An FHA-insured loan is a mortgage backed by FHA mortgage insurance. FHA mortgage insurance helps lenders hedge against the risk of a loan default. This encourages lenders to lend to borrowers that they might ordinarily see as too risky. Examples of FHA-insured loans include HUD 232 and HUD 232/223(f) loans. For more information, see FHA-Insured Loans and FHA-Insured Loans in Relation to HUD 232 Loans.

FHA-insured loans offer several benefits to borrowers. These include lower down payments, more flexible credit requirements, and lower closing costs. Additionally, FHA-insured loans are backed by the government, which can provide additional security to lenders. This can make it easier for borrowers to qualify for a loan, even if they have a lower credit score or limited funds for a down payment. Sources: hud223a7.loan/glossary/fha-insured-loans, hud232.loan/hud-232-glossary/fha-insured-loans

FHA-insured loans are mortgages backed with FHA mortgage insurance. The FHA insures a variety of loans under its various programs, including the 203(b) and 203(k) loan programs for single-family homes, duplexes, triplexes, and quadplexes. The FHA also insures loans for multifamily and healthcare properties under the HUD 221(d)(4), HUD 223(f), HUD 232, and HUD 223(a)(7) programs.

The requirements for an FHA-insured loan include having property and liability insurance for the duration of the loan. The first year’s premiums must be paid in full at closing. In addition, borrowers must provide their lenders with evidence of insurance on or before the closing date or before the policy’s renewal date. For more information, please refer to the HUD 232 Insurance Requirements page.

Properties eligible for an FHA-insured loan include multifamily and healthcare properties with existing HUD mortgages of all types, such as market-rate, mixed-income, subsidized, and affordable properties. For more information, please refer to this page and this page.

The current interest rates for an FHA-insured loan are 4.09% - 6.59%, with a term of 5 - 35 years, according to Multifamily Mortgage Rates. This rate is tied to the relevant SOFR index.

The maximum loan amount for an FHA-insured loan refinancing of existing FHA-insured multifamily or healthcare loans can only cover the existing loan’s principal balance and additional eligible refinancing costs such as fees, repair costs, third-party costs, initial reserve deposits, etc. (HUD 223(a)(7) Mortgage Terms and Interest Rates). Additionally, the minimum Debt Service Coverage Ratio (DSCR) is 1.11x for for-profit borrowers or 1.05x for non-profit borrowers (The FHA and HUD 223(a)(7): Refinancing Existing HUD Loans).