Tap to get financing
Nasdaq: JNVRMultifamily Loans
Property Types
MultifamilyHealth Care & Senior LivingStudent HousingAffordable HousingMobile Home ParkOffice, Retail & More
Loan Options
Fannie MaeFreddie MacConstruction LoansLoans Under $1MFreddie Mac SBLFHA/HUD Multifamily LoansForeign National LoansCMBSBank LoansLife CompaniesBridge LoansHard MoneySoft MoneyMezzanine FinancingCrowdfundingSBA 504 LoansMezzanine Construction LoansUSDA 538 LoansFix and Flip LoansFractured Condo LoansDSCR LoansRefinance
Resources
BlogLoan DocsForms and TemplatesRatesLingoVideo LibraryMultifamily For SaleCommercial MortgagesFrequently Asked QuestionsBeginner's Guide
Calculators
Multifamily Mortgage CalculatorCap Rate CalculatorNOI CalculatorDSCR CalculatorLTV CalculatorDebt Yield CalculatorCash on Cash Return CalculatorYield Maintenance CalculatorIRR Calculator
About
About UsLeadershipTeamContactAffiliate Program (Coming Soon)We're Hiring
(561) 556-5777 Get financing →
Interest Rates

Today’s rates for a wide variety of multifamily loans
Check Today's Rates →

!Learn why you should refinance your multifamily property now →
Newly Published
Dec 4 at Multifamily Loans
Multifamily Minute Reader Reflections: How Do You Invest in Apartment Buildings?
Dec 1 at Multifamily Loans
How I Started Investing in Multifamily Syndications: Part 1
Nov 28 at Multifamily Loans
Multifamily Minute Reader Reflections: When Will Deals Pick Back Up?
Explore the Janover Network
Dec 8 at Janover Inc. Investor Relations
Janover to Ring NASDAQ Closing Bell Today
Dec 7 at SBA 7(a) Loans
SBA 7(a) Loans vs. P2P Lending: the Pros and Cons of Peer Lending
Dec 4 at Janover Inc. Investor Relations
Janover Launches its First AI Chatbot SaaS Model and Offers Licensing to Select Commercial Lenders
Was This Article Helpful?
Last updated on Jan 3, 2023
3 min read

HUD 232 Loans

HUD-Insured Financing for Building or Renovating Senior Housing, Assisted Living, and Skilled Nursing Facilities

In this article:
  1. HUD 232 Healthcare Financing
  2. Sample Terms for HUD 232 Loans in 2023
  3. Eligible Properties for HUD 232 Loans
  4. Advantages
  5. Disadvantages
  6. Get Financing
Start Your Application and Unlock the Power of Choice Experience expert guidance, competitive options, and unparalleled industry expertise.
Click Here to Get Quotes →
$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!

HUD 232 Healthcare Financing

HUD 232 Loans for Building or Substantially Rehabilitating Senior Living and Healthcare Facilities

Right now, the market for senior housing is red hot-- and with 10,000 Americans turning 65 each day, it looks like the market will only be getting hotter in the foreseeable future. If you're a developer looking to expand your presence in the senior housing or healthcare market, a HUD 232 loan could be the perfect option. HUD 232 loans allow for the new construction or substantial rehabilitation of senior housing, assisted living, and skilled nursing facilities with 20 or more residents. And just like other HUD multifamily loans, HUD 232 loans are fully assumable (with FHA approval and a 0.05% fee), and are non-recourse. Plus, HUD 232 loans now use HUD 232 LEAN loan processing, a streamlined form of processing which reduces approval times and reduces the need for duplicate paperwork. 

Keep reading below to learn more, or simply click here to download our easy-to-read HUD 232 loan term sheet.

