HUD 223(f) Loans, a Janover property
The nation's #1 source for HUD 223(f) Loans
Our expert mortgage bankers provide HUD 223(f) loans for the acquisition and refinancing of apartment and multifamily properties nationwide.
FHA/HUD 223(f) Loans Guide
HUD 223(f) loans, which are insured by the FHA, provide the lowest-cost source of non-recourse, fixed-rate financing for the purchase or refinance of multifamily properties. Our expert HUD multifamily mortgage bankers can help you acquire HUD 223(f) financing for your project as quickly and easily as possible. As experienced capital markets advisors, we have the knowledge and expertise to guide you through each aspect of HUD's low interest, high-leverage, 35-year mortgages to acquire large multifamily properties at a low cost.
HUD 223(f) programs
Purchase or refinance, one desk.
HUD program
Acquisition Loans
- Fixed rate
- Fully amortizing
- 35-year max term
- Up to 87% LTV
HUD 223(f) acquisition loans finance the purchase of apartment and multifamily properties of any class. Terms run a 10-year minimum up to 35 years (or 75% of the property's remaining economic life, whichever is less), fixed-rate and fully amortizing, with leverage of 87% LTV for market-rate properties and up to 90% for subsidized properties. Minimum DSCR is 1.15x for market-rate properties and 1.11x for affordable.
HUD program
Refinance Loans
- Non-recourse
- 90% for subsidized
- 1.11x affordable DSCR
- Min $1M
HUD 223(f) refinance loans let owners refinance multifamily properties with the same program terms: 35-year maximum fixed-rate, fully amortizing, non-recourse debt with up to 87% LTV for market-rate properties and 90% for subsidized and rental-assistance properties. The minimum loan size is $1 million.
Why HUD 223(f)
Major benefits of the HUD 223(f) loan program.
With decades of experience in multifamily lending, we've seen the benefits of HUD 223(f) loans firsthand. Some of the most important benefits for borrowers include:
Flexible loan amounts
HUD 223(f) loans have a minimum loan amount of $1 million. However, exceptions may be made on a individual basis.
Long mortgage terms
The maximum mortgage term must be the lessor of 35 years or 75% of the project's estimated remaining economic life. In addition, the term must be long enough to allow a 10-year mortgage.
High leverage
87% LTV for market rate properties, 90% LTV for affordable properties and properties using rental assistance.
Low interest rates
Rates are highly competitive for these 35-year, fixed-rate, fully amortizing loans.
Lenient DSCR requirements
1.15x DSCR for market rate properties, 1.11x DSCR for affordable or rental assistance properties.
What are the requirements for HUD 223(f) loans?
While they have a variety of benefits, HUD 223(f) loans do have some requirements, which include:
Property age and condition: An eligible property must be at least three years old. For substantially rehabilitated properties, the work must have been completed at least three years prior. Standard, non-substantial repairs are allowed.
Replacement reserves: Must be funded monthly. For older properties, initial funding of replacement reserves could be as much as $1,000 per unit.
Audits: Annual operational audits are required.
The HUD 223(f) program keeps growing in popularity
While HUD's FHA 223(f) mortgage program has become more popular in the past decade, it's still misunderstood. Many market-rate multifamily owners and operators still believe that FHA 223(f) loans are only designed for nonprofits, low-income housing, or affordable housing projects. As a result, they've missed out on one of the housing industry's most affordable and highest-leverage financing options.
The program offers long-term financing at low interest rates with longer amortizations than Fannie Mae®, Freddie Mac® or CMBS loans. Although they do take longer to originate (average origination times are four months from application to closing), the benefits often outweigh the waiting time. On average, that's only 60 days longer than the average closing for a Freddie Mac multifamily loan or a Fannie Mae DUS multifamily mortgage.
This website offers a review of the HUD 223(f) loan program, which is designed for existing multifamily rental properties. We introduce key terms, address FAQs, and outline the application and approval process. If you have additional questions, please don't hesitate to contact us today.
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From the FAQs
Latest from the HUD 223(f) desk.
Oct 2, 2018
Special Purpose Entities (SPEs) in Relation to HUD 223(f) Loans
If you’re a HUD 223(f) loan borrower, in most cases, you will have to structure the legal entity that borrows the funds as a Special Purpose Entity, or SPE. The SPE will then own the project itself.
Oct 1, 2018
Multifamily Accelerated Processing (MAP) and the HUD 223(f) Loan Program
If you want to get a HUD 223(f) loan, there are two ways in which you may be able to apply: through MAP, or Multifamily Accelerated Processing, or TAP, or Traditional Application Processing.
Oct 1, 2018
Can HUD 223(f) Loans Be Used for Student Housing?
If you want to purchase or refinance a student housing property, can you use a HUD 223(f) loan to do so? The answer is yes, but there are certain conditions you should know about, first.
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