What is SPRA (Sponsor's Profit and Risk Allowance)?

SPRA (Sponsor's Profit and Risk Allowance) Definition

SPRA (Sponsor's Profit and Risk Allowance) is no more than 10% of the total estimated cost of: architect's fees, legal, organizational, carrying and financing charges, and audit expenses. It is included in the Replacement Costs and used if there is no identity of interest between the mortgagor and general contractor. Similar to SPRA, BSPRA (Builder-Sponsor's Profit and Risk Allowance) is a 10% allowance used when there is an identity of interest between the mortgagor and general contractor. Both SPRA and BSPRA are typically only used for HUD 221(d)(4) loans.


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