Frequently asked questions

A preliminary budget is enough to start the discussion. For new construction, send proposed rents, operating expenses, estimated construction costs and basic site information, including whether you own the land and whether it has debt. For an existing property, start with the rent roll, operating statements and your acquisition or refinancing goal. We can use that information to prepare an initial sizing before you invest in a full application.

No. The authorization allows us to proceed, but the rate is not locked until the actual rate-lock transaction is completed and confirmed. HUD approval is also separate from rate lock. We coordinate the proposed rate, loan amount, required deposit and closing schedule with you before proceeding.

Eligible expenses paid before closing, such as approved third-party reports, may be reimbursed or credited toward cash due at closing. Bedford reviews documentation and whether each item is an eligible mortgageable cost.

No. The initial HUD review can begin with limited documentation. The staged application process allows the design to develop before the final architectural and cost submission.

A developer’s fee may be eligible in certain nonprofit or LIHTC transactions. It is not a standard fee available on every 221(d)(4) loan. Construction-management charges are not a separate mortgageable developer’s fee. We’ll review your ownership and financing structure to determine what is allowed.

HUD reviews the financial strength, experience and track record of the ownership team in relation to the project. A credit score alone does not determine qualification. Bedford reviews the required financial support, liquidity and principal disclosures for the proposed financing.

Yes, a qualifying ground lease may be eligible. Its remaining term, provisions and lender protections must satisfy HUD requirements; Bedford can review the lease early in the process.

You do not need to own the property before beginning a financing discussion. Some form of site control is generally practical before proceeding. Bedford will review the timing of acquisition, entitlements and approvals with you.

No. Bedford does not charge for the preliminary concept review, and there is no HUD application fee at that stage. Later application fees and third-party costs are separate. Our financing fee is payable at closing, as outlined in the engagement letter.

Work outside the project’s collateral boundaries is generally paid with separate borrower funds. Certain necessary nearby utility or connection work may qualify, subject to review. Have Bedford evaluate the scope before including it in mortgageable costs.

Eligible common-area equipment and furnishings can be included. Furniture inside individual apartments, such as beds, is treated differently from eligible common-area items. Bedford will review the proposed FF&E schedule.

Discuss any proposed grading, infrastructure or construction work with Bedford before starting. Early work can affect eligibility and may require specific HUD approval. The program is intended to oversee and finance the construction process, rather than take over a partially completed project.

Qualifying Opportunity Zone projects may receive a reduced HUD application fee and processing benefits. Bedford will confirm eligibility and the fee schedule applicable to the transaction.

We typically need draft site and floor plans, a preliminary building concept, proposed rents and costs, and information about the ownership and development team. Include the contractor, architect and civil engineer, along with relevant experience and the proposed construction method. The plans can be preliminary. We use this information to prepare the narrative and exhibits for HUD’s review before scheduling the meeting.

No. The construction period is in addition to the permanent amortization, which can be up to 40 years. For example, a two-year construction period followed by 40 years of permanent amortization would have an overall term of approximately 42 years. The final schedule is established in the loan documents.

Yes. Allow for the period needed to complete cost certification and close out the construction financing. In our preliminary underwriting, we typically allow about two additional months of construction interest, then adjust the assumption to the project’s schedule. This is a budgeting assumption, not a guaranteed processing time or a replacement for the payment dates in your loan documents.

Cost certification documents the eligible costs actually incurred on the project. It is part of the process leading to final endorsement and helps establish the final mortgage amount. If actual eligible costs are lower than the amount originally budgeted, the mortgage may need to be reduced. We account for this process when preparing the construction schedule and interest budget.

No. The Builder’s and Sponsor’s Profit and Risk Allowance (BSPRA) is an underwriting allowance, not cash paid to the borrower. Its benefit depends on the eligible project structure and which loan-sizing limit controls. If project income limits the mortgage, BSPRA may provide little or no increase in proceeds. We can show its effect on your cash requirement in the initial financial model.

Eligible documented costs paid before closing, including approved reports or repairs, may be reimbursed or credited toward cash due at closing. Bedford will confirm which expenses qualify as mortgageable costs.

Routine repairs generally do not require a full architectural plan set. More extensive work or changes to walls and unit layouts may require plans and additional review. Requirements depend on the actual repair scope.

A developer’s fee may be permitted in eligible nonprofit, LIHTC or Rental Assistance Demonstration (RAD) transactions; it is not available on every acquisition or refinance. Eligibility and the permitted amount depend on the transaction structure and HUD requirements.

HUD evaluates the ownership team’s financial strength, experience and credit history in relation to the property and loan. Bedford will review the applicable principal disclosures and financial requirements; a credit score alone does not determine qualification.

Yes, a qualifying leasehold interest can be financed. Bedford will review the lease term, provisions and lender protections for compliance with HUD requirements.