Money & Finance › Commercial real estate lending › Government-backed property loans: agency, HUD and SBA
HUD/FHA apartment loans: 221(d)(4) and 223(f)
223(f) since 1974· Asset or instrument
Fact, law or dataA rule, statute, definition or measured number.
Federally insured apartment loans with very long fixed rates: 221(d)(4) to build or rebuild, 223(f) to buy or refinance.
See it on the Money & Finance map →How it works
Approved FHA lenders make the loans and HUD insures them for an annual premium of roughly 0.25–0.65% of the balance. 221(d)(4) funds new construction or major rehab: one fixed-rate loan through construction plus 40 years, up to about 85% of cost, with federal prevailing wages required. 223(f) refinances or buys existing apartments: up to 35 years and 85% of value, more for affordable housing. Both are non-recourse, assumable and fully amortizing, with no balloon. Approval often takes 6–12 months.
Why it matters
They offer the longest fixed-rate, no-balloon debt in US real estate, removing refinance risk, but only for apartments and similar housing, and only for patient borrowers.
Facts, rules and data
HUD's MAP Guide (Multifamily Accelerated Processing), the National Housing Act sections the programs are named after, FHA program statistics, and Ginnie Mae project-loan securities.
Debates and risks
Whether slow processing and wage rules make the programs too costly to add much new housing supply is debated among developers and housing economists.
Connections (2)
▸HUD/FHA apartment loans: 221(d)(4) and 223(f) compete with Agency apartment loans: Fannie Mae DUS and Freddie Mac OptigoFact, law or data
The connection
Both finance apartments without recourse. HUD offers more: up to about 85% of value and 35–40-year fully amortizing fixed rates with no balloon. The agencies offer speed: closings in roughly 45–60 days versus 6–12 months, fewer rules, and up to 80% of value. Borrowers trade time and paperwork for leverage and term.
When and why
Among apartment owners and lenders across the US; many large lenders, such as Greystone and Walker & Dunlop, offer both and quote them side by side.
How we know
HUD's MAP Guide and the agencies' lender guides set the terms; HUD and FHFA volume data show the competition.
Debates and risks
Why HUD's share stays small despite its terms, mostly processing time, and how volume shifts with rates and agency caps, is debated.
▸HUD/FHA apartment loans: 221(d)(4) and 223(f) offer a 40-year alternative to Construction loans and mini-permsFact, law or data
The connection
A bank construction loan floats, needs a personal guarantee, runs two or three years and must be refinanced at completion. HUD 221(d)(4) covers construction and then 40 years in one fixed-rate, non-recourse loan locked at closing, removing refinance risk. The price: months of approval and federal prevailing wages, which raise building costs.
When and why
In US apartment development, especially by builders of affordable and workforce housing willing to wait for HUD approval.
How we know
HUD's MAP Guide and Section 221(d)(4) rules, the Davis–Bacon Act's wage requirements, and developers' term comparisons.
Debates and risks
How much prevailing-wage rules and slow processing offset the long fixed rate is disputed, and the answer varies by market and year.