and Argentum, sponsors of large multifamily and or healthcare related assets (transactions with a value over $30 million) seeking FHA loan guarantees will now be able to quickly add a strong partner to their applications who can fund that portion of any deal not covered by insurance. That is, Oxbridge will source the equity component typically required of sponsors of such deals from its network of funding sources, thereby effectively creating a 100% financing solution for FHA loan projects funded by project sponsors accessing the new Oxbridge FHA facility.
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