No, the HUD 223(a)(7) loan program does not allow for cash out refinancing. However, additional funds may be allowed to cover costs such as repairs and improvements along with transaction and closing costs. In addition, outstanding debt incurred which stems from capital improvements to the property could be allowed (subject to HUD approval).

To learn more about the HUD 223a7 refinance program, fill out the form below to speak to a HUD/FHA loan expert.

The HUD 223(a)(7) loan program does not allow for cash out refinancing. Instead, the 223(a)(7) loan can only finance certain eligible costs, including 100% of the property’s existing mortgage, third-party reports, minor/moderate property repairs, replacement reserves, prepayment penalties (if the borrower is paying off their HUD multifamily loan early), and certain other costs. Borrowers who wish to get cash out from a multifamily property may wish to look towards other types of financing, such as a CMBS loan.

The FHA and HUD 223(a)(7) loan program has a maximum loan amount of 100% of the eligible transaction costs, including the principal amount of existing debt, prepayment penalties, repairs, fees, third-party reports, and initial reserves deposit. The loan is subject to a maximum DSCR of 1.11x for for-profit entities and 1.05x for nonprofit entities. Expenses are underwritten based on the last three years of actual operating data and FHA field office estimates.

To learn more about the HUD 223a7 refinance program, fill out the form below to speak to a HUD/FHA loan expert.

The HUD 223(a)(7) cash out refinance program offers several benefits, including:

• Extending the original loan term and reducing the current interest rate.
• Financing up to 100% of eligible costs, including closing costs, repairs, and replacement reserves.
• No new appraisals, market studies, or environmental reviews required, resulting in a faster closing process.
• Fewer fees and a lower overall cost.
• Non-recourse and fully assumable.
• A streamlined application process.

The HUD 223(a)(7) loan program does not allow for cash out refinancing, so there are no risks associated with it. Instead, the 223(a)(7) loan can only finance certain eligible costs, including 100% of the property’s existing mortgage, third-party reports, minor/moderate property repairs, replacement reserves, prepayment penalties (if the borrower is paying off their HUD multifamily loan early), and certain other costs. Borrowers who wish to get cash out from a multifamily property may wish to look towards other types of financing, such as a CMBS loan. Additionally, the HUD 223(a)(7) loan program has some cons, such as:

• These loans are only available to refinance existing HUD-insured mortgages on multifamily and healthcare properties.
• The refinanced amount cannot exceed the amount of the original mortgage.
• Cash outs are restricted.
• It excludes certain products including Risk Share mortgages, Co-insured mortgages, Section 202 loans, and certain other HUD-held mortgages.

To learn more about the HUD 223a7 refinance program, fill out the form below to speak to a HUD/FHA loan expert.

The HUD 223(a)(7) loan program does not allow for cash out refinancing. Instead, the 223(a)(7) loan can only finance certain eligible costs, including 100% of the property’s existing mortgage, third-party reports, minor/moderate property repairs, replacement reserves, prepayment penalties (if the borrower is paying off their HUD multifamily loan early), and certain other costs. Borrowers who wish to get cash out from a multifamily property may wish to look towards other types of financing, such as a CMBS loan.

The FHA and HUD 223(a)(7) loan program is limited to 100% of the eligible transaction costs, including the principal amount of existing debt, prepayment penalties, repairs, fees, third-party reports, and initial reserves deposit. The loan is subject to a maximum DSCR of 1.11x for for-profit entities and 1.05x for nonprofit entities. Expenses are underwritten based on the last three years of actual operating data and FHA field office estimates.

To learn more about the HUD 223a7 refinance program, fill out the form below to speak to a HUD/FHA loan expert.

The HUD 223(a)(7) refinance program typically closes about 60 days after the application is submitted. This source and this source both confirm this timeline.