Multifamily
Purchase or Refinance
Section 223(f)
35-year term
Value for affordable and Section 8 projects is determined without using restricted rent
Minimum DSC ratio
1.15 for market rate projects
1.11 for affordable projects
1.11 for Section 8 projects
Maximum LTV ratio
80% with cash out proceeds
87% for market rate projects
90% for affordable projects
90% for Section 8 projects
Multifamily
New Construction or Substantial Rehabilitation
Section 221(d)(4)
One fixed interest rate
for entire construction period and 40-year term
Minimum DSC ratio
1.15 for market rate projects
1.11 for middle-income projects
1.11 for affordable projects
1.11 for Section 8 projects
Maximum LTC ratio
87% for market rate projects
90% for middle-income projects
90% for affordable projects
90% for Section 8 projects
Builder and Sponsor's Profit and Risk Allowance (BSPRA) allows for even higher proceeds.
Multifamily
Streamlined Refinance of Existing HUD-insured Mortgages
Section 223(a)(7)
Lock in lower interest rates
Low cost
Fast process
Existing prepayment penalty can be covered by principal increase and new interest rate
Potential term extension up to 12 years
No cash-out proceeds
1.11 DSC ratio for market rate
1.05 for Section 8
To qualify as affordable in this context,
a project must meet the following requirements:
Rent and income restrictions must be imposed, monitored, and enforced by a governmental agency for at least 15 years after Final Endorsement,
There must be a recorded Regulatory Agreement (LURA) requiring the project to meet at least the minimum LIHTC restrictions of 20% of units at 50% of area median income (AMI), or 40% of units at 60% of AMI, with economic rents (i.e. the portion paid by the residents) on those units no greater than LIHTC rents, and
The achievable tax-credit rents must be at least 10% below market rents.
To qualify as Section 8 in this context, a project must have a project-based Section 8 contract for 90% or more of the total units in place for 15 years after Final Endorsement.
To qualify as middle-income in this context, 50% or more of units must be targeted for tenant income levels up to 120% AMI. All targeted units must be secured by a use restriction and must be monitored by a state or local government entity annually. A minimum use restriction period of 10 years is required to ensure that middle income tenants benefit from this policy. This can be waived to no less than five years.
Business services and products do not originate from and are not expressly endorsed by HUD, FHA, the government of the United States, or any federal, state or local government agency. Harper Capital Partners, LLC, is not acting on behalf of or at the direction of HUD, FHA, or the federal government.
HUD Multifamily Loan FAQ
Updated September 2026
Need short-term debt before the HUD loan? See Bridge-to-HUD financing. Weighing your options? See HUD 223(f) vs. agency vs. bank loans. Already have a HUD loan? See the 223(a)(7) streamlined refinance and 241(a) supplemental loans, and what the 0.25% MIP means for your loan.
What DSCR and LTV does HUD require on a 223(f) refinance or acquisition?
For market-rate properties, HUD sizes 223(f) loans at a minimum 1.15 DSCR and a maximum 87% LTV. If the refinance takes cash out, the maximum LTV is 80%. These limits come from HUD Mortgagee Letter 2025-03, which replaced the older 1.176 DSCR / 85% LTV standard that many websites still show.
What are the sizing limits on a 221(d)(4) new construction loan?
For market-rate projects, 221(d)(4) loans are sized at a minimum 1.15 DSCR and a maximum 87% loan-to-cost, per ML 2025-03. Affordable and Section 8 projects qualify for higher leverage.
What is the HUD mortgage insurance premium (MIP) now?
0.25% annually, across all multifamily program categories, for both the annual and the upfront premium. HUD set this rate in a Federal Register notice published September 23, 2025. Many sources still list older rates as high as 0.60%.
How long are HUD multifamily loan terms?
Section 223(f) loans run up to 35 years, fully amortizing. Section 221(d)(4) loans carry one fixed rate through construction plus a 40-year permanent term. Both are non-recourse, fixed-rate and assumable.
Is a 241(a) supplemental loan subject to Davis-Bacon?
It depends on the underlying loan. A 241(a) supplemental on a 223(f) or 223(a)(7) loan is exempt from Davis-Bacon prevailing wage requirements. A 241(a) on a 221(d)(4) loan is subject to them.
Can a HUD 223(f) loan be used to buy a property?
Yes. Section 223(f) insures loans for both the purchase and the refinance of existing rental housing, whether the property was originally financed conventionally, with equity, or with a HUD-insured loan. The property must have at least 5 residential units.
What occupancy does a 223(f) loan require?
Properties with a certificate of occupancy at least 3 years old must show a pattern of stable occupancy of at least 85% and stable operating results. Newer properties can apply once they have achieved the required DSCR for at least one full month, subject to additional lease-up and debt service reserve conditions.
Can a property that needs major renovation use a 223(f)?
No. Properties that need substantial rehabilitation are not eligible for 223(f); those projects are financed under Section 221(d)(4). A 223(f) can fund lighter repairs, with critical life-safety items completed before closing and non-critical repairs deferred until after.
What is a 223(a)(7) refinance?
A streamlined refinance of an existing HUD-insured mortgage, used to lower the interest rate. It requires no cash out, costs little, moves quickly, and can extend the term by up to 12 years.
Does Harper Capital lend nationwide?
Yes. Harper Capital Partners is a HUD MAP-approved lender and arranges HUD-insured multifamily and healthcare financing throughout the United States.