Affordable Housing - Supplemental Loans

Supplemental Loans

Section 241(a) Supplemental Loan

The HUD 241(a) program provides a process for borrowers with existing affordable properties insured by HUD to finance repairs, replacements (including major movables), energy conservation measures, and additions. The program is design to allow property owners to extend the life of their project and remain competitive in the marketplace. 241(a) is a supplemental loan, it does not require the refinancing of the underlying first mortgage.

The term of the 241(a) loan must be coterminous with the existing FHA insured first mortgage unless remaining term is 25 years or less. If less than 25 years, term can extend up to 40 years.

Third party reports, reserves, escrows, and Davis-Bacon requirements are generally identical to the 221(d)(4) new construction programmatic requirements.

Typically, the 241(a) program takes about 4-6 months to complete.


  • 90% LTC
  • 1.11x DCR