HUD Loan Types

HUD 223(f) Loans for the Acquisition and Refinancing of Multifamily Properties
The HUD 223(f) loan is a highly effective option for borrowers who want to acquire or refinance multifamily properties. HUD 223(f)loans begin at $1 million (though exceptions are sometimes made) and have no maximum loan amount. These loans typically have a 35-year fixed-rate term, though the term can be as short as 10 years, as-long-as the loan remains fully amortizing. 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).

HUD 221(d)(4) Loans for New Construction and Substantial Rehabilitation
‍The HUD 221(d)(4) loan is perhaps the industry's best and most affordable loan option for developers who want to build or substantially rehabilitate a multifamily property. These loans begin at $4 million and can go up to $100million or more, and are available for market-rate, affordable, and rental-assistance developments. Plus, HUD 221(d)(4) loans have 40-year fixed-rate terms, plus a 3-year interest-only construction period. For properties with a significant amount of affordable housing units, developers may be able to take advantage of low-income housing tax credits (LIHTCs). In addition, these loan scan take advantage of a builder sponsor profit and risk allowance (BSPRA), which allows the general contractor to take a small amount of equity in the project, which can significantly reduce the amount of cash needed at closing.