Tap to get financing
HUD Loans
HUD Loans
Loan Programs
FHA & HUD LoansHUD 221(d)(4)HUD 223(f)HUD 223(a)(7)HUD 241(a)HUD 232/223(f)
Calculators
Break-Even Ratio CalculatorCap Rate CalculatorCash-on-Cash Return CalculatorCommercial Mortgage CalculatorDebt Yield CalculatorDSCR CalculatorLoan Repayment CalculatorLTV CalculatorNOI Calculator
Resources
BlogLoan DocsHUD REAC InspectionsHUD Section 202 Supportive HousingHAP Contracts2021-2022 HUD Multifamily Basic Statutory LimitsFrequently Asked Questions
About
CompanyLeadershipTeamWe're Hiring
Contact Us
Get financing
Was This Article Helpful?
Newly Published
Oct 5 at HUD Loans
HUD’s New Surplus Cash Distribution Changes
Oct 3 at HUD Loans
What Are Replacement Reserves?
Sep 12 at HUD Loans
Is HUD Financing Available for Assisted Living Facilities?
Explore the Janover Network
Feb 2 at Multifamily Loans
Top 10 Fannie Mae Multifamily Lenders of 2023
Jan 31 at Commercial Real Estate Loans
Top 10 Commercial Property Management Companies of 2023
Jan 30 at Commercial Real Estate Loans
Top 5 Markets for Medical Office Investing in 2023
HUD Multifamily Loans Blog
Last updated on Dec 8, 2022
3 min read
by Content Team

How to Get the Lowest Rates and Longest Terms for Multifamily Financing

FHA-insured financing offers some of the industry's longest terms, even up to a maximum of 43 years for HUD 221(d)(4) loans.

Get Quotes ← Apply for a loan in minutes and get multiple quotes today

In this article:
  1. FHA-insured Financing: Low Interest Rates, Long Terms
  2. HUD 223(a)(7) Refinancing and HUD 241(a) Supplemental Loans Offer Borrowers More Options
  3. Get Financing

FHA-insured Financing: Low Interest Rates, Long Terms

Many people aren’t aware that FHA-insured financing offers some of the industry’s longest terms for the construction, substantial rehabilitation, acquisition, and refinancing of multifamily properties.

For example, the HUD 221(d)(4) program is a fixed-rate construction and substantial rehabilitation loan. This product is fixed for 40 years plus up to 3 years for construction (43 years total). In the past year, HUD 221(d)(4) interest rates ranged lower than anywhere else in the industry. HUD 221(d)(4) loans also offer up to 85% LTV for market-rate properties, and up to 90% LTV for subsidized properties.

In addition, HUD 223(f) loans for multifamily acquisition and rehabilitation are fully amortizing for as long as 35 years (as long as the term and amortization isn’t more than 75% of the property's remaining economic life). HUD 223(f) loan rates are also highly competitive, with below-market rates. These loans also offer the same leverage terms as HUD 221(d)(4) financing.

Overall, longer amortizations produce lower payments. Moreover, these products come with lower rates than Fannie Mae and Freddie Mac 10-year fixed-rate loans. Furthermore, FHA-insured loans are government-insured loans that earn a AAA credit rating.

HUD 223(a)(7) Refinancing and HUD 241(a) Supplemental Loans Offer Borrowers More Options

If you do decide to get a HUD 221(d)(4) or HUD 223(f) loan, you can easily refinance it through the HUD 223(a)(7) loan program, which allows borrowers to extend the original term of the loan by up to 12 years. Just like other FHA multifamily loans, 223(a)(7) loans are non-recourse and fully assumable. However, unlike other types of HUD multifamily financing, these loans close in as little as 60 days, and only require one type of third-party party report, a PCNA, or project capital needs assessment.

And, if you’re interested in getting additional financing for your property in order to make safety upgrades, environmental or energy efficient improvements, or expanding the footprint of current buildings on the property, HUD can also provide financing in the form of a HUD 241(a) supplemental loan. HUD 241(a) loans offer up to 90% LTC for for-profit entities, and up to 95% LTC for non-profits.

In addition to the fact that these loan products are fully amortizing and have the industry’s longest amortizations, FHA-insured financing provides the most flexibility on DSCR (debt service coverage ratios).

For instance, HUD 221(d)(4) financing requires a DSCR of only 1.20x for market-rate properties and permits DSCRs as low as 1.11x for subsidized properties. And, HUD 241(a) loans require a minimum DSCR of only 1.11x for all properties, while HUD 223(a)(7) loans permit DSCRs of 1.11x for for-profit entities and allow DSCRs as low as 1.05x for non-profits. This translates into significant savings for borrowers.

To learn more about HUD multifamily loans, simply fill out the form below and a HUD lending expert will get in touch.

In this article:
  1. FHA-insured Financing: Low Interest Rates, Long Terms
  2. HUD 223(a)(7) Refinancing and HUD 241(a) Supplemental Loans Offer Borrowers More Options
  3. Get Financing
Categories
  • HUD Multifamily Loans
  • FHA Multifamily Loans
Tags
  • HUD Multifamily Acquisition Loans
  • HUD 223(f) Loans
  • HUD Multifamily Loans
  • HUD 221(d)(4)
  • HUD 232/223(f) Loans
  • FHA Multifamily Loan Terms
  • HUD Multifamily Interest Rates
  • Low Interest Multifamily Loans
  • HUD Multifamily Financing
  • FHA Multifamily Financing

Getting commercial property financing should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →
Janover logo

HUD Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, and OpportunityZones Help.

Janover Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487

hello@hud.loans

Site Information

Privacy Policy
Terms of Use

This website is owned by a private company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We have no affiliation with any government agency and are not a lender. We are a technology company that uses software and experience to bring lenders and borrowers together. By using this website, you agree to our use of cookies, our Terms of Use and our Privacy Policy. We use cookies to provide you with a great experience and to help our website run effectively.

Freddie Mac® and Optigo® are registered trademarks of Freddie Mac. Fannie Mae® is a registered trademark of Fannie Mae. We are not affiliated with the Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Freddie Mac or Fannie Mae.

Copyright © 2022 Janover Inc. All rights reserved.