section 223(f)


The purpose of the program is to provide attractive long term, fixed rate financing for the acquisition, moderate renovation, or refinancing of multifamily rental housing. The program provides for competitive interest rates without restriction on rental rates, cash flow or income levels of residents.


A. Personal Liability: Loans are nonrecourse to the owner and secured solely by the property.

B. Amortization: Up to 35 years (fully amortizing).

C. Term: Up to 35 years.

D. Loan Amount: The maximum insurable mortgage is the lesser of:
1. 85% of FHA’s value.
2. Amount of debt service by 85% of NOI.
3. 100% of HUD-approved transaction costs (no equity take-out).

1. 85% of FHA’s value.
2. Amount of debt serviced by 85% of NOI.
3. 85% of HUD-approved acquisition costs.

E. Secondary Financing: Surplus cash notes permitted, but are limited to 7.5% of the project’s value.

F. Repairs/Replacements: Funds for repairs, deferred maintenance and capital improvements can be included in the loan amount subject to the 85% loan to value limitation.

G. Units: The property must contain five or more dwelling units with each unit providing a complete living facility.

H. Commercial Areas & Income: Commercial areas may not exceed 20% of the total net rentable area of the property nor may commercial income exceed 25% of the estimated gross project income.

I. Interest Rates: Fixed interest rate determined by market rates at the time of rate lock.

J. Assumability: Fully assumable.

K. Pre-Payment Provisions:Negotiable, but typically closed for five years then open to pre-payment at 5% of the outstanding loan balance in year 6, declining 1% per year.