There are phenomenal advantages of HUD 223(f) transactions, which are often overlooked by those who mistakenly assume this type of loan is only for non-profit and affordable housing projects.
If you are looking for a non-recourse, assumable loan for the purchase or refinance of a multifamily apartment project, read on to learn more about the advantages of HUD 223(f) transactions, or contact LSG Lending Advisors to get started with a free consultation tailored to you.
Advantages of HUD 223(f) Transactions Compared to Other Loans
If you haven’t looked into the advantages of HUD 223(f) loans just yet, you may be surprised to learn that they include lower interest rates, as well as longer terms and amortizations than agency lenders which include Fannie Mae and Freddie Mac.
High LTV (Loan-to-Value) and Low DSCR (Debt-Service-Coverage-Ratio)
Some of the top advantages of HUD 223(f) transactions are that they are high loan-to-value (LTV) and low debt-service-coverage ratio (DSCR) loans. The LTV varies from 85-90% depending on the type of property (whether it is market, rate, affordable, or subsidized housing) and the DSCR is always the minimum for the property type.
Low Fixed-Rate Financing
HUD 223(f) transactions offer some of the best, low fixed-rate financing options available; in fact, HUD multifamily 223(f) offers the lowest long-term fixed-rate of any multifamily loan program out there today. Securing this type of loan is a great way to protect your investment against rising interest rates.
These self-amortizing loans offer terms up to 35 years (or up to 75% of the remaining economic or useful life of the apartment building).
More Advantages of HUD 223(f)
This type of transaction offers a great solution for the long term. Here are just a few more reasons to consider a HUD 223(f) loan for your multifamily apartment project:
- There are no graphical restrictions to these loans.
- You can rest assured that there are no balloon payments. This means that with a HUD 223(f) loan you’re less likely to need to refinance as interest rates begin to rise again.
- It’s also worth noting that this type of transaction is non-recourse and fully assumable, subject to both the lender and FHA approval.
Download our infographic for an easy overview of the advantages of HUD 223(f) loans, or learn more about why HUD 223(f) is a great option for you.
Contact Us Today
Owning a multifamily apartment can be a great investment, but to ensure the best chance of financial success it’s important to work with trusted lending advisors.
LSG Lending Advisors specializes in finding the right loans and refinancing options for multifamily apartment owners, healthcare property owners, and others looking to maximize their investment potential.
Schedule a free phone consultation with our team to discuss HUD-223f as an option for you, and learn about more options you may wish to consider.