Updated July 21, 2026
A HUD/FHA 223(f) loan is a federally-insured, non-recourse permanent loan for acquiring or refinancing an existing stabilized apartment property — up to 83.3% LTV for market-rate deals (higher with affordability restrictions), fixed for up to 35 years, at DSCRs as low as roughly 1.18x.
In exchange for the longest terms and lowest coupon on the market, 223(f) borrowers accept a slower, more document-intensive HUD approval process (typically several months) and pay a mortgage insurance premium — around 1% at closing and a smaller annual charge thereafter — plus HUD's ongoing reporting and reserve requirements.
For an LA seller whose building would qualify, mentioning that a buyer could finance the deal with 35-year fixed HUD paper is a real value-add point in the offering — it materially changes a buyer's cash-on-cash math relative to a shorter-term bank or agency loan. The slower process tends to suit longer-fuse 1031 buyers over ones racing an identification deadline.
From the Sterman LA Multifamily Glossary — defined the way a broker actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
Thinking about selling? Get a no-obligation evaluation on your building.
Request Free Evaluation →