HUD Section 232/223(f):
2026 healthcare acquisition + refinance (permanent loan) guide
Everything healthcare operators, skilled-nursing owners, and approved LEAN lenders need to know about HUD's permanent acquisition/refinance loan for existing residential care facilities — the healthcare analog of multifamily 223(f), at 35-year fixed, non-recourse — current as of 2026.
What is HUD Section 232/223(f)?
Section 232/223(f) is the permanent acquisition and refinance execution for existing, stabilized residential care facilities — skilled nursing (SNF), assisted living (AL), memory care (MC), board-and-care, and intermediate care facilities (ICF). It pairs HUD's Section 232 healthcare authority with the 223(f) acquisition/refinance mechanics, producing an FHA-insured, non-recourse, fully amortizing fixed-rate mortgage funded in the secondary market via Ginnie Mae securities.
Like multifamily 223(f), this is the permanent loan in the healthcare capital stack — the take-out you refinance into once a facility is built (often under Section 232 new construction) and seasoned, or the financing you use to acquire a stabilized operating facility. Unlike multifamily, it is processed under the LEAN protocol by HUD's Office of Residential Care Facilities (ORCF) per Handbook 4232.1, and underwritten to operator-driven cash flow rather than a rent roll.
On this page you'll find a current snapshot of the 232/223(f) executions, how the healthcare permanent loan differs from its multifamily cousin, the separate Section 232 MIP treatment, eligibility and operator overlays, and answers to the questions healthcare borrowers and LEAN lenders ask most.
232/223(f) executions at a glance (2026)
The table below summarizes the primary 232/223(f) permanent-loan executions, including minimum loan size, maximum term, leverage caps, and minimum DSCR. All are processed under LEAN by ORCF per Handbook 4232.1.
| Program | Purpose | Min loan | Max term | Max LTV | Min DSCR |
|---|---|---|---|---|---|
232/223(f) Refinance Refi existing healthcare | Refinance non-HUD healthcare debt on a stabilized SNF/AL/MC | $3M | 35 yrs | 85% | 1.45x |
232/223(f) Acquisition Acquisition | Purchase of an existing, stabilized licensed care facility | $3M | 35 yrs | 80% | 1.45x |
232/223(f) + AR Financing Working-capital pair | Permanent first mortgage paired with a Medicare/Medicaid AR revolver | $3M | 35 yrs | 85% | 1.45x |
232/223(f) vs. multifamily 223(f)
The two executions share a name and a purpose — long-term permanent acquisition/refinance — but sit in different HUD lanes with materially different underwriting:
- Lane: 232/223(f) is processed under LEAN by ORCF (Handbook 4232.1); multifamily 223(f) is processed under MAP by the Office of Multifamily Housing (the MAP Guide).
- Cash flow: healthcare is underwritten on operator-driven EBITDAR with reimbursement risk; multifamily is underwritten on a rent roll.
- Coverage: 1.45x minimum DSCR on healthcare versus 1.15x on multifamily — a far thicker cushion for reimbursement volatility.
- Leverage: roughly 80% acquisition / 85% refinance on healthcare, versus 87% market-rate (90% affordable) on multifamily.
- Overlays: operator experience, portfolio depth, a secondary operator, Medicare/Medicaid concentration limits, working capital, and Mortgage Reserve Fund — none of which exist on multifamily 223(f).
- MIP: Section 232 carries its own healthcare MIP schedule; it is not the flat 0.25% multifamily rate adopted under FR 2025-18379.
Eligibility & operator essentials
The core requirements that apply across 232/223(f) permanent executions:
- Facility type: a licensed care component is required — SNF, AL, MC, board-and-care, or ICF. Independent-living-only properties are not eligible (those go to multifamily 223(f) or 221(d)(4)).
- Stabilization: the facility must be existing and operating with a documented, stabilized census and operating history at application.
- Operator: typically 5+ years of experience in the relevant product type and portfolio depth of at least 3 similar operating facilities; a secondary (backup) operator identified at closing.
- Borrower: single-asset, single-purpose entity; principals subject to HUD previous-participation review; master-lease/operating-lease structure between the borrower and the operator.
