What are the Fees for HUD 223(a)(7) Loans?
HUD 223(a)(7) loans require a HUD application fee (0.3% of the loan amount) which is due at application. Half of this is refunded after closing. Other fees and costs for the HUD 223(a)(7) program are usually capped at 2.0%.
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HUD 223(a)(7) loans require a HUD application fee (0.3% of the loan amount) which is due at application. Half of this is refunded after closing. Other fees and costs for the HUD 223(a)(7) program are usually capped at 2.0%.
To learn more about the HUD 223a7 refinance program, fill out the form below to speak to a HUD/FHA loan expert.
Related Questions
What are the closing costs associated with a HUD 223(a)(7) loan?
Closing costs associated with a HUD 223(a)(7) loan include an application fee equal to 0.3% of the loan amount due at the time of application, half of which is refunded after closing. The balance of fees and costs are typically capped at 2.0%.
For more information, please visit HUD 223(a)(7) Fees and FHA and HUD 223(a)(7): Refinancing Existing HUD Loans.
What are the fees associated with a HUD 223(a)(7) loan?
The HUD 223(a)(7) loan requires an application fee of 0.3% of the loan amount due at the time of application, half of which is refunded after closing. The balance of fees and costs are typically capped at 2.0%.
For more information, please visit HUD 223(a)(7) Fees and FHA and HUD 223(a)(7).
What are the upfront costs for a HUD 223(a)(7) loan?
The upfront costs for a HUD 223(a)(7) loan include an application fee equal to 0.3% of the loan amount due at the time of application, half of which is refunded after closing. The balance of fees and costs are typically capped at 2.0%.
For more information, please visit HUD 223(a)(7) Fees and FHA and HUD 223(a)(7): Refinancing Existing HUD Loans.
What are the interest rates for HUD 223(a)(7) loans?
The interest rate on HUD 223(a)(7) refinancing loans remains fixed for the life of the loan. The actual rate is based on the relevant SOFR index at rate lock. For more information, you can download our easy-to-understand HUD 223(a)(7 loan term sheet.
What are the loan terms for HUD 223(a)(7) loans?
HUD 223(a)(7) loans have terms including:
- Loan Size: Loans are allowed up to 100% of the eligible transaction costs, including:
- Existing debt principal
- Eligible repairs
- Initial replacement reserves
- Prepayment penalties
- Third-party reports (the only one required is a project capital needs assessment, or PNCA)
- Loan Term: May be increased up to 12 years, as long as the new loan doesn't have a term greater than 40 years (for HUD 221(d)(4) loans and HUD 232 loans) or 35 years (for HUD 223(f) and HUD 232/223(f) loans)
- DSCR:
- Non-profit entities: 1.05x minimum DSCR
- For-profit entities: 1.11x minimum DSCR
For more information, you can download our easy-to-understand HUD 223(a)(7 loan term sheet.
- Loan Size: Loans are allowed up to 100% of the eligible transaction costs, including:
Are there any prepayment penalties for HUD 223(a)(7) loans?
Yes, HUD 223(a)(7) loans typically allow prepayment. However, there is often a 0-2 year lockout period, during which the loan cannot be prepaid at all, followed by an 8-10% declining prepayment penalty. This means that the prepayment penalty will decline by 1% each year, starting after the lockout period ends.
For instance, if a loan had a 1-year lockout period, followed by an 8% declining prepayment penalty, and a borrower wanted to pay off the loan after the first year, they would need to pay a penalty of 8% of the remaining loan. However, if they waited until after the fourth year, they would only need to pay 5% of the remaining loan amount. After the ninth year, there would be no penalty to prepay the loan.