HUD Valuation Analysis 

The valuation analysis part of a HUD-approved market study examines factors including: 

• Analyzing property as "collateral and security for a long-term mortgage"

• Estimation of market value

• Examines market need

• Residential and commercial rents

• Calculates projected expenses and estimated income

Other Valuation Inquiries 

In addition to examining these general valuation factors, a HUD-approved market study will also ask: 

• What is the duration of the project's earning capacity? (i.e. will it improve or decline over time?)

• Can rents pay:

  • Operating expenses (generally management, maintenance, utilities, and advertising)

  • Debt service (mortgage payments, HUD Multifamily MIPs)

  • Sufficient escrow deposits for reserve accounts

Market Condition Analysis 

In addition to looking generally at the project itself, a market study examine the surrounding area to put the project in the proper economic and geographic context. 

Market Condition Study Variables 

Specifically, a market study will look at factors including: 

• Geographic boundaries of the market area

• General characteristics of the market area

• Specific market conditions

• Supply and demand estimate

• Estimated absorption time

In general, market studies must have an effective date of within 120 days of submitting a pre-application. 

To learn more about how to apply for a FHA 221(d)(4) loan for your multifamily project, fill out the form below and a HUD loan specialist will get in touch.

In this article:
1. Market Studies for HUD 221(d)(4) Loans
2. HUD Valuation Analysis 
3. Other Valuation Inquiries 
4. Market Condition Analysis 
5. Market Condition Study Variables 
6. To learn more about how to apply for a FHA 221(d)(4) loan for your multifamily project, fill out the form below and a HUD loan specialist will get in touch.
7. Get Financing