- Reserves: replacement reserves sized off the PCNA, plus a Mortgage Reserve Fund and working-capital requirements scaled to reimbursement concentration.
- Recourse: non-recourse to the borrowing entity with standard HUD bad-boy carve-outs.
Frequently asked questions
What is HUD Section 232/223(f)?
Section 232/223(f) is the permanent acquisition and refinance execution for existing, stabilized residential care facilities — skilled nursing (SNF), assisted living (AL), memory care (MC), board-and-care, and intermediate care facilities (ICF). It blends the Section 232 healthcare authority with the 223(f) acquisition/refinance mechanics: HUD's Federal Housing Administration insures a long-term, non-recourse, fully amortizing fixed-rate mortgage, processed under the LEAN protocol by the Office of Residential Care Facilities (ORCF) per Handbook 4232.1. In plain terms, it is the healthcare analog of multifamily 223(f) — the permanent loan you refinance into once a care facility is built and stabilized.
How is 232/223(f) different from plain 223(f)?
Section 223(f) is multifamily — it finances rental apartments underwritten on a rent roll, processed under MAP by the Office of Multifamily Housing. Section 232/223(f) finances licensed residential care facilities underwritten on operator-driven cash flow, processed under LEAN by ORCF. The healthcare version is more conservative: minimum DSCR is 1.45x (versus 1.15x on multifamily 223(f)), leverage is lower (up to roughly 80% on acquisition / 85% on refinance), and ORCF applies operator overlays — operator experience, portfolio depth, a secondary operator, Medicare/Medicaid concentration limits, working capital, and Mortgage Reserve Fund requirements — that have no equivalent in multifamily.
What are the maximum LTV and minimum DSCR on a 232/223(f) loan?
Refinance executions generally support up to 85% LTV and acquisitions up to roughly 80% LTV, both at a minimum 1.45x debt service coverage. The loan amount is constrained by the lesser of LTV, the 1.45x DSCR test, and statutory per-bed mortgage limits. Because healthcare cash flow is operator-dependent and exposed to reimbursement-rate risk, ORCF and LEAN lenders frequently stress-test coverage under a reduced-reimbursement scenario and may require additional Mortgage Reserve Fund deposits when Medicaid concentration is elevated.
What is the MIP rate on a 232/223(f) loan in 2026?
Healthcare loans under Section 232 — including 232/223(f) — are governed by a separate MIP schedule and are NOT covered by the flat 0.25% annual multifamily MIP adopted under Federal Register notice FR 2025-18379 (which applies to 223(f), 221(d)(4), 220, 223(a)(7), and 241(a)). Section 232 carries its own upfront and annual MIP set by the ORCF schedule. Confirm the current healthcare MIP with your LEAN lender at application, because the healthcare and multifamily premium tables move independently.
How long does a 232/223(f) loan take to close?
Plan on roughly 4–6 months from a complete LEAN application to close — the same linear ORCF timeline as other Section 232 executions, and faster than multifamily 223(f) (6–9 months) because LEAN is a more standardized lane. The package still requires an appraisal, Phase I environmental, a Project Capital Needs Assessment (PCNA), and ORCF's healthcare-specific operator and license review. The single biggest timeline driver is the completeness and quality of operator financials, license/survey history, and the secondary-operator arrangement.
Can I refinance a 232/223(f) loan later with 232/223(a)(7)?
Yes. Once a 232/223(f) loan seasons, the standard rate-reduction path is Section 232/223(a)(7) — a streamlined HUD-to-HUD refinance that lowers the coupon or extends amortization on an existing FHA-insured healthcare loan without full re-underwriting. It is the fastest and cheapest way to improve terms on an in-place 232 note, and it preserves the project's existing HUD insurance and operator structure.
Can a 232/223(f) be paired with AR financing?
Yes. A Section 232 AR (Accounts Receivable) revolving facility — secured by the facility's Medicare and Medicaid receivables — commonly runs alongside the 232/223(f) first mortgage to provide working capital that bridges the 60–90+ day reimbursement lag. AR facilities are typically $1M minimum with terms up to 5 years and require an intercreditor agreement with the first-mortgage lender. Advance rates against eligible receivables and pricing are negotiated case by case.
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