HUD FHA 223(f) Apartment Loans

Low rate, high leverage, long-term permanent financing for both conventional and affordable multifamily properties

HUD Multifamily Loans

HUD FHA 223(f) Apartment Loans Overview

HUD 223(f) apartment loans are available for the acquisition or refinancing of 5+ unit multifamily properties and are a great financing option for borrowers looking for maximum leverage and longer fixed rates and terms. There are no income or rent restrictions under Section 223(f) unless otherwise required by a project based HAP contract or other regulatory agreement. HUD FHA 223(f) insured mortgages are non-recourse with no market - economic or population - restrictions.

  • Loan sizes above $2 million - no maximum
  • 83.3% LTV for market rate apartments
  • 87% LTV for project based rental assistance
  • Up to 35 year fixed rate terms
  • 1.17 minimum DSCR
  • HUD insured mortgages are non-recourse

HUD FHA 223(f) Multifamily Loan Program Guidelines

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HUD FHA 223(f) Insured Mortgage Advantages and Disadvantages

The HUD FHA 223(f) insured mortgage program for apartment and multifamily properties is one of the best financing programs available. However, it's not the right choice for every sponsor or every property. Below is what you need to know that underwriting and programs guidelines don't tell you when considering a 223(f) apartment loan.


  • Highest LTV in the market
  • Eliminate refinance and interest rate risk with fixed rate terms up to 35 years
  • Low fixed rates based on GNMA securities
  • Non-recourse and assumable - makes for a great exit strategy especially in a rising rate environment
  • No defined financial capacity requirements
  • No geographic restrictions
  • No minimum population requirements
  • Supplemental financing available
  • Funds available for repair/improvement


  • Longer processing times - 120 days at a minimum (6-9 months is typical)
  • Higher fees - HUD and FHA fees add to the overall cost of the loan
  • Mortgage Insurance Premiums (MIP) - Initial and annual premiums
  • Annual audited operating statements required
  • Replacement reserve escrows required
  • HUD property inspections required
  • Owner distribution restrictions
  • Cash out restrictions

In General

Property condition is important to HUD, both during initial underwriting and over the life of the loan. In a way, they are your partner in the project. They control owner distributions and require annual inspections and financial statement audits. A replacement reserve escrow is established at closing and HUD can determine what and when you make repairs/improvements to the property. Lastly, the 223(f) loan is costly and is a long and tedious process. The program works best for newer or recently renovated properties with experienced sponsors and third party management. If you can work with all of the above, there is no better financing option available. The 35 year fixed rate term eliminates refinance and interest rate risk, the non-recourse feature eliminates personal and contingent liability and the cost, if amortized over the term of the loan, is typically less costly than having to refinance your loan every five or ten years.

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