Affordable Housing - Construction Rehab

Affordable Housing

221(d)(4) Construction / Rehab

Our direct HUD 221(d)(4) program provides 40 year fixed rate, non-recourse, assumable debt financing for the ground up construction or rehabilitation of affordable housing projects nationwide. Most affordable housing properties generate less revenue than market rate developments, which requires the highest leverage financing available to reduce borrower equity needed at closing. HUD offers minimum 87%-90% LTC financing for affordable transactions, which can be combined with other equity sources and subordinate debt to meet or exceed 100% financing. A developer's fee is also available in some scenarios.

For existing assets, if a property requires ~$40,000+ per unit in repairs or is less than 85% occupied, it will require the 221(d)(4) loan program for the renovation work. For repairs below this threshold, the 223(f) acquisition and refinance loan program may be utilized which is a more abbreviated loan program.

Bedford Lending specializes in helping borrowers, including non-profits and Housing Authorities (who may have little to no familiarity with HUD financing) successfully recapitalize, renovate, or add to their housing portfolios. Construction and rehab loans require significant expenditures on soft costs prior to loan closing, which means a high confidence that the transaction will close is critical before getting started. Before any monies is spent, a formal analysis and discussion between HUD and all parties about the proposed transaction is completed free of charge to minimize borrower risk.

The 221(d)(4) program generally takes 6-12 months to complete. Projects with tax credits qualify for "single stage" processing which may reduce the overall underwriting time by 60 days. For RAD conversions, the timing of the conversion process aligns with the HUD 221(d)(4) program, and both can be processed concurrently. 

Projects do not need to use tax credits or have a HAP contract to qualify as "affordable housing". Please view our documents located to the right of this page for more information.


  • 40 Year Fixed Rate
  • Non-Recourse
  • Developer's Fee Available
  • Highest Leverage Loans
  • Can Combine with LIHTC
  • RAD Conversions Eligible