HUD 223(a)(7) Refinancing

HUD 223(a)(7) Loans for Refinancing Current HUD Multifamily Debt

If you already have a HUD multifamily loan that is in need of refinancing, then the HUD 223(a)(7) loan is probably your most attractive option. The HUD 223(a)(7) refinance loan is designed to reduce interest rates, increase amortization, and ultimately, improve cash flow for properties, reducing the risk of default. In addition, any prepayment penalties can also be added to a borrower's HUD 223(a)(7) loan. This means that a developer won't have to provide much cash out-of-pocket if their original HUD multifamily loan is less than 10 years old.

HUD 223(a)(7) loans require remarkably little documentation; all borrowers need is a new project capital needs assessment (PNCA). Just like other HUD multifamily loans, HUD 223(a)(7) loans are non-recourse, and as if that weren’t enough, like HUD 221(d)(4) loans, HUD 223(f) properties with a certain number of affordable or low-income housing units may quality for low income housing tax credits (LIHTCs). Investors and developers looking to refinance their HUD loan may not be able to find a more attractive product on the market.

Sample Terms For HUD 223(a)(7) Loans

Size: Loans permitted up to 100% of "eligible transaction costs", including the existing debt principal, replacement reserves, prepayment penalties, and a project capital needs assessment (PCNA)

Term: Loan can increase by a period of 12 years, but new loan term cannot exceed the original loan term: 40 years for HUD 221(d)(4) and HUD 232 loans and 35 years for HUD 223(f) and HUD 232/223(f) loans

Amortization: Up to 40 years, fully amortizing

MinimumDSCR: 1.11x for for-profits, 1.05x for non-profits

MIP: Mortgage insurance premiums for HUD 223(a)(7) loans are 0.55% of the loan amount per year, or 0.45% if the property is utilizing low income housing tax credits (LIHTCs).


  • Allows term increase of up to 12 years
  • Fast processing; closing can occur in as little as 60 days
  • Loans are fully assumable (with FHA/HUD approval)
  • HUD 223(a)(7) loans are non-recourse


  • Still requires one third-party report, a project capital needs assessment (PCNA)
  • Requires an FHA application fee of 0.30% of the loan amount
  • Requires borrowers to pay both an initial, one-time MIP (mortgage insurance premium) and pay MIP each month