Government-insured
HUD 223(f) Loans, Explained
A 35-year fixed, fully amortizing, non-recourse refinance or acquisition loan for stabilized apartments. Here is what it costs, how long it takes, and when it beats agency.
What a 223(f) loan is
Section 223(f) is HUD's program for the acquisition or refinance of existing, stabilized multifamily properties. The federal government insures the loan, which is why 223(f) offers what nothing else in the permanent-debt market does: a fixed rate for up to 35 years, fully amortizing, non-recourse, with no balloon and no refinance risk in year ten. For owners with a long hold horizon, it is terminal financing.
The headline terms
| Loan size | From about $3,000,000; no set maximum |
|---|---|
| Leverage | Up to ~87% LTV for market-rate deals (90% affordable); cash-out capped near 80% |
| Term / amortization | Up to 35 years, fixed for the full term, fully amortizing |
| DSCR floor | 1.15x market-rate (1.11x affordable) |
| Recourse | Non-recourse |
| Mortgage insurance | 0.25% annual MIP plus 0.25% upfront for multifamily applications on or after October 1, 2025 |
| Timing | Typically four to six months from engagement to closing |
Indicative of HUD program parameters as of mid-2026. Leverage and DSCR floors vary by affordability level; every quote is deal-specific.
What the trade-offs are
HUD execution is slower and more paperwork-intensive than agency or bank alternatives: third-party reports, HUD queue times, replacement reserve requirements, and annual audited financial statements after closing. Sponsors planning to sell within a few years usually belong elsewhere, and an honest advisor will say so early. The premium you collect for the paperwork is leverage, term, and rate stability that no other permanent execution matches.
223(f) versus agency debt
Fannie Mae and Freddie Mac will usually close faster, with lighter ongoing requirements, at 5 to 30 year terms and leverage up to about 80%. HUD wins on maximum leverage, a 35-year flat amortization, and lifetime rate certainty. The right answer is arithmetic, not ideology: model both against your hold period and exit, and let the numbers decide. We routinely run HUD executions head-to-head against agency alternatives so the comparison is explicit.
Is your deal a candidate?
Stabilized occupancy, competent management, and a sponsor comfortable with process. Construction and substantial rehabilitation belong in HUD's 221(d)(4) program instead, and licensed senior housing or care facilities run through Section 232. If you are not sure which lane your deal fits, send us the basics; sizing it across programs costs nothing.
For standing program reference, our affiliated publishing sites keep a long-form HUD 223(f) guide and current multifamily rate tables on Multifamily.loans, and a full HUD program library at HUD.loans.
General information, not financial, legal, or tax advice. Program parameters change over time; actual terms are set by lenders at quote. See our Terms of Use.
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