HUD 232/223(f) Loans for Acquiring or Refinancing Senior Living and Healthcare Facilities

While the HUD 232 loan is a fantastic way to build or rehabilitate senior properties, if you want to purchase a property as-is, or refinance a property you currently own with HUD financing, you'll probably need a HUD 232/223(f) loan instead. Just like traditional HUD 232 loans, HUD 232/223(f) loans are designed for the financing of senior housing, assisted living, and skilled nursing facilities with 20 or more residents. Plus, these loans are fully assumable (with FHA approval), and are non-recourse. And, HUD 232/223(f) loans now use HUD LEAN processing, which reduces approval times and cuts down on excess paperwork. 

Sample Terms For HUD 232/223(f) Loans

Size:  Minimum loan of $2 million (typical loan averages $7.6 million) 


  • Purchase:
    • Non-profits: The lesser of 90% of the acquisition price or appraised value
    • For profits: The lesser of 85% of the acquisition price or appraised value
  • Refinance:
    • For profits: The lesser of 85% of the appraised value or 100% of the cost to refinance
    • Non-profits: The lesser of 90% of appraised value or 100% of the cost to refinance 

Term:  35 years, fixed-rate 

Amortization:  Up to 35 years, fully amortizing

Minimum DSCR:  1.45

MIP:  HUD 232/223(f) MIPs include an MIP fee of 1% of the loan amount, paid at closing, and an annual MIP of 0.65% 

Third-Party Reports:

HUD 232/223(f) loans require multiple third-party reports, including: 

  • HUD/FHA Approved Full Property Appraisal 
  • Borrower/Stakeholder Credit Reports 
  • Phase I Environmental Assessment 
  • Architectural/Engineering Report 
  • Market Study

HUD 232/223(f) Eligible Properties: 

In order to be eligible for HUD 232/223(f) financing, a project must: 

  • House 20 or more residents  

  • Provide ongoing medical care for long-term patients 

  • Be licensed by the appropriate municipal or state organization/agency  

  • Have been constructed least three years ago, though newer property additions are allowed, as long as they are smaller than the original structure  

  • Have no more than 20% of the project's gross area or gross income devoted to/derived from non-resident day care 

  • Have no more than 25% of all units designated as independent living units 

  • Have no more than 20% of the gross floor space filled and no more than 20% of the property's income derived from commercial tenants  


  • Low, fixed interest rates
  • Loans are fully assumable (with FHA/HUD approval) 
  • HUD 232/223(f) loans are non-recourse, limiting risks for developers 


  • Borrowers/owners must regularly contribute to a replacement reserve fund
  • FHA application fees of 0.30% of the entire loan amount and FHA inspection fees of 0.50% of the entire loan amount are required 
  • Requires both an initial, one-time MIP (mortgage insurance premium) at closing, as well as monthly MIPs througout the life of the loan