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Last updated on Aug 23, 2022
2 min read

HUD 232/223(a)(7) Refinancing Loans

The HUD 232/223(a)(7) refinancing process is incredibly streamlined, only requires one third-party report, and can close in as little as 60 days.

In this article:
  1. Refinancing for Current HUD 232 or HUD 232/223(f) Borrowers Insured by HUD
  2. 2021 Sample Terms For HUD 232/223(a)(7) Loans
  3. Advantages:
  4. Get Financing
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Refinancing for Current HUD 232 or HUD 232/223(f) Borrowers Insured by HUD

For current HUD 232 or HUD 232/223(f) borrowers looking to potentially reduce their interest rate, increase their loan's amortization, and improve their property's cash flow, the most attractive financing option is typically the HUD 232/223(a)(7) Refinancing Loan. Much like the HUD 223(a)(7) refinance, the process is incredibly streamlined, only requires one third-party report, and can close in as little as 60 days. Like many other forms of HUD multifamily financing programs, HUD 232/223(a)(7) refinance loans are fully assumable and non-recourse, but, unlike other HUD multifamily loans, these loans require very little paperwork and only one third party report.

2021 Sample Terms For HUD 232/223(a)(7) Loans

Size: Loans are allowed up to 100% of the "eligible transaction costs", which include the principal of the project's existing debt, prepayment penalties, funding for required replacement reserves, and a project capital needs assessment (PCNA)

Term: The loan can increase by a period of up to 12 years, but the new loan term may not exceed the original loan term: 40 years for HUD 232 loans and 35 years for HUD 232/223(f) loans

Amortization: Up to 40 years, fully amortizing

Minimum DSCR: 1.11x for for-profits, 1.05x for non-profits

MIP: HUD 232/223(a)(7) loans have an annual MIP of 0.55% of the entire loan amount, or 0.45% if the project is using low-income housing tax credits (LIHTCs)

Advantages:

  • Allows term increase of up to 12 years
  • Streamlined processing; loans can close in as few as 60 days
  • Less paperwork and fewer reports required
  • Loans are fully assumable (with FHA/HUD approval)
  • HUD 232/223(a)(7) loans are non-recourse
  • Disadvantages:

    • The loan 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) fee and pay additional MIP each month
In this article:
  1. Refinancing for Current HUD 232 or HUD 232/223(f) Borrowers Insured by HUD
  2. 2021 Sample Terms For HUD 232/223(a)(7) Loans
  3. Advantages:
  4. Get Financing

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Apartment 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, and OpportunityZones Help.

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