A HUD-held loan is an FHA-insured loan that is now owned by HUD. Typically, this occurs when a borrower has defaulted on their loan and HUD decides to purchase the loan from the lender. In some cases, HUD will provide debt service relief to the property for a certain period of time, while creating a work-out plan to stabilize the property financially.

In relation to FHA 232 Financing, a HUD-held property is a property with an FHA-insured loan that is now owned by HUD. This can allow the borrower to gain certain benefits. In contrast, a HUD-owned property is one in which the title has been given to HUD, usually as the result of a foreclosure.

A HUD-held loan is an FHA-insured loan that is now owned by HUD. This typically occurs when a borrower has defaulted on their loan and HUD decides to purchase the loan from the lender. In some cases, HUD will provide debt service relief to the property for a certain period of time, while creating a work-out plan to stabilize the property financially. This can allow the borrower to gain certain benefits. In contrast, a HUD-owned property is one in which the title has been given to HUD, usually as the result of a foreclosure. For more information, please see HUD's Debt Service Relief Program.

A HUD-held loan can provide certain benefits to the borrower. These benefits include debt service relief, as outlined in this document from HUD. Additionally, HUD-held loans can provide access to FHA 232 financing, which can provide long-term, fixed-rate financing for healthcare and other properties.

The risks associated with a HUD-held loan include the potential for the borrower to default on the loan, resulting in HUD taking ownership of the property. Additionally, HUD may provide debt service relief to the property for a certain period of time, while creating a work-out plan to stabilize the property financially. This could result in the borrower having to pay additional fees or interest. For more information, please see HUD's Debt Service Relief Program.

The requirements for obtaining a HUD-held loan are outlined in the Debt Service Relief document provided by HUD. Generally, borrowers must provide evidence of property and liability insurance on or before the closing date or before the policy’s renewal date. In addition, the first year’s premiums must be paid in full at closing.

HUD-held loans are typically FHA-insured loans that are now owned by HUD. There are two main types of HUD-held loans:

• HUD 223(f) Loans: These are loans that are insured by HUD and are used to finance the acquisition or refinancing of multifamily properties. These loans are typically used for properties with five or more units. Learn more about HUD 223(f) Loans here.
• HUD 223(a)(7) Loans: These are loans that are insured by HUD and are used to refinance existing HUD-insured loans. These loans are typically used for properties with five or more units. Learn more about HUD 223(a)(7) Loans here.