HUD 232/223(f) Loans for Senior Housing Investors

The Healthcare Counterpart to the Multifamily 223(f)

Most investors on this site know HUD 223(f) as the long-term, fixed-rate execution for stabilized apartment properties. HUD 232/223(f) is the parallel program for licensed care facilities. It insures loans that purchase or refinance existing skilled nursing homes, assisted living communities, memory care buildings, and board and care properties.

The two programs run through different doors at HUD. Apartment deals go to the Office of Multifamily Housing. Licensed care deals go to the Office of Residential Care Facilities and move through the LEAN processing queue. If your property provides care under a state license, the multifamily programs will not take it. This page covers what happens on the healthcare side, and how to tell which side your asset belongs on.

Which Program Fits Your Property?

The dividing line is care, not the age of the residents. A 55-plus apartment community with no services is a multifamily deal. A building where staff provide licensed nursing or help with daily living is a healthcare deal. Three tests sort most properties:

• Licensure. The facility must hold whatever license its state or municipality requires for the level of care it provides. No license, no 232/223(f).
• Resident count. The program is built for facilities serving 20 or more residents.
• Care mix. The property must deliver continuing care to the people who live there. Non-resident day care is limited to 20 percent of the project's area and 20 percent of its income.

The 25 percent independent living cap

Seniors housing rarely comes in one flavor. Many campuses mix independent living with assisted living or nursing beds. HUD draws the line at 25 percent: independent living units may make up no more than a quarter of the total. Cross that threshold and the asset stops qualifying as a healthcare facility. Properties weighted toward independent living usually fit Fannie Mae or Freddie Mac seniors housing programs better, and we quote those alongside HUD.

Commercial space is capped the same way it is on the multifamily side: no more than 20 percent of floor area and no more than 20 percent of effective income from commercial tenants. The building must also be an existing asset. As a rule it needs to have been completed at least three years before application, though later additions are fine if they are smaller than the original structure. Ground-up construction or substantial rehabilitation belongs with the standard HUD 232 program instead.

How the Loan Is Sized

Leverage

Maximum loan-to-value depends on who owns the facility and what the loan does:

• Acquisition, for-profit borrower: up to 85 percent of the lesser of purchase price or appraised value
• Acquisition, non-profit borrower: up to 90 percent of the lesser of the two
• Refinance: up to 85 percent of value for for-profits and 90 percent for non-profits, in each case limited to 100 percent of the cost to refinance

Term and coverage

The loan is fixed for its entire life and fully amortizing, with a term of up to 35 years, capped by the property's remaining useful life. Underwriting targets a minimum debt service coverage of 1.45x, a tighter floor than market-rate multifamily 223(f) requires, because a care facility carries operating risk an apartment building does not. Test your own numbers with our DSCR calculator.

There is no formal program ceiling, but the economics work best at scale. Most lenders look for loans of roughly $2 million and up.

Recourse and assumption

Like other FHA-insured executions, the debt is non-recourse outside the standard carve-outs, and a qualified buyer can assume it with HUD approval. On a 35-year fixed loan, assumability is a genuine exit tool: if rates rise, below-market debt travels with the building and supports your sale price.

Diligence and the LEAN Queue

Applications move through LEAN, the standardized process the Office of Residential Care Facilities uses for every Section 232 loan. Complete packages enter a queue and are worked in order, so the quality of the initial submission drives the schedule. The lender assembles a set of third-party reports before the application goes in:

• Appraisal by an FHA-approved appraiser
• Phase I environmental site assessment
• Architectural and engineering review of the physical plant
• Market study
• Credit review of the borrower and principals, plus the operator's licensure and survey history

All of that takes longer than bank or agency underwriting. Buyers either negotiate a longer escrow or close on interim debt first and refinance into the HUD loan afterward. Plan the deal calendar around the queue, not against it.

Mortgage Insurance: Section 232 Keeps Its Own Schedule

HUD flattened mortgage insurance premiums for its multifamily programs in 2025. Applications submitted on or after October 1, 2025 pay a flat 0.25 percent upfront and 0.25 percent per year. That change does not reach this program. Section 232 healthcare loans were excluded and keep their own MIP schedule: market-rate 232/223(f) loans carry a 1 percent premium at closing and an annual premium of 0.65 percent of the outstanding balance.

Budget the annual MIP the way you would a servicing fee. It rides on top of the note rate for the life of the loan. HUD also charges an application fee of 0.30 percent of the loan amount, and inspection fees apply when repairs are part of the transaction.

Obligations After Closing

HUD-insured debt comes with a regulatory agreement. Expect to fund a replacement reserve on a schedule set at closing, file annual financial statements, and keep the operator's license and survey record in good standing. For owners used to agency multifamily debt, the reporting is heavier. The trade is the longest fully amortizing fixed-rate term available on care assets.

The program also has built-in follow-on paths. An existing 232/223(f) loan can later be refinanced through HUD 232/223(a)(7), a streamlined track for debt HUD already insures. If the facility needs capital improvements down the road, HUD 241(a) layers supplemental financing on top of the existing insured loan without disturbing it. Our dedicated site covers the full 232 loan family in more depth.

How Janover Helps

Janover Capital LLC arranges 232/223(f) financing through FHA-approved lenders, and where the asset profile points elsewhere we quote agency seniors housing and conventional options side by side. Tell us about the facility, its license, and its census, and we will come back with sizing and the executions that fit. Reach the desk at desk@janover.co or start with a quote request.