A HUD 223(f) loan is an FHA-insured, fixed-rate, non-recourse mortgage for buying or refinancing an existing apartment property. It runs up to 35 years, fully amortizing, with up to 87% loan-to-value for market-rate properties and 90% for affordable or subsidized properties. A typical 223(f) closes in about six months from engagement.
Key terms at a glance (loans under $130 million)
| Term | Market rate | Affordable | Subsidized (rental assistance) |
|---|---|---|---|
| Max loan-to-value | 87% | 90% | 90% |
| Max loan-to-value with cash-out | 80% | 80% | 80% |
| Min debt service coverage | 1.15x | 1.11x | 1.11x |
| Term and amortization | Up to 35 years, fixed, fully amortizing | Same | Same |
| Mortgage insurance premium | 0.25% at closing, then 0.25% a year | 0.25% | 0.25% |
MIP shown applies to applications submitted or amended on or after October 1, 2025 (HUD notice, Changes in Mortgage Insurance Premiums Applicable to FHA Multifamily Insurance Programs, 90 FR 45789 (Sept. 23, 2025)). Loans of $130 million and above are sized more conservatively: 75% loan-to-value and 1.30x coverage for market-rate, 80% and 1.25x for affordable, and 87% and 1.15x for properties with 90% or more rental assistance.
Who a 223(f) fits
- Owners refinancing bridge, bank or CMBS debt on a stabilized apartment property
- Buyers acquiring a stabilized property who want long fixed-rate, non-recourse debt
- Affordable, LIHTC, Section 8 and market-rate properties alike, including those with some commercial space
Main requirements
- Borrower: a single-asset, special-purpose entity
- Occupancy: properties with a certificate of occupancy at least three years old need stable occupancy of about 85% and stable operations; newer properties must hit the program coverage on actual results (one full month, or three months if applying within three years of the final certificate of occupancy)
- Commercial space: no more than 25% of net rentable area and 20% of effective gross income
- Third-party reports: appraisal, Phase I environmental report and Capital Needs Assessment
- Replacement reserves: at least $250 per unit per year, more if the Capital Needs Assessment calls for it
Costs to plan for
- FHA application fee of 0.30% of the loan amount ($3 per $1,000), paid in full with the firm application on a purchase or refinance
- Mortgage insurance premium of 0.25% at closing and 0.25% a year
- FHA inspection fee, lender fee, third-party reports, legal and title costs, and initial escrows
Timeline
| Stage | Typical time |
|---|---|
| Engagement to firm application (reports, underwriting) | 45 to 60 days |
| HUD review to firm commitment | About 60 days |
| Firm commitment to closing | 45 to 60 days |
What slows deals down: incomplete rent rolls, environmental follow-ups, open repairs, commercial-space questions, title or zoning issues, and structure changes after underwriting starts.
Prepayment and assumability
Most 223(f) loans carry a 10-year declining prepayment penalty that starts at 10% and falls 1% a year, though shorter structures can be negotiated. The loan is assumable by a buyer with HUD approval, which can be a selling point when rates are higher than your coupon.
223(f) vs 221(d)(4)
A 223(f) finances an existing, stabilized apartment property with limited repairs. A 221(d)(4) finances new construction or substantial rehabilitation and then converts to permanent debt, so HUD reviews plans, costs and a market study, and it takes about 12 months rather than about six.
223(f) vs other options
| HUD 223(f) | Fannie or Freddie | Bank or bridge | |
|---|---|---|---|
| Term | Up to 35 years, fully amortizing | Usually 5 to 12 years | Usually 2 to 5 years |
| Recourse | Non-recourse | Non-recourse | Often recourse |
| Leverage (market rate) | Up to 87% | Up to about 80% | Varies |
| Speed | About 6 months | 45 to 90 days | Fastest |
If the property is not stabilized yet, a bridge-to-HUD loan can fund the acquisition or renovation now and refinance into a 223(f) once it qualifies.
Bravo's 223(f) track record
Bravo Capital is a HUD-approved MAP lender. Since April 2022, Bravo has received 26 HUD firm commitments, and all 26 have closed. New York is its largest 223(f) market: seven loans totaling $171.0 million, most recently The Fifty in Long Island City ($22.6 million, March 2026) and The Grosvenor in Kew Gardens ($19.6 million, July 2026). Its 223(f) closings also include The Ithacan in Ithaca, NY ($57.8 million, May 2024), the Residences at Rodney Square in Wilmington, DE ($44.2 million, September 2024) and Cathedral Arms in San Diego ($49.4 million, November 2025).
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Questions borrowers ask
What is a HUD 223(f) loan?
A HUD 223(f) loan is an FHA-insured, fixed-rate, non-recourse mortgage for buying or refinancing an existing apartment property, with terms of up to 35 years, fully amortizing.
How much can I borrow with a HUD 223(f) loan?
For loans under $130 million, a HUD 223(f) loan can reach 87% of value for market-rate properties and 90% for affordable or subsidized properties, with minimum debt service coverage of 1.15x and 1.11x. Cash-out refinances are capped at 80% of value.
How long does a HUD 223(f) loan take?
A typical HUD 223(f) loan closes in about six months from engagement: roughly 45 to 60 days to the firm application, about 60 days of HUD review to firm commitment, and 45 to 60 days from commitment to closing.
What is the mortgage insurance premium on a HUD 223(f) loan?
For applications submitted or amended on or after October 1, 2025, the mortgage insurance premium on a HUD 223(f) loan is 0.25% at closing and 0.25% a year, for market-rate and affordable properties alike.
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.