Sample Terms for HUD 232 Loans in 2023

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

LTV/Leverage: 

  • New Construction: 75% (for profit), 80% (non-profit) 

  • Substantial Renovation: 

    • 75% (for profit), 80% (non-profit), OR

    • Borrower-owned: 100% of current mortgage debt or 90% pre-rehabilitation market value (95% for non-profits)

    • Purchase/substantial rehabilitation: 85% of purchase price or 90% pre-rehabilitation market value (95% for non-profits)

  • Term: 40 years, fixed-rate 

    Amortization: Up to 40 years, fully amortizing

    Minimum DSCR: 1.45x

    MIP: Mortgage insurance premiums for HUD 232 loans include a one-time MIP fee of 1% of the entire loan amount, due at closing, and an annual MIP fee of 0.65% 

    Third-Party Reports: 

    HUD 232 loans typically require third-party reports, including: 

    • HUD/FHA Approved Full Property Appraisal

    • Borrower/Stakeholder Credit Reports

    • Plans and Specifications Review

    • Phase I Environmental Assessment

    • Architectural/Engineering Report

    • Market Study

    • Eligible Properties for HUD 232 Loans

      In order to be eligible for HUD 232 financing, a project must: 

      • House 20 or more long-term patients 

      • Provide constant/ongoing medical attention for individuals in need of care 

      • Be licensed by the appropriate city or state organization 

      • Have had construction be complete for at least three years, though newer property additions are allowed, as long as they are smaller than the original building (for HUD 232 substantial rehabilitation loans) 

      • 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 can be independent living units 

      • Have no more than 10% of the gross floor space filled and no more than 15% of the property's income derived from commercial tenants  

      • Davis-Bacon Wages: Since HUD 232 projects involve federal insurance and construction over $2000, they are subject to the Davis-Bacon act, which requires that all workers be paid the "prevailing wage" in their area. In order to determine the prevailing wage in your area, you can use this free Davis-Bacon wage calculator, provided by wdol.gov. 

        Advantages

        • Low, fixed interest rates

        • Loans are fully assumable (with FHA/HUD approval)

        • HUD 232 loans are non-recourse, limiting risks for developers

        • Disadvantages

          • Requires that borrower/owner makes regular contributions to a replacement reserve fund

          • An FHA application fee of 0.30% of the loan amount and an FHA inspection fee of 0.50% of the loan amount are both required

          • Requires both an initial, one-time MIP (mortgage insurance premium) at closing, as well as monthly MIPs throughout the life of the loan

          • Requires annual audited financial statements from owners

          In this article:
          1. HUD 232 Healthcare Financing
          2. Sample Terms for HUD 232 Loans in 2023
          3. Eligible Properties for HUD 232 Loans
          4. Advantages
          5. Disadvantages
          6. Get Financing

Getting commercial property financing should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →
Multifamily Loans

Multifamily Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, OpportunityZones Help and Groundbreaker.

Janover Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487
(561) 556-5777 
hello@multifamily.loans

Multifamily Loans

Beginner's Guide
Multifamily Refinance
Multifamily Mortgage Calculator
Current Rates
Commercial Mortgage Calculator
Commercial Loan Rates

Site Information

Privacy Policy
Terms of Use


For Lenders

This website is owned by a company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We have no affiliation with any government agency and are not a lender. We are a technology company that uses software and experience to bring lenders and borrowers together. By using this website, you agree to our use of cookies, our Terms of Use and our Privacy Policy. We use cookies to provide you with a great experience and to help our website run effectively.

Freddie Mac® and Optigo® are registered trademarks of Freddie Mac. Fannie Mae® is a registered trademark of Fannie Mae. We are not affiliated with the Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Freddie Mac or Fannie Mae.

This website utilizes artificial intelligence technologies to auto-generate responses, which have limitations in accuracy and appropriateness. Users should not rely upon AI-generated content for definitive advice and instead should confirm facts or consult professionals regarding any personal, legal, financial or other matters. The website owner is not responsible for damages allegedly arising from use of this website's AI.

Copyright © 2023 Janover Inc. All rights reserved.