Multifamily - Construction Rehab

Multifamily Housing

Multifamily Construction or Rehabilitation

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 multifamily projects nationwide. For existing properties that need rehabilitation, the 221(d)(4) program is used when repairs exceed ~$35,000 per unit. If repairs are below this threshold, the HUD 223(f) program is typically used.

Eligible properties can secure:

  • 40 year fixed rate
  • Fully amortizing
  • Non-recourse financing.
  • Minimum 85-90% LTC 
  • 1.11x - 1.176x DCR Requirement
  • Declining prepayment

All HUD loans are also assumable, making HUD an excellent option for long term investment scenarios or short term holds. Unlike bank financing where a permanent loan is secured after the construction loan, with HUD the construction and permanent process is completed as one, and the interest rate for the permanent term is locked prior to construction. Construction interest payments are also capitalized in the mortgage amount.

Typically, the 221(d)(4) program takes about 6-7 months to complete, and is available nationwide. There are no borrower minimum income, net worth, or FICO requirements, and there are no affordable restrictions imposed by HUD. Properties can be 100% market rate, in any configuration (townhomes, garden style, etc). Under the program, borrowers can utilize a variety of credits to potentially increase the leverage to 90%+ for market rate properties, and tax credits or other public grant sources can combined with HUD to provide 100%+ financing including a developer's fee.

As an added protection, the first step in the process after our extensive due diligence, is a formal discussion with HUD - called a "Concept Meeting" before any third parties are secured or money is spent. Bedford Lending does not charge up-front fees, we only receive our finance fee as part of a successful closing. We are a direct lender, not a broker or intermediary.

Please see the "HUD 221d4 Overview Presentation" PDF on the right side of the page for more information.


  • 40 Year Fixed Rate
  • Non-Recourse
  • Assumable
  • Declining Prepayment
  • 100% Market Rate Eligible
  • No Affordability Restriction