HUD 223(f) Program - Acquisition or Refinance of Multifamily Housing

Click to download the .pdf
Property Types

Market Rate, Affordable, and Subsidized Multifamily

Eligible Borrowers

For profit and non-profit entities

Loan Amount

No Minimum/No Maximum (subject to statutory mortgage limits)

Location

Nationwide

Term & Amortization

Up to 35 years and fully amortizing

General Loan Terms

The maximum loan is the lesser of:

  • 83.3% (85% for Affordable) Loan To Value
  • 1.20x Debt Service Coverage
  • 80% Loan to Value if cash out
Interest Rate

Fixed rate, subject to market conditions at the time of rate lock

Recourse

None, except standard carve-outs

Assumable

Yes, subject to HUD approval

Prepayment

Typically loans are prohibited from prepayment for the 1st year, then have a 9% penalty declining 1% each year thereafter until 0%.  Alternative lockout and prepayment structures are available.

Mortgage Insurance Premium

1% at closing
0.60% annually

Professional Liability Insurance

HUD requires a minimum coverage of $1 million per occurrence and $3 million aggregate.  Waivers may be granted in cases where premiums are high and claim history is clean.

Other
  • Properties must average physical occupancy levels of 85% for 6 months prior to submission, and maintain that level through loan closing
  • Escrows required for repairs, mortgage insurance premium, taxes, insurance, and replacement reserves
  • Third party reports include appraisal, PCNA, and Phase I
  • Secondary financing is allowed, subject to HUD approval