The six things HUD looks at before insuring a 223(f) loan to buy or refinance an apartment property.
Who qualifies for a HUD 223(f) loan?
HUD 223(f) is for apartment properties that are already built and operating, not ground-up construction or major rehabilitation. Eligible properties can include market-rate apartments, affordable housing, subsidized housing and certain cooperative housing. The property still needs to meet HUD's requirements for condition, occupancy, commercial space, environmental review, value, repairs and long-term viability.
For eligible properties, 223(f) provides long-term, fixed-rate, fully amortizing, non-recourse financing that is fully assumable, with a term of up to 35 years.
85%
Stable occupancy HUD looks for on established properties
35 yrs
Fixed rate, fully amortizing, non-recourse
$250
Minimum replacement reserve per unit per year
Six things HUD looks at
01
Built and operating
An existing apartment property that is already built and operating, not new construction.
02
Stable occupancy
A pattern of stable occupancy of at least 85% and stable operating results, for properties with certificates of occupancy three or more years old.
03
Enough income
Net income that covers the new loan payment by HUD's minimum debt service coverage for the property type (see below).
04
Limited commercial space
No more than 25% of net rentable area and 20% of effective gross income from commercial space.
05
Good condition
An appraisal, environmental report and capital needs assessment, with any required repairs and reserves for future capital needs.
06
The right borrower
A single-asset borrowing entity, with sponsors who pass HUD's review.
How much you can borrow
- Subsidized
- At least 90% of units with a project-based Section 8 contract for 15+ years: up to 90% loan-to-value, minimum coverage 1.11
- Affordable
- A regulatory agreement setting aside at least 40% of units at 60% of area median income, or 20% at 50%, for 15+ years: up to 90% loan-to-value, minimum coverage 1.11
- Market rate
- Everything else: up to 87% loan-to-value, minimum coverage 1.15
- Cash-out refinance
- Allowed; up to 80% loan-to-value for affordable and subsidized properties
- Loans of $130 million+
- Affordable: 80% loan-to-value, 1.25 coverage. Subsidized: 87%, 1.15
- Mortgage insurance
- 0.25% at closing and annually thereafter
If your property isn't ready yet
Recently built
A property with a certificate of occupancy less than three years old can apply once it reaches HUD's coverage for at least one full month, and must show three straight months before the loan closes. Since October 14, 2026, this also applies to qualifying build-to-rent communities.
Still leasing up or repairing
A Bridge-to-HUD loan from Bravo Property Trust can provide short-term capital while the property moves toward HUD eligibility. The bridge loan is not FHA-insured, and the HUD takeout is a separate step.
HUD 223(f) eligibility: common questions
- What occupancy history does HUD 223(f) require?
- HUD 223(f) is for stabilized properties. For properties with certificates of occupancy issued three or more years before application, the MAP Guide requires a pattern of stable occupancy of at least 85% and stable operating results. HUD underwrites to actual revenue collected less normalized operating expenses.
- Can a newly built property use HUD 223(f)?
- Yes. HUD can accept a property with a certificate of occupancy less than three years old once it achieves the required coverage for at least one full month, and it must show that coverage for three consecutive months before the loan closes.
- Can I take cash out with a 223(f) refinance?
- Yes. Bravo's FHA 223(f) program can allow cash-out proceeds in qualifying refinances, subject to underwriting and HUD requirements.
- Does commercial space affect eligibility?
- It can. HUD limits how much non-residential space and income a 223(f) property may have. Mixed-use properties may still qualify, but they need to be screened early.
Want to know if your property qualifies?
Send us the rent roll and operating statements. We'll tell you which HUD program fits and how much you could borrow.
