The HUD 223(f) loan is well-known by those building new low-income housing but is an often-forgotten option that can bring real value to owners of other multifamily apartment properties, including Class-A, market-rate apartment buildings.
Throughout 2022 we shared resources explaining what the HUD 223f loan is, and explored the advantages and disadvantages of choosing this financing option. Here, we have put together a recap of three top blog posts on this topic, to make it easy for you to find all the information you need, right here.
Blog Post 1: Multifamily Property Projects and the Benefits of HUD 223f
Our blog post on Multifamily Property Projects and the Benefits of HUD 223f is your go-to source for an overview of the advantages associated with this type of loan. It outlines the HUD 223(f) loan as a non-recourse, assumable loan that offers a low-interest, 35-year fixed rate that is fully amortized.
This blog post also includes a deeper dive into:
- Loan-to-value (LTV) allowances.
- The debt service coverage ratio (DSCR).
- The mortgage insurance premium (MIP) requirements.
This blog post offers a balanced argument, so it also highlights the disadvantages of choosing this type of loan, including the higher initial replacement reserves needed, the inspection requirements, and the longer transaction time.
Blog Post 2: Advantages of HUD 223f Transactions for Apartment Buildings
Our blog post on the Advantages of HUD 223f Transactions for Apartment Buildings does precisely this – it highlights many advantages of this loan type.
This blog post explores the benefits of the HUD 223(f) over other leading options, including lower interest rates, and longer terms and amortizations than Fannie Mae and Freddie Mac, among others.
Here, you’ll also learn that the HUD multifamily 223(f) loan offers the lowest long-term fixed rate of any multifamily loan program currently available.
This piece also highlights the lack of graphical restrictions and balloon payments and explains that it’s a non-recourse and fully assumable loan.
The best thing about this blog post? It comes with a colorful infographic to make understanding all the advantages of the HUD 223(f) easy, at a glance.
Blog Post 3: Why the HUD FHA Section 223f Apartment Complex Acquisition or Refinance Loan is a Great Option
Our third blog post on the topic is titled: Why the HUD FHA Section 223f Apartment Complex Acquisition or Refinance Loan is a Great Option.
This piece begins by introducing the HUD 223(f) as an option for those who are looking to acquire a new multifamily property and current owners of apartment buildings with loans that are scheduled to mature.
The blog post holds value for those looking for an in-depth analysis of this loan, as well as those looking for a high-level overview. The blog post starts by detailing the advantages in significant detail, as well as highlighting key disadvantages. Beneath the paragraphs are two sets of bullet points, giving a quick and easy summary of both the advantages and disadvantages of this loan type.
The blog post helps give weight to the items discussed by explaining that the advantages of a HUD 223(f) transaction far outweigh the disadvantages.
Is the HUD 223(f) Loan Right for Me?
If you have 4-7 months available to secure your loan and have the patience for paperwork, reports, and inspections, the HUD 223(f) loan is worth the wait.
The financial benefits far outweigh these administrative disadvantages. Keep in mind the low-interest, 35-year fixed rate and lack of balloon payments - which also reduce the risks associated with fluctuating interest rates.
Although this loan is known for its exceptional value to support subsidized housing projects, it also offers compelling benefits for market-rate apartment projects – it even excels in comparison to bank loans, Fannie Mae, and Freddie Mac loans.
LSG Lending Advisors can ensure your application process is seamless, and guide you through every step of the process. Find more information on the specifics of the HUD 223(f) loan, or schedule a free consultation to speak with an expert advisor. We’re here to help you make an informed decision, so you can choose the right loan for your unique project.