Refinance and Refi Cash-Out of Multifamily & Mixed-Use Properties
2.75% Fixed Interest Rate for 35 years
FHA-HUD 223(f) Loan
With interest rates at historic lows, securing a low rate immediately increased property cash flow and maximizes property appreciation as interest rates increase over time.
Nationwide
$3 Million to $250 Million+ per property
Eligible properties: Apartments, multifamily, cooperatives, affordable, subidized & student housing; Commercial mixed-use space limited to 25% of rentable area and 20% of gross income.
Term: 35 years
Fully amortizing
Loans up to $75 Million:
| Property Type | Maximum Loan to Value |
Minimum Debt Service Coverage |
Acquisition Loan to Cost |
Max Cash-Out LTV ³ |
| Subsidized ¹ | 90% | 1.11 | 90% | 80% |
| Affordable ² | 87% | 1.15 | 87% | 80% |
| Market Rate | 85% | 1.18 | 85% | 80% |
Loans $75 million+ (HUD may impose limits over $100 Million):
| Property Type | Maximum Loan to Value |
Minimum Debt Service Coverage | Acquisition Loan to Cost |
Max Cash-Out LTV ³ |
| Subsidized ¹ and Affordable ² | 80% | 1.25 | 80% | 70% |
| Market Rate | 75% | 1.30 | 75% | 70% |
¹ 90%+ of units covered by project-based Section 8 contract.
² Regulatory Agreement with a minimum set-aside (e.g., 40% of units at 60% AMI, or 20% of units at 50% AMI) in effect for at least 15 years after the new loan closes.
³ Refinances may include 100% of eligible costs (satisfaction of existing initial deposit to capital needs reserve, due diligence and closing costs) plus additional funds up to cash-out LTV.
Loan cannot exceed per-unit maximum as adjusted by HUD for project location.
Repair and Rehab Limitations: Up to $15,000 per unit times a local cost factor (typically 190%-270%); repairs may not replace 50%+ of any two building systems: electrical, plumbing, mechanical, building envelope, structural.
No balloon payments will ever come due
No prepayment after 10 years
Non-recourse
Assumable with HUD approval without a rate increase so you can pass your property to heirs or sell it with long-term financing already in place.
Borrower must be a single purpose entity either for profit or nonprofit.
Escrows
a) Taxes, insurance and mortgage insurance premium escrowed monthly;
b) Capital needs reserve maintained monthly with HUD guidelines on a property-specific basis (minimum $250/unit/year).
Mortgage Insurance Premium: 1% due HUD at closing and 0.6% annually thereafter (0.25%-0.35% for affordable and subsidized properties, 0.25% for properties with Green certification.
HUD Application Fee: 0.30% of estimated loan amount due with submission of application. HUD Application Fees reduced for properties in Opportunity Zones.
Third Party Reports: Appraisal, Environmental and Capital Needs Assessment
Timing: Typical application submitted within 45-60 days of engagement, followed by 60-90 days to issuance of HUD’s commitment and 30-45 days to closing.
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