FHA SECTION 202/223(f) – Multifamily Accelerated Processing (MAP)

Loans to recapitalize Section 202 Elderly Housing Projects


  • Provides Section 202 projects with capital for repairs, renovations and enhanced programs.
  • Maximum loan to value (LTV) is 90%; maximum term is 35 years with full amortization.
  • Loan is pre-payable, assumable and non-recourse.
  • Requires a 1.11 X debt service coverage based on a maximum of 97% occupancy.
  • Underwriting based on Section 8 Housing Assistance Payment (HAP) Contract rents even if higher than market rents. HUD typically will extend HAP Contract for 20 years.
  • The cost of repairs and initial deposit to a reserve fund for building/equipment replacement can be included in the financing.
  • The cost of rehabilitation must not exceed the greater of a) $15,000 per unit adjusted by a high cost percentage based on geographic location; or, b) involve the replacement of at least 2 major building components. Projects whose costs exceed these limits may qualify under the Section 221(d)(4) substantial rehabilitation program.
  • Loan can include a Development Fee equal to 15% of acceptable development costs.


0.30% Application Fee to FHA
0.25% Upfront Mortgage Insurance Premium
Inspection Fee:

  • $30 per unit where the repairs/improvements are greater than $100,000 in total but $3,000 or less per unit.
  • The greater of $30 per unit or 1% of the cost of repairs or $1,500, where the repairs/improvements are more than $3,000 per unit.
  • $1,500 where the total repairs/improvements are less than $100,000 (Can be waived).
2.00% Maximum Financing (Origination) Fee
1.50% Maximum Placement Fee
2.00% Costs of Issuance for Tax-Exempt Bond Transactions

An annual 0.25% Mortgage Insurance Premium is paid to FHA as part of the monthly mortgage payment requirements. Additional fees will be required for third party appraisals, environmental reports and project capital needs assessments (PCNA). The costs of these reports can be paid from existing reserve for replacement funds subject to HUD approval.


  • Escrows required for property insurance, real estate taxes, and FHA mortgage insurance premium.
  • Replacement reserve escrow for on-going replacement of depreciable items is required for the term of the loan. Projects must obtain a new PCNA every 10 years, with the reserve for replacement deposit adjusted based on the results of the PCNA.
  • Repair escrow equal to 110% of the cost of repairs is required at closing. Approximately 100% is funded from loan proceeds; the Borrower is required to fund the remaining 10%, which is release upon completion of repairs. The Development Fee can be used for these purposes.