Commercial Real Estate Division

Commercial Real Estate - HUD FHA 223(f)

HUD FHA 223(f) Multifamily Loan Program Guidelines:

Eligible Properties:

  • 5+ residential unit properties, including, detached, semidetached, row, walk-up, or elevator-type rental or cooperative housing.

  • Properties must have 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 is available for market rate rental housing or for properties accepting rental assistance, either tenant based or project based.

  • Commercial area is permissible, but cannot exceed 20% of the net rental area, or 25% of the gross revenues.

  • Student housing properties that offer rents per room, not per unit, are ineligible.

  • 30 day minimum lease term required.

  • The property must meet a minimum three-year stabilization requirement (property must have been built and stabilized for three or more years before receiving a HUD insured mortgage). Properties with a project based affordability component (HAP Contract or other regulatory agreement) may apply for a waiver.

  • The loan may include repair costs not to exceed 15% of its value after repairs or no more than $6,500 per unit (except in high cost areas) - whichever is greatest. Repairs may not include replacing more than one major building system such as plumbing or electric.

Loan Term:

  • The lesser of 35 years or a maximum term not to exceed 75% of remaining economic useful life of the property.

Eligible Locations:

  • All 50 states, Puerto Rico, U.S. Virgin Islands, and Guam. No market - economic or population restrictions.

Loan Size:

  • $1,000,000 with no maximum.

Maximum Loan-to-Value:

  • 83.3% for market rate properties.

  • 87% for affordable properties.

Maximum CLTV:

  • 100% is possible with Joint Venture

Minimum DSCR:

  • 1.17. 1.15 for affordable properties

Minimum Occupancy:

  • Property must demonstrate a pattern of stable occupancy for 6-Months prior to application and maintained until closing.

Interest Only:

  • N/A.

Prepayment Penalty:

  • Negotiable - typically a two-year lock out followed by a step down premium (e.g. 8,7,6,5,4,3,2,1).


  • Non-recourse subject to standard carve-outs.


  • Yes, subject to lender approval.

Rate Lock:

  • At commitment.


  • Tax and Insurance Impounds: Required.

  • Replacement Reserves: Required - Monthly deposit required and amount depends on property condition.

  • Initial Deposit to Reserve Fund: Required - One time deposit may be required depending on property condition.

  • Critical and Non-Critical Repair Escrow: May be required for properties with life, safety, health or code related repair and/or maintenance concerns.

Third Party Reports:

Appraisal, Market Study, Phase I Environmental, Engineering Report and Seismic where applicable.

Sponsor Requirements:

  • Experienced owner operators preferred.

  • Minimum credit and financial capacity requirements.

  • HUD experience preferred.


 Synergy Capital Markets

9453 De Soto Avenue

Suite M

Chatsworth, California 91311


Synergy Capital Markets, is an institutional alternative real estate finance investment adviser, investor and underwriter. Synergy Capital Markets does not offer, and does not offer to provide any broker dealer or market maker services. Synergy Capital Markets operates this website at (referred to as the “Website”). By accessing this Website and any pages thereof, you agree to be bound by its Terms of Use and Privacy Policy. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. We do not provide financial planning services to individual investors. Synergy Capital Markets does not provide tax advice and does not represent in any manner that the outcomes described herein will result in any particular tax consequence. Prospective investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed on this Website, and are encouraged to consult with their own financial advisor, attorney, accountant, and any other professional that can help you / them to understand and assess the risks associated with any real estate investment opportunity. Full Disclosure

© 2018 by Synergy Capital Markets