HUD 241(a) Supplemental Loans

HUD 241(a) Supplemental Financing for Apartment Buildings and Multifamily Properties

If you already have a HUD multifamily loan, that's great, but what if you want to make improvements to the property? Well, HUD has the perfect solution for you. A HUD 241(a) loan is specifically designed for current HUD multifamily borrowers who want to upgrade an existing property, and can be used for expanding current buildings, buying new safety equipment, or even increasing a building's energy efficiency. In addition, HUD 241(a) loans are non-recourse and fully assumable (with HUD/FHA approval.)  

Keep reading below to learn more, or simply click here to download our easy-to-read HUD 241(a) loan term sheet.

Sample Terms For HUD 241(a) Loans

Size: HUD 241(a) loans are limited by the smallest of the three options below: 

  • For-profits: 90% of the value of a new construction project, Non-profits: 95% of the value of a new construction project

  • The maximum insurable amount of the project, as calculated by the FHA

  • 90% of the property's net operating income (NOI), including payments for the original loan

Term: Term must be identical to the current loan; however, if there are less than 25 years left on that loan, the HUD 241(a) loan term can be expanded to 40 years 

Amortization: Up to 40 years, fully amortizing

Minimum DSCR1.11x


  • Highly competitive, fixed interest rates

  • Loans are fully assumable (with FHA approval)

  • HUD 241(a) loans are non-recourse


  • Requires a variety of third-party reports, including environmental assessments, architectural and engineering reports, and full HUD/FHA appraisals

  • Requires an FHA application fee of 0.30% of the loan amount and a 0.50% FHA inspection fee

  • Requires a one-time mortgage insurance premium (MIP) at closing, and payment of monthly MIPs throughout the duration of the loan