HUD Section 223(f):
2026 multifamily acquisition + refinance guide

Everything multifamily borrowers and approved MAP lenders need to know about HUD's flagship acquisition/refinance execution — 35-year fixed, 87% LTV, non-recourse, the longest term and lowest rate in commercial multifamily — current as of 2026.

What is HUD Section 223(f)?

Section 223(f) is a provision of the National Housing Act under which HUD's Federal Housing Administration insures long-term, fixed-rate mortgages for the acquisition or refinance of existing, stabilized multifamily rental and cooperative housing. The program is delivered through HUD-approved MAP (Multifamily Accelerated Processing) lenders and funded in the secondary market via Ginnie Mae mortgage-backed securities, which is how the program achieves its hallmark combination of long term and low coupon.

For sponsors comparing executions, 223(f) sits at a different point on the curve than Fannie Mae DUS or Freddie Mac OPTIGO. Agency loans close in 45–60 days at 10-year terms with balloon payments and 75–80% LTV. 223(f) closes in 6–9 months at a 35-year fully amortizing fixed term with 87% LTV market-rate (90% affordable) and 1.15x DSCR. It is the longest term and lowest rate widely available in commercial multifamily — and the trade-off is the longer close, HUD prevailing-wage requirements on substantial capex, and the MIP load.

On this page you'll find a current snapshot of every 223(f) variant — Market-Rate Acquisition, Market-Rate Refi, Affordable/LIHTC, and Broadly Affordable — the new 2026 MIP structure under FR 2025-18379, eligibility highlights, an honest comparison against the agencies, and answers to the questions multifamily borrowers ask most about 223(f).

223(f) variants at a glance (2026)

The table below summarizes the four primary 223(f) executions, including minimum loan size, maximum term, leverage caps, and minimum DSCR. The mission badge denotes executions that meet HUD affordability criteria and qualify for the higher 90% LTV / 1.111x DSCR sizing.

Variant deep-dives

223(f) Market-Rate Acquisition

The market-rate acquisition execution is for sponsors buying a stabilized 5+ unit multifamily asset with no rent or income restrictions. Minimum loan size is around $3M, with leverage to 87% LTV at 1.15x DSCR and a full 35-year fixed amortizing term. Because acquisition closings carry tighter timing pressure than refinances, sponsors typically arrange short-term bridge debt to win the deal and then refinance into 223(f) within 12–18 months once the asset clears the stabilization seasoning test.

223(f) Market-Rate Refinance

The market-rate refi execution refinances existing conventional, CMBS, agency (Fannie/Freddie), or bridge debt into a fresh 35-year fully amortizing 223(f) note. Same 87% LTV / 1.15x DSCR sizing. Cash-out is permitted subject to a 50% cap on surplus equity with amounts above defined thresholds escrowed for repairs and reserves. This is the most common 223(f) use case in 2026 — sponsors locking in 35-year term and low coupon as agency 10-year refis come due.

223(f) Affordable / LIHTC

The affordable execution covers properties with LIHTC tax-credit restrictions, project-based Section 8 HAP contracts, state HFA-financed restrictions, or other documented affordability covenants. Sizing improves to 90% LTV at 1.111x DSCR because affordability covenants reduce credit risk and qualify the deal as HUD mission-driven. Closings on LIHTC properties can stretch the timeline because of LURA review, investor consent, and HAP renewal coordination. Learn more about Section 8 HAP →

223(f) Broadly Affordable

The broadly affordable carve-out applies when ≥90% of units are restricted at or below 60% AMI. Same higher-leverage sizing as the LIHTC track — 90% LTV at 1.111x DSCR — without requiring a federally recognized tax-credit or HAP overlay, which makes it the right execution for state- or locally-restricted naturally occurring affordable housing (NOAH). The restriction must be documented in a recorded use agreement that survives the loan term.

2026 MIP rate — FR 2025-18379

Under Federal Register notice FR 2025-18379, HUD consolidated the 223(f) Mortgage Insurance Premium structure to a single 0.25% flat annual rate for all new applications received on or after October 1, 2025. The prior schedule charged different premiums by affordability tier:

• Market-rate (prior): 1.00% initial MIP / 0.60% annual MIP
• Affordable LIHTC (prior): 0.35% initial / 0.35% annual
• Broadly affordable (prior): 0.25% initial / 0.25% annual
• Green/Energy efficient (prior): 0.25% initial / 0.25% annual

Under the 2025 update, all four collapse to 0.25% annual — a meaningful improvement on market-rate executions in particular, where the prior 60bps annual MIP load consumed roughly 5–7% of debt service coverage capacity. The net effect is that market-rate 223(f) deals now size larger at the same DSCR than they did under the pre-October 2025 regime, which has materially shifted the breakeven analysis versus agency.

When 223(f) beats agency (and when it doesn't)

223(f) is not the right execution on every multifamily refi. The honest comparison versus Fannie Mae DUS and Freddie Mac OPTIGO comes down to four wins and three losses:

• 223(f) wins on term: 35-year fully amortizing fixed versus 10-year balloon at the agencies. No refi risk, no rate reset, no balloon at year 10.
• 223(f) wins on rate: GNMA-funded coupon is consistently 25–75bps inside agency pricing, especially in volatile rate windows.
• 223(f) wins on leverage for affordable: 90% LTV at 1.111x DSCR on LIHTC and broadly affordable, versus 80–87.5% LTV at 1.15–1.25x at the agencies.
• 223(f) wins on non-recourse with no recourse carve-out guaranty stress: standard bad-boy carve-outs only; no springing recourse on imputed misconduct disputes.
• 223(f) loses on close time: 6–9 months vs. 45–60 days at the agencies. If the deal needs to close before year-end, agency wins.
• 223(f) loses on capex flexibility: repairs above the 223(f) limit push the deal to 221(d)(4) substantial rehab, which triggers Davis-Bacon prevailing wage.
• 223(f) loses on MIP load: even at the new flat 0.25%, the MIP is an additional ongoing cost that agency executions do not carry.

Eligibility essentials

The core borrower and property requirements that apply across all 223(f) executions:

• Borrower: single-asset, single-purpose U.S. entity (typically Delaware LLC); experienced multifamily operator; principals subject to HUD 2530 previous participation review
• Property: 5+ residential units; stabilized for a minimum of 6 months at the time of application (typically defined as 90%+ occupancy held for 6 consecutive months)
• Use mix: 90/10 residential/commercial split — commercial space limited to 10% of net rentable area and 15% of effective gross income (limited exceptions to 25% with HUD approval)
• Recourse: non-recourse to the borrowing entity, with standard HUD bad-boy carve-outs (fraud, voluntary bankruptcy, environmental, unauthorized transfer)
• Reserves: replacement reserves funded at closing and per-unit-per-year through the loan term, sized off the PCNA (Project Capital Needs Assessment)
• Third parties: appraisal, Phase I environmental, PCNA, and architectural/cost reviews ordered per the MAP Guide; full HUB or Satellite HUD office underwriting required

Frequently asked questions