HUD 223(f) Market Studies

If you're an investor looking to use HUD 223(f) financing in order to purchase or refinance a multifamily property, a Market Study is one of the most important third-party reports that you'll need to have complete before submitting your application to HUD. Market Studies take a close look at many components of a multifamily development in order to estimate its current and future profitability.

In most cases, a Market Study must be no more than 120 days old when submitting to HUD at loan application. Market Studies have two major components:

  • HUD Valuation Analysis: This looks specifically at the target property in order to determine current and potential profitability.

  • HUD Market Condition Analysis: This examines the general condition of the multifamily real estate market in the target property's area. 


A HUD Valuation Analysis carefully examines a property in order to:  

  • Estimate the project's market value

  • Assess the property's viability as mortgage collateral

  • Analyze market needs

  • Project potential expenses/estimated income

  • Record current rents (both residential and commercial)

  • Determine whether rents are sufficient to cover:

    • Mortgage payments, including MIP

    • Monthly escrows/replacement reserves

    • Other expenses (including management, maintenance, and utilities)


The other major segment of the Market Study, a Market Condition Analysis, looks more at the general health of the multifamily real estate market in the project's area. This helps HUD determine the property's short and long-term economic viability. The Market Condition Analysis looks at factors including: 

  • Specific market conditions that could affect the project's profitability

  • Geographic boundaries/characteristics of the market area

  • Estimated absorption time for the project's units

  • Supply and demand for multifamily real estate units in the area