Tap to get financing
Apartment Loans
Fannie Mae
Fannie MaeMultifamily Small Loan ProgramFannie Mae DUS Loans
Freddie Mac
Freddie MacSmall Balance LoansAffordable Housing Express Loans
FHA/HUD
HUD LEAN Loan ProcessingHUD 232/223(a)(7) Refinancing LoansHUD 232/223(f) LoansHUD 241(a) Supplemental LoansHUD 232 LoansHUD 223(a)(7) Refinancing LoanHUD 223(f) LoansHUD 221(d)(4) LoansHUD Apartment Loans
Non-agency
Life Company Apartment LoansHard Money Apartment LoansApartment Bridge LoansMezzanine FinancingSmall Apartment LoansBank LoansConstruction LoansCMBS Loans
Resources
BlogApartment Building InsuranceYield Maintenance CalculatorLoan Repayment CalculatorNOI CalculatorGross Rent Multiplier CalculatorDebt Service Coverage Ratio (DSCR) CalculatorDebt Yield CalculatorCash on Cash Return CalculatorCap Rate CalculatorBreak Even Ratio CalculatorApartment Mortgage CalculatorLoan To Value and Loan To Cost RatiosApartment Finance Due Diligence ResourcesHow to Purchase an Apartment Property
For Brokers
About us
TeamLeadership
(561) 556-9997
Get financing →
Newly Published
Jul 11 at Apartment Loans
Apartment Building Insurance: Comprehensively Protect Your Property
Nov 1 at Apartment Loans
What is Conduit Financing?
Sep 9 at Apartment Loans
Operating Expense Ratio Explained
Explore the Janover Network
May 26 at HUD Loans
Construction Lender Red Flags: When to Walk Away
May 23 at HUD Loans
Top Questions to Ask Your Construction Lender Early On
May 21 at HUD Loans
How Construction Draw Processes Vary by Lender
Was This Article Helpful?
4 min read

HUD 223(f) Loans

In today's market, the HUD 223(f) loan is one of the most cost-effective methods to purchase or refinance a multifamily property.

In this article:
  1. Loans for the Acquisition and Refinancing of Multifamily Properties insured by HUD/FHA
  2. Sample Terms For HUD 223(f) Loans
  3. Commercial Space Limitations for HUD 223(f) Financing
  4. 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!

Loans for the Acquisition and Refinancing of Multifamily Properties insured by HUD/FHA

For investors who want to acquire or refinance multifamily properties, the HUD 223(f) Loan program is a highly effective option. Insured by the U.S. Department of Housing and Urban Development (HUD), HUD 223(f) loans begin at $1 million (though exceptions are sometimes made) and have no maximum loan amount. These loans offer some of the longest loan terms in the multifamily industry with a maximum term of 35 years, are non-recourse, fully assumable (with FHA approval), and offer fixed-rate financing at incredibly competitive interest rates with LTVs up to 87% for market-rate properties, and up to 90% for affordable housing properties.

Sample Terms For HUD 223(f) Loans

Size: Minimum $1 million (some exceptions allowed on an individual basis)

Term: Minimum term of 10 years, maximum of 35 years, or 75% of the property's remaining economic life, whichever is less

Amortization: Up to 35 years

Maximum LTV: 87% for market-rate properties, 90% for affordable properties

Minimum DSCR: 1.15x for market-rate properties, 1.11x for affordable properties

MIP: HUD/FHA mortgage insurance premiums include a one-time fee of 1% of the loan amount, due at closing, and an annual MIP fee of 0.60% of the loan amount (for market rate properties), or 0.45% of the loan amount (for affordable properties). HUD 223(f) properties can also qualify for a green MIP reduction to 0.25%, provided they score at least 75 on the Energy Star SEDI (Statement of Design Intent) examination. In order to maintain the reduction, the property must be re-certified every 12 months.

