Developers Can Now Use HUD 223(f) to Refinance Newly Built or Recently Rehabbed Properties
In the past, HUD required three years of post-construction occupancy of properties to qualify for refinancing with the HUD 223(f). The wait is over, and First Housing is now accepting applications to refinance newly built or substantially rehabbed properties with the HUD 223(f) as soon they achieve the applicable programmatic Debt Service Coverage Ratio (DSCR) for a minimum of one full month. This is a game changer since borrowers can now take advantage of the benefits of the 223(f) sooner after construction completion and lease-up for both market rate and affordable developments. Today, interest rates for the 223(f) are at historical lows (2.46% as of June 4, 2020) with a fully amortizing loan of 35 years. HUD made this modification to facilitate opportunities for borrowers to refinance stabilized properties and increase the supply of affordable and workforce housing.