HUD 223(f) Loan Program

HUD 223(f) Loans for Purchasing or Refinancing Multifamily Properties

If you're looking to purchase or refinance an apartment building or multifamily property with five or more units, a HUD 223(f) loan could be your best option. Insured by the U.S. Department of Housing and Urban Development (HUD), these loans are non-recourse, fully assumable (with FHA approval), and offer fixed-rate financing at incredibly competitive interest rates. If that weren't enough to interest you, HUD 223(f) loans also offer some of the longest loan terms in the multifamily industry, with a maximum term of 35 years. 

Keep reading below to learn more, or click here to download our easy-to-understand HUD 223(f) loan term sheet.

Sample Terms For HUD 223(f) Loans 2021

Size:  Minimum $1 million (some exceptions allowed on an individual basis)

Term: Minimum term of 10 years, maximum of 35 years, or 75% of the property's remaining economic life, whichever is less                              

Amortization: Up to 35 years

Maximum LTV83.3% for market-rate properties, 85% for affordable properties, 87% for rental assistance properties                

Minimum DSCR:  1.17x for market-rate properties, 1.15x for affordable properties

MIP:  HUD/FHA mortgage insurance premiums include a one time fee of 1% of the loan amount, due at closing, and an annual MIP fee of 0.60% of the loan amount (for market rate properties), or 0.45% of the loan amount (for affordable properties). HUD 223(f) properties can also qualify for a green MIP reduction to 0.25%, provided they score at least 75 on the Energy Star SEDI (Statement of Design Intent) examination. In order to maintain the reduction, the property must be re-certified every 12 months.  

Low Income Housing Tax Credits (LIHTCs): 

Like it's cousin, the HUD 221(d)(4) loan, HUD 223(f) loans allow developers to qualify for low income housing tax credits (LIHTCs), almost $8 billion of which are available from state and local government organizations. LIHTCs function as a 4% tax credit (a 30% subsidy) or a 9% credit (a 70% subsidy), which are roughly equivalent to 4% or 9% of a project's construction costs. HUD 223(f) borrowers are typically only eligible for the 4% credit, as the 9% credit is designed for new construction or substantial rehabilitation projects. 


  • Long terms, up to 35 years

  • Highly competitive interest rates

  • Fully assumable (with FHA approval)

  • Loans are non-recourse

  • HUD 223(f) loans permit supplemental financing


  • Somewhat longer closing times than comparable loans (i.e. Freddie Mac® or Fannie Mae® multifamily loans)

  • Can require a lot of documentation, including appraisals, market studies, and environmental reports

  • Requires the payment of a mortgage insurance premium (MIP), as a one-time fee at closing and on a monthly basis

  • Like most other HUD multifamily loans, HUD 223(f) loans require replacement reserves and annual operational audits

  • Owner distributions are limited to 2x a year