Low Income Housing Tax Credits (LIHTCs):

Like the HUD 221(d)(4) loan, HUD 223(f) loans allow developers to qualify for low-income housing tax credits (LIHTCs), almost $8 billion of which are available from state and local government organizations. LIHTCs function as a 4% tax credit (a 30% subsidy) or a 9% credit (a 70% subsidy), which are roughly equivalent to 4% or 9% of a project's construction costs. HUD 223(f) borrowers are typically only eligible for the 4% credit, as the 9% credit is designed for new construction or substantial rehabilitation projects.

Advantages:

  • Long terms, up to 35 years
  • Highly competitive interest rates
  • Fully assumable (with FHA approval)
  • Loans are non-recourse
  • HUD 223(f) loans permit supplemental financing
  • Disadvantages:

    • Much longer closing times than comparable loans (i.e. Freddie Mac or Fannie Mae multifamily loans) to the tune of nine months to a year
    • Can require a lot of documentation, including appraisals, market studies, and environmental reports
    • Requires the payment of a mortgage insurance premium (MIP), as a one-time fee at closing and on a monthly basis
    • Like most other HUD multifamily loans, HUD 223(f) loans require replacement reserves and annual operational audits
    • Commercial Space Limitations for HUD 223(f) Financing

      While FHA 223(f) loans are mostly intended to offer financing for multifamily apartment properties, the 223(f) program does allow for up to 20% of a property’s total net rentable area to consist of commercial space, or, alternately, up to 20% of a property’s effective gross income (EGI), to be derived from commercial tenants. While parking fees for residents do not count towards a property’s commercial income limits, parking fees paid for by non-residents do. 

      HUD’s commercial space limitations may be waived, but only under certain conditions. For example, if the property is supporting specific goals of HUD, such as transit-oriented or sustainable community development, or, if the commercial aspect of the property has a long-term lease with a credit-worthy tenant, the limitations may be waived. In general, waivers will only be issued if the property has ample cash flow and the local market supports the need for commercial development. 

      In order to qualify for a waiver, however, borrowers must ensure that both the appraisal and the market study are prepared by experts with significant experience in the type of commercial space that the project will contain. These must include estimates of commercial rental income, as well as detailed reports on local commercial vacancy rates, tenant roll-over risk, lease-up costs, and other variables that may impact the risk of the project. Furthermore, any commercial tenant that exceeds 5% of a property’s effective gross income (EGI) will need to undergo a separate credit analysis. Unfortunately, even borrowers in which the sponsor operates under a “master lease” structure must typically follow these rules.

      In this article:
      1. Loans for the Acquisition and Refinancing of Multifamily Properties insured by HUD/FHA
      2. Sample Terms For HUD 223(f) Loans
      3. Commercial Space Limitations for HUD 223(f) Financing
      4. 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 →

Janover: Your Partner in Growth

At Janover, we offer a wide range of services tailored to your unique needs. From commercial property loans and LP management to business loans and services for lenders, we're here to help you succeed.

Learn more about Janover →
Commercial Property Loans

Get the best CRE financing on the market.

Explore Financing Options →
LP Management

Syndicate deals on autopilot with Janover Connect.

Discover LP Management →
Business Loans

Match with the right kind of loan, in record time.

Find Business Loans →
For Lenders

Supercharge your loan pipeline. Unlock more deals.

Boost Your Loan Pipeline →
Apartment Loans

Apartment Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Commercial Real Estate Loans, SBA7a Loans, HUD Loans, Janover Insurance, Janover Pro, Janover Connect, and Janover Engage.

Janover Tech Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487
(561) 556-9997 
hello@apartment.loans

Loan Types

Bank Loans
CMBS
Construction Loans
Fannie Mae
Freddie Mac
HUD/FHA Apartment Loans
Commercial Loan Rates
For Commercial Mortgage Brokers

Site Information

Privacy Policy
Terms of Use


For Commercial Mortgage Brokers

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 © 2025 Janover Tech Inc. All rights reserved.

+

Fill out the form below and get the pricing and terms banks can't compete with.