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Refinance & Optimize Your Multifamily Property with FHA® 223(a)(7) Loans

Our streamlined refinancing solution is designed to make the process efficient and hassle-free, allowing you to optimize your property for maximum returns.
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We Offer
FHA 223(a)(7) Loans

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Capital Investors Direct is more than a lender; we are your strategic partner in maximizing the potential of your multifamily investment. Our FHA® 223(a)(7) refinancing program is crafted to meet your specific needs, offering a seamless and advantageous solution for existing HUD-insured loans.
Competitive Rates
Flexible
Terms
FHA
Backing
Streamlined
Processes
Expert
Guidance

FHA 223(a)(7) Loan Terms and Requirements

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Loan Term & Amortization

The remaining term of the current HUD loan, plus an additional period of up to 12 years (subject to HUD approval). The total term cannot surpass the original duration of the existing loan, and the loan is entirely self-amortizing.

Maximum loan amount

No cash-out allowed; the new loan amount is determined as the lesser of:

1. The original principal balance of the existing loan.

2. 100% of the costs associated with refinancing (including the current principal balance, transaction costs, repairs, and deposits to replacement reserves).

3. Achieving a minimum debt service coverage of 1.11 (1.05 for properties with Section 8 contracts covering at least 90% of units).

Interest Rate

fixed rate is contingent on prevailing market conditions at the time of rate lock.

Eligible Properties

Multifamily projects or healthcare facilities presently insured under Sections 220, 221(d), 223(f), 232, 241, and 242.

Eligible Borrower

A singular asset entity, whether for-profit or nonprofit.

Cash Out

It is not allowed

Tax & Insurance Escrows

Monthly contributions to the escrow accounts are mandatory, covering expenses such as property insurance, real estate taxes, reserves for replacement, and mortgage insurance premiums.

Recourse

Nonrecourse financing contingent upon adherence to the HUD Regulatory Agreement.

Required reports

A new Property Condition Needs Assessment (PCNA) is necessary if the most recent report is more than two years old.

Prepayment

Generally, set at 10% in the first year, decreasing by 1% annually; alternative prepayment options may be considered based on prevailing market conditions.

Assumable

Contingent upon approval from both HUD & CID, along with the payment of an assumption fee.

Good faith deposit

Subject to negotiation, contingent on the size of the loan.

Expense escrow

Yes, adequate to encompass our expenditures and expenses related to third-party reports.

Origination fee

Subject to negotiation

HUD application fee

A payment of 0.15% of the new loan amount is required and should be remitted to HUD upon submission of the Firm Commitment Application.

HUD inspection fee

Not applicable

Legal/closing fee

The borrower is responsible for covering our legal fees and other miscellaneous closing costs.

Davis–Bacon Act

Not applicable to this program

HUD mortgage insurance premium (MIP)

HUD determines the cost of FHA Insurance:

1. For market rate properties: 0.50% upfront and 0.50% annually.
2. Affordable properties: 0.35% upfront and 0.35% annually.
3. Broadly affordable or energy-efficient properties: 0.25% upfront and 0.25% annually.

FHA 223(a)(7) financing  Loans & Its Benefits

What is FHA 223(a)(7) Loan?

FHA 223(a)(7) loans, insured by the Federal Housing Administration (FHA), are specifically designed for the refinancing of existing FHA-insured multifamily properties, including apartments, hospitals, nursing homes, and assisted living facilities.

Unlocking Opportunities with FHA® 223(a)(7) Financing

Property Type Flexibility

FHA® 223(a)(7) loans can be applied to both multifamily projects and healthcare facilities currently insured under various HUD sections, offering flexibility in eligible property types.

Fixed Rate Subject to Market Conditions

The fixed interest rate provides stability, and it is subject to prevailing market conditions at the time of rate lock, allowing borrowers to secure favorable rates.

Fully Self-Amortizing

These loans are fully self-amortizing, allowing borrowers to repay the loan through regular, structured payments over its term.

Key Feature of FHA 223(a)(7) Loans

By providing a path to refinance existing FHA-insured loans, this financing solution allows investors to unlock trapped equity in their properties, thereby freeing up resources for further investments.

Streamlined Approval Process

Say goodbye to lengthy paperwork and complex procedures. Our FHA® 223(a)(7) loans offer a streamlined approval process, ensuring a smoother experience for borrowers.

Remaining Term Extension

Extend the remaining term of your existing HUD loan by up to 12 years, subject to HUD approval. Maximize your loan term without exceeding the original term of the current loan.

Fully Self-Amortizing Loan

Our FHA® 223(a)(7) loans are fully self-amortizing, meaning that the loan payments include both principal and interest.

No Cash-Out Refinancing

While providing the opportunity for refinancing, FHA® 223(a)(7) loans do not allow cash-out refinancing. The loan amount is determined based on specific criteria, ensuring responsible financing.

Versatile Application

Apply FHA® 223(a)(7) loans to multifamily projects or healthcare facilities currently insured under Sections 220, 221(d), 223(f), 232, 241, and 242. Explore the possibilities for your property.

Non-recourse Financing

Rest assured that your personal assets are protected. Our FHA® 223(a)(7) loans typically provide nonrecourse financing, ensuring that your personal assets are not at risk in case of default.

Commercial Space Limitations

While FHA® 223(a)(7) loans offer numerous benefits, it's important to understand their limitations as well, particularly when it comes to commercial space.

These loans restrict the amount of commercial space that can be included in the financed property.

To be eligible, the commercial space must not exceed 25% of the gross area of the project.

This limitation ensures that the main focus remains on the residential use of the property, aligning with the FHA's mission to support affordable residential housing.

It's crucial to consider this factor when planning your refinancing strategy with FHA® 223(a)(7) loans.
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Location
We Cover

50

States & US Territories

Capital Investors Direct provides commercial hard money loan financing options in the following geographic locations of the United States:

200

200 MSA Tier I & Tier II Cities

Maryland, Texas, Florida, Utah, Colorado etc. We offer CRE Bridge Loan in top cities like Denver, Chicago, Colorado, San Diego etc.

How it Works?

Capital Investors Direct funds different commercial properties across the country. Below are few commercial properties we lend hard money for –
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01

Fill Out the Form

Apply for a commercial property loan in
5 minutes by filling out the form

02

Get Approval

We will get back to you within 24 hours
with a written disclosure of all loan terms

03

Loan Funded

Within days, the money will be credited
to your account.

Why Choose Us?

We go above and beyond to add to our list of satisfied customers and ongoing clientele We go above and beyond to add to our list of satisfied customers and
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01

Streamlined Refinancing Process

Capital Investors Direct streamlines the refinancing journey, providing a hassle-free process to enhance the efficiency of your financial strategy.

02

Competitive Terms

Our FHA® 223(a)(7) refinancing offers a cost-effective solution for maximizing the returns on your investment.

03

Flexible Loan Terms

Capital Investors Direct recognizes that each project is unique, and we work with you to customize loan terms that align with your goals.

04

Commitment to Client Success

Your success is our priority. We are dedicated to fostering long-term relationships by ensuring that our clients achieve their financial objectives.

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Suite 360 Rockville,
MD 20854
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