Can HUD 223(f) Loans Be Used for Student Housing?
HUD 223(f) Loans Can Finance Student Housing Under Certain Conditions
As investors seek to diversify their portfolios, many have turned to student housing. In 2016 and 2017, over $18 billion investment dollars went into this sector. Predictions show that by the end of 2018, another $8 billion dollars will be invested in the student housing sector. Knowing this, more and more investors are taking advantage of the growth potential in student housing properties.
If you want to purchase or refinance a student housing property, you can use a HUD 223(f) loan to do so. However, there are certain conditions you should know about. Specifically, properties financed with HUD 223(f) loans cannot take in more than one source of rent from a single unit. In addition, student housing rents must be comparable to other multifamily properties in the area. In general, rents cannot be discounted just because the property is marketing units to students.