Is The HUD 221 (d)(4) Loan Program Right for You?

The U.S. Department of Housing and Urban Development’s 221(d)4 program insures mortgage loans for the new construction or substantial rehabilitation of multifamily rental or cooperative housing. HUD’s insured mortgages may be used to finance the construction or rehab of housing consisting of at least five units. Eligible units include walk-up, elevator, coop or detached properties.

When considering possible options to fund a rehab or new construction project, potential borrowers have to weigh the potential risks and rewards of HUD’s program.

Risks include a long processing time, HUD application fees, and regulatory requirements.

Rewards include amazing terms (40 Year Fixed, Non-Recourse) High LTC, low rate and limited negative arbitrage fees.

Each transaction and deal is unique so when evaluating a potential transaction please reach out so we can advise what structure works best for your deal.