Multifamily Accelerated Processing (MAP) and the HUD 223(f) Loan Program
If you want to get a HUD 223(f) loan , there are two ways in which you may be able to apply: through MAP, or Multifamily Accelerated Processing, or TAP, or Traditional Application Processing.Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank at 6.1%$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1.4M offered by a Credit Union at 6.1%Click Here to Get Quotes!
HUD 223(f) Borrowers and the MAP Program
If you want to get a HUD 223(f) loan, there are two ways in which you may be able to apply: either through MAP (Multifamily Accelerated Processing) or TAP (Traditional Application Processing).l Borrowers can only apply via the MAP process if their lender is MAP-approved. The MAP process is typically faster and more streamlined than the TAP process, which can help both borrowers and lenders save valuable time and money.
TAP Versus MAP
As the name suggests, TAP (Traditional Application Processing) is the traditional way for processing HUD/FHA applications. In contrast to TAP, the MAP process is a fast-track. MAP allows qualified lenders to prepare the FHA forms and perform preliminary underwriting for certain loan applications.
General MAP Lender Qualifications
Qualified MAP lenders must have experience underwriting multifamily housing loans and applying for FHA multifamily mortgages insurance. The lender’s principal staff must undergo review to ensure they can perform the necessary tasks. HUD’s LQMD (Lender Qualification and Monitoring Division) makes the final decision.
Once a lender is qualified, they may operate on a nationwide basis. Regardless of a project’s location or the HUD Multifamily Hub or Program Center that will process the loan, qualified MAP lenders can serve clients across the country. However, lenders who fail to maintain HUD standards could lose their qualification.
TO LEARN MORE ABOUT FHA 223F LOANS, FILL OUT THE FORM BELOW AND A HUD LENDING EXPERT WILL GET IN TOUCH.
What is the difference between MAP and the HUD 223(f) loan program?
The HUD 223(f) loan program is a loan program specifically designed for the purchase or refinance of market rate properties of any class (cooperatives, affordable housing, or subsidized multifamily properties). The Multifamily Accelerated Processing (MAP) program is a HUD loan processing system that streamlines the loan process for multifamily mortgages. MAP is used for the processing of HUD 221(d)(4) loans, HUD 223(f) loans, and HUD 232 loans.
The main difference between the HUD 223(f) loan program and the MAP program is that the HUD 223(f) loan program is specifically designed for the purchase or refinance of market rate properties, while the MAP program is a loan processing system used for the processing of HUD 221(d)(4) loans, HUD 223(f) loans, and HUD 232 loans.
For more information on the HUD 223(f) loan program, please visit https://hud223f.loans.
For more information on the MAP program, please visit https://www.hud.gov/program_offices/housing/mfh/mfhsec/mfhmap.
What are the eligibility requirements for the HUD 223(f) loan program?
Eligible Borrowers for HUD 223(f) Loans: If you're an investor or developer who wants to use a HUD 223(f) loan to acquire or refinance a multifamily property, you'll need to make sure you that your borrowing entity has the correct legal structure. In general, HUD 223(f) loans require that the borrower is a single asset, special purpose entity (SPE), which can either be a for profit or a non-profit entity.
Eligible Properties for HUD 223(f) Loans: HUD 223(f) Loans Permit Nearly All Property Types. In general, to be eligible for HUD 223(f) financing, a property:
- Must have 5+ residential units
- Must have complete kitchens and bathrooms for each unit
- Can be row, walkup, detached, semi-detached, or elevator-type rental or cooperative housing
- Can be student housing, but multiple rents cannot be derived from one unit and rents need to be similar to comparable multifamily properties
- Can be market-rate, affordable, or rental assisted/subsidized (i.e. Section 8, Section 202)
- Cannot be an assisted living, skilled nursing, or memory care property (though independent living facilities for seniors are allowed)
- Must have all construction and major rehabilitation finished three or more years before beginning the HUD loan application process
Additional Hud Requirements and Items For Consideration:
- Loans greater than $75 million are subject to stricter DSCR constraints and more conservative leverage
- HUD 223(f) multifamily financing can be used with LIHTCs (Low-Income Housing Tax Credits)
- HUD 223(f) loans can be used for refinancing or purchasing Section 202, Section 236, and Section 8 funded properties
- A PCNA (Project Capital Needs Assessment) must be completed every 10 years
- Davis-Bacon prevailing wage rules are not applicable to repairs
To learn even more about the basics of submitting a file for consideration, visit the Apply Page of our website.
What are the advantages of the HUD 223(f) loan program?
The HUD 223(f) loan program offers many advantages, including:
- Non-recourse financing
- High leverage, up to 85% LTV for market-rate properties, 87% LTV for affordable properties, and 90% LTV for properties using rental assistance
- Low interest rates
- Lenient DSCR requirements of 1.18x for market-rate properties, 1.15x for affordable properties, and 1.11x for rental assistance properties
- Loan amounts up to $1 million, with no set maximum
- Terms between 10 and 35 years
- Fully assumable loans (with FHA/HUD approval)
For more information, please visit https://hud223f.loans and https://www.multifamily.loans/hud-232-223f-loans.
What are the maximum loan amounts for the HUD 223(f) loan program?
For investors who want to acquire or refinance multifamily properties, the HUD 223(f) Loan program is a highly effective option. Insured by the U.S. Department of Housing and Urban Development (HUD), HUD 223(f) loans begin at $1 million (though exceptions are sometimes made) and have no maximum loan amount. These loans offer some of the longest loan terms in the multifamily industry with a maximum term of 35 years, are non-recourse, fully assumable (with FHA approval), and offer fixed-rate financing at incredibly competitive interest rates with LTVs up to 85% for market-rate properties, and up to 90% for certain subsidized housing properties.
What are the terms and conditions of the HUD 223(f) loan program?
The terms of HUD 223(f) loans are as follows:
Loan amount $1 million, no set maximum Terms Between 10 and 35 years Leverage Up to 85% LTV for market-rate properties, 87% LTV for affordable properties, 90% LTV for properties using rental assistance. Interest rates Fixed for the life of the loan. Includes a mortgage insurance premium, or MIP. DSCR requirements 1.18x for market-rate properties, 1.15x for affordable properties, and 1.11x for rental assistance properties.
In addition, properties being acquired or refinanced with a HUD 223(f) loan must:
- Be at least three years old (for new properties), or have had the last substantial renovation three years ago or more (for renovated properties)
- Owner/developer must place funds monthly in a replacement reserve account
- Must meet HUD's minimum property standards
- Must be a non-luxury property
- Must be a multifamily property with at least 5 units
- Must be a rental property (no owner-occupied units)
- Must be located in the United States
- Must be a for-profit entity
- Must be a non-profit entity with 501(c)(3) status
For more information on HUD 223(f) loans, please visit this page.