Loan Programs

Affordable Housing

Refinance of HUD Loan

The HUD 223(a)(7) program provides a streamlined process for borrowers, including non-profits and housing authorities, with existing HUD loans to lower their interest rate, increase the loan term and replacement reserves, and complete minor repairs ($1,500 per unit, not subject to Davis-Bacon) that extend the economic viability of the project. If an existing prepayment penalty exists, proceeds from the 223(a)(7) refinance can fund those prepayment expenses.

Starting in 2017, affordable projects qualify for a significant reduction in debt service which can be completed with a quick HUD 223(a)(7) loan. 

As part of the streamlined process, borrowers are not required to secure a new appraisal, market study or environmental assessment, however a new PCNA (Property Capital Needs Assessment) is typically required as part of the application.

Typically, the a7 program takes 60-90 days from start to finish.

HUD defines Affordable Housing as projects that meet the following requirements:

  1. Rent and income restrictions must be imposed, monitored and enforced by a governmental agency for at least 15 years after construction, and
  2. Either
    1. a recorded Regulatory Agreement requiring the project to meet at least the minimum LIHTC restrictions of 20% of units at 50% of area median income (AMI), or 40% of units at 60% of AMI, with economic rents (i.e. the portion paid by the residents) on those units no greater than LIHTC rents, or
    2. a Project-Based Section 8 contract for 90% of the units.

Projects do not need to use tax credits to qualify as "affordable housing" as long as they meet the above rent restriction requirements.

Creative Solutions

Bedford Lending is a nationwide leader in providing finance solutions for affordable housing projects throughout the United States. No project is too big, small, or complex. We frequently finance loans that other lenders or institutions have difficulty completing. We have successfully worked on projects funded by, including, or requesting:

  • Section 202 Loans
  • Section 236 Loans (inc IRP Decoupling)
  • RAD Conversions
  • 9% & 4% Low Income Housing Tax Credits ( LIHTC )
  • Tax Exempt Bond Financing
  • Flex Subsidies
  • HAP Contracts

Often times, we meld subordinated loans or grants with our direct loan programs to fill critical equity gaps. Our direct HUD programs can be used to fund capital improvements, replenish replacement reserves and to add supportive services. In addition, we have extensive experience securing rent increases and helping with regulatory issues free of charge.


  • 35 Year Fixed Rate
  • Non-Recourse
  • Assumable
  • Declining Prepayment
  • Developer’s Fees Available
  • Cash Out for Capital Improvements