Pros and Cons of HUD 223(a)(7) Refinancing

Benefits of the HUD 223(a)(7) Loan Program

HUD 223(a)(7) multifamily refinancing has several advantages and disadvantages. Some of these are outlined below:


  • This program extends the original loan term and reduces the current interest rate.

  • Borrowers can finance up to 100% of eligible costs. By increasing the unpaid principal, borrowers can cover closing costs, pay for repairs, and boost replacement reserves.

  • Since there are no new appraisals, market studies, or environmental reviews required, closing takes less time. Many 223(a)(7) loans close in 60 days or less.

  • There are fewer fees and a lower overall cost.

  • These mortgages are non-recourse and fully assumable.

  • The application process is streamlined.


  • 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.