Lockouts

Lockouts in Relation to HUD 223f Financing

Lockouts in Relation to HUD 223f Financing

Like many multifamily loans, HUD 223(f) loans have various prepayment provisions, which include certain prepayment penalties. One common prepayment provision is called a lockout, which prevents a borrower from repaying a loan at all for a specific period of time. While all prepayment provisions are negotiable for HUD 223(f) loans, lenders will typically insist on a lockout period of between 0 and 2 years.