As seen in
As Seen in ForbesAs Seen in HousingWireAs Seen in MarketWatchAs Seen in Business InsiderAs Seen in Yahoo FinanceAs Seen in Yahoo Finance, Forbes, HousingWire, MarketWatch, BusinessInsider

HUD® 223(a)(7): Fixed-Rate, Non-Recourse Refinancing for HUD Multifamily Borrowers


Navigating HUD multifamily and HUD healthcare financing programs without prior experience can be difficult. Even investors and property owners who have previous experience with HUD loan programs may find it to be a challenge. To assist you, this website offers a comprehensive review of the HUD 223(a)(7) refinancing program.


The FHA® 223(a)(7) loan program is designed specifically to refinance certain existing HUD-insured mortgages processed by HUD-approved lenders. Below are basic facts about the FHA 223(a)(7) refinancing program including some of the main benefits to borrowers, fast facts, guidelines, and a program synopsis.

Keep reading below to learn more, or simply click here to download our easy-to-read HUD 223(a)(7) loan term sheet.

Basic Facts About The HUD 223(a)(7) Refinance Program

Just like other FHA®-insured loan programs, Section 223(a)(7) insures lenders against mortgage defaults. When a mortgage is refinanced under this program, it remains insured under the same section of the NHA (National Housing Act) as the original mortgage. For example, a mortgage insured under Section 221(d)(4) or Section 223(f) remains under that section.



78 SW 7th St.
Miami, FL 33310


[email protected] 
(855) 461-3312

Under Section 223(a)(7), the new mortgage terms can typically be extended for up to 12 years beyond the original, existing mortgage. However, the refinanced term may not extend beyond 75% of the project’s remaining useful life or the maximum term permitted by the original HUD program.

HUD 223(a)(7) Benefits to Borrowers

Primarily, borrowers who refinance through this program can benefit from reduced interest rates. On top of that, borrowers can extend their original mortgage term for up to 12 years. Unlike some other HUD multifamily loan programs, the HUD 223(a)(7) refinancing program follows an expedited process. Also, it doesn’t require a market study or appraisal.

Because the HUD 223(a)(7) refinancing program usually lowers the interest rate and extends the amortization period, it reduces the project’s debt service. As a result, it also increases cash flow. In the end, increased cash flow benefits the properties and their owners and reduces overall risk.

HUD 223(a)(7) Fast Facts

  • HUD 223(a)(7) is used to refinance existing FHA/HUD-insured debt.

  • Multifamily and healthcare properties with existing HUD-insured debt are eligible.

  • The original loan term may be extended up to 12 years. The new term cannot exceed the initial loan term.

  • HUD 223(a)(7) loans are non-recourse and fully assumable.

  • Typical closing time is 60 days from the initial application.

  • The only third-party report required by HUD is a PCNA (project capital needs assessment). It is required both initially and every 10 years.

  • There is a 0.30% application fee due when the application is submitted. Half of this is refunded after closing. Other fees and costs are usually capped at 2.0%.

Guidelines: Limits to the HUD 223(a)(7) Refinancing Program

There are limits to the HUD 223(a)(7) refinancing program. Firstly, only existing FHA-insured multifamily or healthcare properties are eligible. In addition, this program does not cover new construction, the expansion of most existing buildings, or repairs on most buildings. Funds may only be used for the following:

  • To pay off existing FHA-recognized debt

  • To cover refinancing costs

  • To cover the cost of critical and non-critical repairs

  • To pay deposits for replacement reserve accounts  

As well, the HUD 223(a)(7) refinancing program excludes Risk Share mortgages, Co-insured mortgages, Section 202 loans and other HUD-held mortgages (except those already subject to a debt restructuring under the MAHRA Act). Also, Section 223(a)(7) does not allow equity take-outs.


Below is a general synopsis of the FHA 223(a)(7) refinance program:

  • Maximum Loan Amount: Cannot exceed 100% of eligible refinancing costs - the existing loan balance, fees, repairs, third-party costs, and initial reserve deposits. Cash outs are not allowed.

  • Mortgage Terms: The existing loan term may be extended by up to 12 years without exceeding the initial loan term.

  • Interest Rates: Fixed for the life of the loan, the interest rate is based on market conditions at rate lock.

  • DSCR: Subject to a maximum DSCR of x1.11 (for-profit entities) or x1.05 (nonprofit entities).

  • Property Age and Condition: Subject to the terms of the original FHA-insured loan.

  • Audits: HUD requires annual audited financial statements.

For additional details on HUD Section 223(a)(7) refinancing please consult:

HUD Multifamily Accelerated Processing (Map) Guide, Chapter 18

HUD Appendix 6 Section 223(A)(7) Refinancing