Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects

To provide mortgage insurance to HUD-approved lenders for the purchase or refinancing of existing multifamily housing projects, whether conventionally financed or subject to federally insured mortgages at the time of application for mortgage insuranc

Section 223(f) allows FHA to insure lenders against loss on mortgage defaults. The program allows for long-term mortgages (up to 35 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage-Backed Securities. FHA insurance improves the availability of loan funds and permits more favorable interest rates and term/maturity.

Both for profit and non-profit borrowers are eligible to apply.

All persons are eligible to occupy such projects subject to normal occupancy restrictions.

Section 223(f) insures lenders against loss on mortgage loans. These loans may be used to purchase or refinance existing multifamily housing projects. The property must contain at least 5 residential units with complete kitchens and baths and have been completed or substantially rehabilitated for at least 3 years prior to the date of the application for mortgage insurance. The program allows for non-critical repairs that must be completed within 12 months of loan closing. Projects requiring substantial rehabilitation are not acceptable under this section and may not involve the replacement of more than one major system. The remaining economic life of the project must be long enough to permit a ten-year mortgage. The mortgage term cannot exceed 35 years or 75 percent of the estimated life of the physical improvements, whichever is less. Davis Bacon prevailing wage requirements do not apply to this program. Mortgage sizing depends on certain characteristics of the project including affordability restrictions and will be based on loan-to-value and debt service coverage ratios that can be found in the multifamily web site's MAP Guide or HUDclips.

See MAP Guide

Applications may be submitted any time through approved MAP lenders.

Pre-applications are not required for MAP processing.

If the project meets program requirements, the local HUD Multifamily Hub or Satellite Office issues the commitment to the lender to insure the project.

See MAP Guide

Processing time goals are to process 223(f) applications in 60 days excluding days that the lender is responding to questions posed by HUD.

The term of a commitment to insure may be extended under certain circumstances when more time is required to close the loan.

If an application for mortgage insurance is denied, HUD will state the reasons for denial and appeals may be made in accordance with guidelines published in the MAP Guide.