No, HUD’s 223(a)(7) refinance loan is used exclusively to refinance existing HUD-insured loans on multifamily and healthcare properties. It is reserved for those with existing loans like the 223(f), 221(d)(4), HUD 232 and other FHA-insured multifamily and healthcare loans. Unlike most other HUD multifamily loan programs, the HUD 223(a)(7) loan requires very little underwriting, only one third-party report (a PCNA, or project capital needs assessment), and can close in as little as 60 days.
Program Eligibility for the HUD 223a7 Loan Program
No, HUD’s 223(a)(7) refinance loan is used exclusively to refinance existing HUD-insured loans on multifamily and healthcare properties. It is reserved for those with existing loans like the 223(f), 221(d)(4), HUD 232 and other FHA-insured multifamily and healthcare loans. Unlike most other HUD multifamily loan programs, the HUD 223(a)(7) loan requires very little underwriting, only one third-party report (a PCNA, or project capital needs assessment), and can close in as little as 60 days.
To learn more about the HUD 223a7 refinance program, get a financing quote to speak to a HUD/FHA loan expert.
Related Questions
What are the requirements for a HUD 223(a)(7) loan?
HUD 223(a)(7) loans have terms including:
- Loan Size: Loans are allowed up to 100% of the eligible transaction costs, including:
- Existing debt principal
- Eligible repairs
- Initial replacement reserves
- Prepayment penalties
- Third-party reports (the only one required is a project capital needs assessment, or PNCA)
- Loan Term: May be increased up to 12 years, as long as the new loan doesn't have a term greater than 40 years (for HUD 221(d)(4) loans and HUD 232 loans) or 35 years (for HUD 223(f) and HUD 232/223(f) loans)
- DSCR:
- Non-profit entities: 1.05x minimum DSCR
- For-profit entities: 1.11x minimum DSCR
Eligible Properties for HUD 223(a)(7) Loans: Multifamily and healthcare properties with existing HUD-insured debt are eligible for the HUD 223(a)(7) refinance loan program.
To learn more about the HUD 223a7 refinance program, get a financing quote to speak to a HUD/FHA loan expert.
- Loan Size: Loans are allowed up to 100% of the eligible transaction costs, including:
What types of mortgages can be refinanced with a HUD 223(a)(7) loan?
HUD 223(a)(7) refinance loans are used exclusively to refinance existing HUD-insured loans on multifamily and healthcare properties, such as the 223(f), 221(d)(4), HUD 232, and other FHA-insured multifamily and healthcare loans. Source
For investors and developers who already have a HUD multifamily loan, a HUD 223(a)(7) loan is often the best way to refinance it. Source
What are the benefits of refinancing with a HUD 223(a)(7) loan?
The HUD 223(a)(7) refinance loan program can reduce interest rates, increase amortization, and improve cash flow while reducing the cost of debt service. It can even absorb prepayment penalty costs. On top of all that, it is one of the fastest, easiest, and most affordable multifamily or healthcare loan that you can get. Plus, HUD 223(a)(7) loans require very little underwriting, and can close in as little as 60-days.
The benefits of refinancing with a HUD 223(a)(7) loan include:
What are the risks associated with refinancing with a HUD 223(a)(7) loan?
The risks associated with refinancing with a HUD 223(a)(7) loan include cash outs being restricted, the refinanced amount not being able to exceed the amount of the original mortgage, and certain products being excluded, such as Risk Share mortgages, Co-insured mortgages, Section 202 loans, and certain other HUD-held mortgages. To learn more about the HUD 223a7 refinance program, get a financing quote to speak to a HUD/FHA loan expert.
How long does it take to get approved for a HUD 223(a)(7) loan?
The HUD 223(a)(7) refinance program typically closes about 60 days after the application is submitted. This source provides more information about the closing timelines for HUD 223(a)(7) loans. Additionally, this source provides more information about the FHA and HUD 223(a)(7) refinance program.
What documents are required to apply for a HUD 223(a)(7) loan?
The HUD 223(a)(7) loan process is faster and has fewer obstacles than other FHA/HUD products. The streamlined, affordable process does not require new third-party reports like appraisals, market studies, or environmental reports. In fact, most 223(a)(7) refinances only require a project capital needs assessment (PCNA).
To apply for a HUD 223(a)(7) loan, you will need to provide the following documents:
- A project capital needs assessment (PCNA)
- Proof of ownership
- Proof of insurance
- Proof of occupancy
- Proof of income
- Proof of debt service coverage
- Proof of tenant income
- Proof of tenant rent rolls
- Proof of tenant leases
- Proof of tenant security deposits
- Proof of tenant rent collections
- Proof of tenant rent arrears
For more information about the HUD 223(a)(7) loan program, please visit this page.
If you have any questions or would like to speak to a HUD/FHA loan expert, please fill out the form.