HUD FHA 223(a)(7) multifamily mortgages are available for the refinancing of existing HUD FHA insured multifamily loans and healthcare loans under Section 223(f) and Section 232. Streamlined processing results in quicker closings with fewer fees.
Streamlined processing
Fewer fees and lower overall cost
Extend original term of loan
Reduce current interest rate
Finance up to 100% of eligible costs
Fast closings - no new appraisal, market study or environmental required
Close in as few as 60 days
HUD FHA 223(a)(7) Multifamily Loan Program Guidelines
eligible properties
Multifamily and Healthcare properties with current FHA insured loans.
eligible locations
Nationwide
maximum loan size
The Lesser of:
Original principal amount of existing insured mortgage;
DSC of 1.11x (1.05x for non-profit borrowers);
100% of eligible transaction costs, including existing indebtedness, repairs, fees, third party costs and initial reserve deposit.
maximum term
Up to 12 years beyond the remaining term of the existing mortgage, but not to exceed the original term.
guarantee
Non-recourse.
minimum occupancy
Property must demonstrate a pattern of stable occupancy for 6-Months prior to application and maintained until closing.
interest only
N/A
prepayment
Negotiable - typically a two-year lock out followed by a step down premium (e.g. 8,7,6,5,4,3,2,1).
guarantee
Non-recourse subject to standard carve-outs.
assumable
Yes.
cash out
Cash out restricted. Loan amount may be increased to cover funds for repairs, improvements and transaction and closing costs. Outstanding debt incurred in connection with capital improvements already made to the property may also be included in the loan amount, subject to HUD approval.
third party reports
Refinancing under HUD FHA Section 223(a)(7) does not require a new appraisal, market study or environmental assessment. A PCNA is required as part of the application and required every 10 years thereafter.
sponsor requirements
Refinancing of existing HUD FHA insured mortgages requires minimal underwriting of the sponsor.