HUD 223(a)(7) Loan - Refinance of Existing HUD Loans

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Eligible Properties

Existing HUD-insured multifamily and healthcare properties.

Eligible Borrowers

Single-asset, special purpose entities, either for-profit or non-profit.



Loan Amount

Existing HUD-insured loan may be increased back up to 100% of the original principal balance (subject to General Loan Parameters).

General Loan Parameters

The maximum loan amount is the lesser of:

  • The original HUD-insured loan amount.
  • The outstanding HUD-insured loan amount plus all closing costs, capital improvements, prepayment penalties, and repairs.
  • Minimum DSCR of 1.11x (1.05x for 90% subsidized properties).
Interest Rate

Fixed-rate, subject to market conditions at time of rate lock.

Term & Amortization

The term of the existing HUD-insured loan may be extended by up to 12 years (subject to HUD approval) not to exceed the term of the original loan.



Mortgage Insurance Premium

0.50% at closing,
0.50% annually thereafter
(0.25%-0.35% for affordable and subsidized properties, 0.25% for Energy Star certified properties).


Fully assumable, subject to HUD approval


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.

Professional Liability Insurance

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

  • Cash out refinancing is not permitted.
  • PCNA report required for Multifamily and term extensions.