Acquisition/ Refinance Construction 223(f)

Acquisition and Refinancing of Multifamily Properties

Eligible Properties

Existing multifamily structures, at least three years old, with market rate, moderate income or subsidized rents

Commercial Space

Limited to 20% of net rentable area and 20% of effective gross income limitation


Single asset, special purpose entity, either for profit or non-profit

Loan Amount

No maximum (Limited by loan parameters)



Interest Rate

Fixed for term of loan, determined by market conditions at time of rate lock (Rate lock deposit is 1% and refunded at closing)

Loan Parameters

Maximum loan amount will be the lowest of:
a) Applicable % LTV;
b) Applicable Debt Service Coverage Ratio;
c) 85% of Transaction Costs, if purchase transaction;
d) Greater of 100% of Transaction Costs or 80% LTV, if refinancing transaction;
e) HUD Mortgage Statutory Limits, adjusted for local high cost factors
– For market rate properties, applicable factors: 83.3% LTV, 1.20 DSCR
– For affordable properties, applicable factors: 85% LTV, 1.176 DSCR
– For properties with 90% or >rental assistance, applicable factors: 87% LTV, 1.15DSCR
– For 202 properties, applicable factors: 90% LTV, 1.11 DSCR

Term and Amortization

A maximum term of 35 years, fully amortizing<

Prepayment and Assumption

Negotiable with best pricing for 10 years of call protection (can be a combination of lockout and/or penalty); Loan is fully assumable subject to HUD approval


a) Taxes and insurance are escrowed monthly;
b) Replacement reserve required and the monthly deposit amount determined in accordance with HUD guidelines on a property-specific basis (minimum $250/unit/year

Mortgage Insurance Premium

1% due to HUD at closing and 0.45% annually thereafter, escrowed monthly

HUD Application Fee

30 basis points ($3 per $1,000) on requested loan amount (due with submission of firm application to HUD)

Third Party Reports

Appraisal, Phase I and Physical Needs Assessment are required; A market study may be required for declining markets.


Typical firm application is submitted within 45-60 days of engagement; HUD then has a target of 60 days to issue Firm Commitment; Closing normally occurs 30-45 days thereafter

Multifamily Financing Overview

Multifamily Financing OverviewProperty Types Financed
Typical Loan Structure

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