United Bank & Trust Blog

Maybe…but let’s drill down a bit.

There’s no question these features of a HUD loan grab your attention:

• Low fixed rate mortgages – today, that rate is around 4%
• Up to 35 year fixed rate loans
• Up to 90% of value can be financed
• No personal guarantees

But, here are some of the things you may not realize:

• Only apartments, senior housing and some senior housing health care related properties are generally eligible to be financed by HUD
• As of today, it probably takes up to 12 months (longer if construction) to close due to the heavy volume of loan applications.  So, if you’re buying a property or have a loan maturity in the next couple of months and need to close by a specific date, it may not work for you.
• Escrows – real estate taxes, property insurance and replacement reserves for future capital repairs and maintenance must be deposited in  escrow each month on top of principal and interest payments
• Costs – legal, feasibility study, appraisal, environmental and survey costs are all slightly higher than a typical commercial mortgage

So, when all of the above elements are combined with the related HUD and Loan Origination Fees, it usually suggests a loan amount around $5 million+ for this type of loan to make economic sense.

For additional questions about HUD or any other commercial mortgage loans, please contact me at jkleinschmidt@ubat.com.

The AnnArbor.com Business Review highlighted some exciting news from the FDIC in a recent report indicating that community banks have increased their market share in Washtenaw County to 28.1%.

What does this mean?

It means that residents in our community are moving their money to the local banks and credit unions that have been here all along volunteering, lending and advising in their cities.

United is very proud to be listed among the community banks that are gaining in deposit market share, and are excited at the recent news that we are the #1 mortgage lender, and continue to be the #1 small business (SBA) lender in Washtenaw County. We feel strongly that all of these great measures demonstrate our commitment to being a contributor to our community.

We are extremely proud of our community scorecard and our client satisfaction survey results, which tell us that not only are folks bringing their deposits to us, but that we are delivering on our promise to treat our clients differently than the big banks and to use the money they entrust to us to help the community in which we all live and work.

Do you know what your bank does with your deposits?

For more information on why Local Matters, contact me at tclark@ubat.com.

The President signed the Small Business Jobs and Credit Act on September 27, 2010 which will make some changes to the SBA lending programs that have been a long time coming.

These important changes provide the following benefits to small business owners:

• Permanently increases loan limits for the SBA 7a loan program – $5MM gross $3.75MM guaranty amount – and SBA 504 loan program – $5MM guaranty  amount or $5.5MM for manufacturing or energy loans

• New size standards for the borrower including a maximum tangible net worth of $15MM and a maximum 2 year average net income after federal tax of $5MM

• Added property types such as Storage Unit Facilities

We feel these changes provide a win-win situation for United Structured Finance, our communities, and most importantly our clients. To learn more check out articles on The White House Blog and the New York Times.