HUD Multifamily and Healthcare Financing Options

The HUD 223(a)(7) loan program is specifically designed to refinance HUD multifamily and healthcare loans for existing borrowers. The most common types of loans refinanced with the HUD 223(a)(7) program include:

  • HUD 221(d)(4) loans: Designed for the new construction and substantial rehabilitation of multifamily properties

  • HUD 223(f) loans: Intended for multifamily property acquisition and refinancing

  • HUD 232 loans: Allow for the construction and substantial rehabilitation of senior living/healthcare facilities

  • HUD 232/223(f) loans: Intended for the acquisition and refinancing of senior living/healthcare facilities

Below, we’ll go over the basic terms of each of these HUD multifamily loans to help you better understand the different financing options available on today’s market.

HUD 221(d)(4) Financing

The HUD 221(d)(4) loan program finances the construction and substantial renovation of properties with 5+ units. This can include traditional apartment buildings, mixed-use properties with a limited amount of commercial space, and even independent living projects for seniors.

HUD 221(D)(4) Loan Terms

HUD 221(d)(4) program terms include:

HUD 223(f) Financing

The HUD 223(f) program finances the acquisition and refinancing of eligible multifamily projects. Just like HUD 221(d)(4) loans, HUD 223(f) loans are designed to allow borrowers to acquire and refinance multifamily properties. Just like HUD 221(d)(4) loans, these loans can be used for apartment buildings, eligible mixed-used properties, and independent living facilities for senior citizens.

HUD 223(f) Loan Terms

HUD 223(f) program terms include:

  • Term: 35 years

HUD 232 Healthcare Loans

With a HUD 232 loan, you can build or substantially renovate healthcare properties for seniors, including nursing homes, assisted living facilities, and memory care centers.

HUD 232 Loan Terms:

  • Term: 10-year minimum, 40-year maximum, up to 35 years for non-rehab acquisitions funded with GNMA Mortgage Backed Securities. All loans fully amortizing.

  • Size: Minimum loan amount is $2 million

  • LTV: 75%- 85%, depending on property type and whether entity is for-profit or non-profit

  • DSCR: 1.45x minimum

  • Rates: Loans under the HUD section 232 program are fixed-rate

  • Recourse: These loans are fully non-recourse (though standard bad boy carve-outs typically apply)

  • Mortgage Insurance: 1% MIP charge due at closing, followed by 0.65% annual MIP assessment

HUD 232/223(f) Healthcare Financing

With a HUD 232/223(f) loan, you can refinance or acquire a variety of healthcare properties for senior citizens. Just like with HUD 232 loans, these may include assisted living centers, nursing homes, or memory care facilities.

HUD 232/223(f) Loan Terms:

  • Term: 10-year minimum, 35-year maximum (or 75% of the remaining economic life of the property, whichever is less)

  • Size: Minimum loan amount is $2 million

  • LTV: 85-90% of the acquisition price or appraised value for purchases, 100% of the cost to refinance or 85-90% of appraised value for refinances

  • DSCR: 1.45x minimum