FHA 223 (f) Apartment Loans?

Question

Hello,

I did some research and this seems like a good way to go for multi-family financing. Does anyone have any more information on FHA apartment loans? What are the requirements, any advice would be great! Thanks

Thomas Alexander · Answer

“Section 223(f) insures mortgage loans to facilitate the purchase or refinancing of existing multifamily rental housing.”  So first things first, this is not an FHA/HUD loan, because HUD does not lend money, FHA provides insurance on the loan allowing the lender to sell a security to fund the loan.  So while FHA/HUD underwrites and approves the loan they do not fund it.

In addition, Seeing as you still need around 20% down, I don't see the real benefit of this route. I am curious also if you are required to live in one of the units like a traditional FHA for 4 or less units.

Michael Seeker · Answer

Have you tried googling it at all?  I did a quick search and it looks like they're mainly used for higher price points ($2M+) and/or refinancing.

From what I read this didn't sound like a feasible option for something small, like purchasing a $500K 6-plex since you're looking at 3+ months to close and loads of paperwork.  If you're looking to refi such a property, it might be worth the time/effort or if you're looking to purchase a more expensive property where the seller is willing to wait up to 6 mos before closing.