Historical ProductionHistorical Production

221(d)(4) 221(d)(4) 1960s - 20071960s - 20079,099 loans9,099 loans

1,107,865 units1,107,865 units

$42.6 billion insurance written$42.6 billion insurance written

$15.9 billion insurance in force$15.9 billion insurance in force

Current productionCurrent production

221(d)(4)221(d)(4) – FY 2006 – FY 200692 loans92 loans14,996 units14,996 units$885 million insurance $885 million insurance

writtenwritten

221(D)(4) PROGRAM 221(D)(4) PROGRAM BASICS BASICS

NEW CONSTRUCTION AND SUBSTANTIAL NEW CONSTRUCTION AND SUBSTANTIAL REHABILIATIONREHABILIATION

INSURES BOTH CONSTRUCTION AND PERMANENT INSURES BOTH CONSTRUCTION AND PERMANENT LOANSLOANS

40 YEAR MORTGAGE TERM40 YEAR MORTGAGE TERM

FINANCED WITH GNMA MORTGAGED-BACKED FINANCED WITH GNMA MORTGAGED-BACKED SECURITIES SECURITIES

Builder/Sponsor Profit and Builder/Sponsor Profit and Risk Allowance (BSPRA)Risk Allowance (BSPRA)

. History . History

. Identity of interest with . Identity of interest with General Contractor General Contractor

. 10% of all costs except land . 10% of all costs except land

. Effect on borrower equity . Effect on borrower equity

Mortgage Mortgage Limitations Limitations

90% of Replacement 90% of Replacement

Cost(New Construction))Cost(New Construction)) 90% of Rehab cost plus 90% of Rehab cost plus

As-Is Value(Sub Rehab) As-Is Value(Sub Rehab) Debt Service Limit(90% Debt Service Limit(90%

of Net Income)of Net Income) Statutory Per Unit Limits Statutory Per Unit Limits

Cost CertifcationCost Certifcation

. History . History

. Borrower in all cases. Borrower in all cases

. General Contractor in . General Contractor in identity of interest (e.g., identity of interest (e.g., BSPRA) cases BSPRA) cases

Ground Leases Ground Leases

TermTerm - 99 year renewable - 99 year renewable - 10 years beyond maturity - 10 years beyond maturity

datedate Limit on Value Limit on Value FHA right to purchase Fee FHA right to purchase Fee

titletitle Limit on Ground Rent Limit on Ground Rent