What is Substantial Renovation?

Substantial Renovation and the HUD 223(f) Loan Program

When it comes to HUD multifamily loans, such as the HUD 223(f) loan, substantial renovation of a property occurs when either:

  • The required repairs and improvements of a HUD-assisted multifamily rental housing involve replacing two or more major building components, OR

  • Rehabilitation costs exceed the greater of:

    • 15% of the property's replacement cost (fair market value - exclusive of soft costs) after completion of all required repairs, replacements, and improvements OR

    • $6,500 per dwelling unit (adjusted by HUD's authorized high cost percentage) OR

    • 20% of the mortgage proceeds applied to rehabilitation expenses


TO LEARN MORE ABOUT HUD 223F LOANS, FILL OUT THE FORM BELOW AND A HUD LENDING EXPERT WILL GET IN TOUCH.