For most multifamily borrowers, three programs are relevant. Understanding which one fits your situation is the first practical decision you will make.
| 221(d)(4) | 223(f) | 223(a)(7) | |
| Purpose | New construction & substantial rehab | Acquisition & refinance | Streamlined refinance of existing HUD-insured loan |
| Max Loan Term | 40 yrs + up to 3-yr construction period | 35 years | Remaining term of original loan |
| LTV/LTC (Market Rate) | 87% LTC | 83% LTV | N/A (refinance only) |
| LTV/LTC (Affordable) | 90% LTC | 87% LTV | N/A |
| LTV / LTC (Rental Assist.) | 90% LTC | 90% LTV | N/A |
| Min. DSCR | 1.20x market; 1.15x affordable; 1.11x rental assist. | 1.18x market; 1.15x affordable; 1.11x rental assist. | Must show benefit to project |
| MIP (eff. Oct 2025) | 0.25% annually | 0.25% annually | 0.25% annually |
| Recourse | Non-recourse | Non-recourse | Non-recourse |
| Assumable | Yes, with HUD approval | Yes, with HUD approval | Yes, with HUD approval |
| Min. Units | 5 units | 5 units | Existing HUD-insured property |
| Typical Close Time | 12-18+ months | 9-12 months | 3-6 months |
Note: All parameters reflect mid-2026 program terms and are subject to change. Interest rates are not shown because they reflect current market conditions and are updated daily. Verify current rates and terms with a MAP-approved lender.
221(D)(4): New Construction and Substantial Rehabilitation
The 221(d)(4) program is for developers building new multifamily properties or undertaking substantial rehabilitation of existing ones. It is one of the highest-leverage, longest-term construction loans available for multifamily in the United States.
The loan covers the construction period at a fixed rate and then converts to permanent financing for up to 40 years, all under a single closing. This eliminates the traditional construction-to-permanent refinancing risk that can derail a project when market conditions shift. The practical minimum loan size is approximately $5 million, as the cost of HUD’s due diligence process is difficult to justify on smaller transactions.
Borrowers pursuing 221(d)(4) financing must have full site control, permits, and construction plans in place before application. Demonstrated multifamily development or ownership experience is expected. This is not a program for first-time developers.
223(F): Acquisition and Refinance
The 223(f) program is the most widely used HUD multifamily product. It provides fixed-rate, non-recourse, 35-year fully amortizing financing for the acquisition or refinance of stabilized multifamily properties with five or more units.
To qualify, a property must be at least three years old (or have had its most recent substantial renovation at least three years prior) and must demonstrate at least 90% occupancy for a minimum of six months prior to application. Both for-profit and non-profit borrowers are eligible. Mixed-use is permitted, with commercial space capped at 25% of net rentable area and 15% of underwritten effective gross income.
223(A)(7): Streamlined Refinance
If you already have a HUD-insured loan, the 223(a)(7) program allows you to refinance it on a streamlined basis. The program is designed to lower the borrower’s monthly payment by reducing the interest rate. It closes considerably faster than a new 223(f) application, typically in three to six months, and requires significantly less documentation.
The 223(a)(7) does not allow meaningful cash-out and is only available to properties with an existing HUD-insured loan. For borrowers with legacy HUD debt at higher rates, this is among the most efficient paths to a lower cost of capital.
How to pick which program is best for you?
Choosing the right HUD program ultimately comes down to the current lifecycle of your asset and your immediate cash flow goals. If you are looking to break ground on a new development or execute a top-to-bottom historic renovation, the heavy-lifting Section 221(d)(4) program secures your construction and permanent financing in a single, 40-year fixed-rate package.
If you are instead looking to acquire or refinance a stabilized property, Section 223(f) delivers 35-year leverage without the headaches of construction underwriting. Finally, if you already hold an active HUD-insured loan and simply want to capitalize on a drop in interest rates or fund minor capital repairs, the streamlined Section 223(a)(7) program lets you refinance quickly with minimal paperwork. By aligning your property’s physical needs with the unique strengths of these three core frameworks, you can lock in a stable capital structure for a multi-decade hold.
DISCLAIMER: The information provided in this article, including, without limitation, any opinions, predictions, forecasts, commentaries or suggestions, is for informational purposes only and should not be construed to be professional or personal investment, financial, legal, tax or other advice. Loan programs, eligibility requirements, underwriting standards, leverage, debt-service coverage requirements, mortgage insurance premiums, interest rates, costs and processing timelines are subject to change and may vary based on the applicable HUD program, property, borrower and transaction. All financing is subject to underwriting, credit approval, HUD approval, satisfactory documentation and other applicable conditions. Examples and estimates are illustrative only, and no particular result, timing, loan amount, interest rate or execution is guaranteed.