How the interest rate on a HUD multifamily or healthcare loan is set, when it is locked, and what the mortgage insurance premium adds.
How is the rate on a HUD loan set?
A HUD loan has a fixed interest rate for its full term: up to 35 years on a HUD 223(f) loan and 40 years after construction on a 221(d)(4) loan, fully amortizing with no balloon payment. The rate is set by the bond market when it is locked, and the mortgage insurance premium (MIP) is paid on top of it.
HUD-insured loans are typically funded through Ginnie Mae mortgage-backed securities, so HUD rates move with U.S. Treasury yields and investor demand for those securities. That is why rates change daily and why Bravo quotes a rate for each transaction rather than publishing one number.
Fixed
For the full term, with no floating-rate reset
35–40 yrs
Fully amortizing, no balloon payment
0.25%
Annual MIP on HUD apartment loans, paid on top of the rate
Three parts of what you pay
01
The market benchmark
HUD rates follow U.S. Treasury yields. When Treasury yields move, HUD rates move with them.
02
The spread
What investors in the Ginnie Mae securities that fund HUD loans require on top of Treasuries.
03
Mortgage insurance
HUD's annual premium, shown separately from the interest rate in most quotes.
Rate and premium by program
- HUD 223(f) · buy or refinance apartments
- Fixed rate, up to 35 years. MIP 0.25% at closing and annually
- HUD 221(d)(4) · build or substantially rehab
- Fixed rate, 40 years after construction. MIP 0.25%
- HUD 223(a)(7) · refinance an existing HUD loan
- Fixed rate, to lower the rate on existing HUD debt. MIP 0.25%
- HUD 232/223(f) · healthcare buy or refinance
- Fixed rate, up to 35 years. MIP 1% at closing, then 0.65% a year
- HUD 232 · healthcare construction
- Fixed rate, up to 40 years plus construction. MIP 0.77%
- Today's rate
- Quoted per transaction; rates change daily
When the rate is locked
Late in the process
The rate on a HUD loan is set when it is locked, and our team walks you through the timing on your transaction. Until the rate is locked, any rate you see is an estimate.
Need certainty sooner?
Owners who need to close before a HUD loan is ready can use a Bridge-to-HUD loan from Bravo Property Trust, then refinance into a fixed-rate HUD loan when the property qualifies.
HUD rates: common questions
- Are HUD loan rates fixed or floating?
- Fixed. Bravo's HUD 223(f), 221(d)(4), 223(a)(7) and Section 232 loans are fixed rate and fully amortizing, so there is no floating-rate reset and no balloon payment.
- Is the mortgage insurance premium part of the interest rate?
- No. MIP is paid on top of the rate: 0.25% a year on Bravo's HUD apartment loans, and 1% at closing then 0.65% a year on HUD 232/223(f) healthcare loans.
- Why doesn't Bravo publish today's HUD rate?
- HUD rates change daily with the bond market, and the rate for a loan is set when it is locked. Bravo quotes a rate for each transaction.
- Can I lower the rate on my existing HUD loan?
- Often, yes. A HUD 223(a)(7) streamlined refinance is for a property that already has an FHA-insured mortgage and can reset it at a lower fixed rate.
Want today's rate for your property?
Tell us about the property and the loan you need. We'll quote a rate and walk you through the full cost.
