How should I compare HUD 223(f) lender proposals beyond the interest rate?
Compare HUD 223(f) proposals on the loan amount each lender can actually support, the total cost to close, the prepayment terms and the lender's record of turning firm commitments into closings, as well as the rate. HUD sets much of the loan (the term of up to 35 years, the leverage and coverage limits, the 0.30% application fee and the mortgage insurance premium), so the real differences between lenders sit in sizing, lender fees, third-party costs, reserves, prepayment, timing and execution.
What HUD sets and what the lender sets
| Item | Set by | What to compare |
|---|---|---|
| Term | HUD | Up to 35 years, fixed, fully amortizing with every lender |
| Max leverage and coverage | HUD | 87% LTV and 1.15x market rate; 90% and 1.11x affordable. Check whether each lender's sizing reaches these limits on your numbers |
| Mortgage insurance premium | HUD | 0.25% at closing and 0.25% a year (applications on or after October 1, 2025) |
| HUD application fee | HUD | 0.30% |
| Interest rate | Market, at rate lock | Spread quoted, when the rate is locked, and how long the quote holds |
| Lender fee | Lender | Fee as a percentage and in dollars |
| Third-party reports, legal, title | Lender and vendors | Estimated dollar amounts and who orders them |
| Replacement reserves | HUD minimum, set by the Capital Needs Assessment | At least $250 per unit per year; compare the initial deposit and annual amount |
| Prepayment | Lender, negotiable | Schedule against your hold period |
| Closing record | Lender | Firm commitments received and closed, by name |
What to check or ask a lender
- What loan amount do you size today, and which test limits it: value, coverage or cost?
- Is your sizing based on actual collected income and normalized expenses, as HUD will underwrite it?
- What is the all-in cost to close, in dollars, including your fee, reports, legal, title and initial escrows?
- What prepayment schedule do you offer, and can it be customized?
- When do you lock the rate, and what happens to the quote if the market moves before then?
- How many HUD firm commitments have you received, and did each one close?
- Who services the loan after closing?
Bravo Capital's record
Since April 2022, Bravo Capital has received 26 HUD firm commitments, and all 26 have closed, for $526.0 million in closed loans: 19 of 19 HUD 223(f) apartment loans ($379.6 million) and 7 of 7 Section 232/223(f) healthcare loans ($146.4 million). The largest 223(f) loans include The Ithacan in Ithaca, NY ($57.8 million) and Cathedral Arms in San Diego ($49.4 million).
Program guide: HUD 223(f) loans. Related: How HUD loan rates work, HUD vs Fannie Mae, Freddie Mac and bank loans, How to choose a HUD lender.
Questions borrowers ask
Does HUD set the interest rate on a 223(f) loan?
No. HUD sets the mortgage insurance premium and the program rules. The interest rate is set when the loan is locked and moves with U.S. Treasury yields and demand for the Ginnie Mae securities that fund HUD loans.
Which HUD 223(f) costs are the same with every lender?
HUD's 0.30% application fee and the mortgage insurance premium of 0.25% at closing and 0.25% a year (applications on or after October 1, 2025) are set by HUD. Lender fees, legal costs and third-party report pricing vary.
Why does a lender's closing record matter when comparing proposals?
A firm commitment that does not close costs the borrower time, deposits and sometimes the deal. Ask each lender for every HUD firm commitment it has received and whether each closed.
Can HUD 223(f) prepayment terms be negotiated?
Often, yes. Bravo's standard 223(f) prepayment is 10% in year one, declining 1% a year, and it can be customized. Compare each lender's schedule against your hold period.
About the author
Aaron Krawitz is the founder and CEO of Bravo Capital, a HUD-approved MAP and LEAN lender in New York City. He founded Bravo in 2021 after serving as president of Dwight Capital. Bravo and its affiliate, Bravo Property Trust, have closed more than $2.5 billion in financing, and Bravo closed every HUD firm commitment it received in 2025.
