What is an Interest-Only Fixed-Rate Loan?

Interest-Only Fixed-Rate Loan Definition

Interest-only fixed-rate loans are mortgages in which a borrower pays only interest and nothing towards the mortgage principal. Interest-only fixed-rate loans are only offered by two HUD multifamily loan programs, the HUD 221(d)(4) program, and the HUD 232 program. In both cases, these loans are offered for up to 3-year periods during the construction phase of a project.

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