Multifamily and healthcare properties with existing HUD-insured debt are eligible for the HUD 223(a)(7) refinance loan program.

For more information about the HUD 223a7 refinance program, please click here.

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 Debt Service Coverage Ratio (DSCR)
  • For-profit entities: 1.11x minimum DSCR

Eligible Properties for HUD 223(a)(7) Loans: Multifamily and healthcare properties with existing HUD-insured debt are eligible for the HUD 223(a)(7) refinance loan program.

The HUD 223(a)(7) loan program offers many benefits, including:

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

For more information, please visit this page and this page.

The maximum loan amount for a HUD 223(a)(7) loan is 100% of eligible refinancing costs, including the principal amount of existing debt, fees, repairs, third-party costs, and initial reserve deposits. A minimum debt service coverage ratio (DSCR) is required - 1.11x for for-profit borrowers or 1.05x for non-profit borrowers. Source and Source.

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.

The repayment term for a HUD 223(a)(7) loan may be extended by up to 12 years, as long as the new term does not exceed the initial loan term. For a 221(d)(4) loan, the initial loan term is 40 years, and for a 223(f) loan, the initial loan term is 35 years. Learn more about the HUD 223a7 refinance program.