Multifamily - Supplemental Loans

Supplemental Loans

241(a) Supplemental Loan

Our direct HUD 241(a) program provides a process for borrowers with existing HUD loans to finance repairs, replacements (including major movables), energy conservation measures, and additions. Additional units can be constructed on the site of the existing project, or on land parcels adjacent or nearby. 

The program is designed to allow property owners to extend the life of their project and remain competitive in the marketplace and/or to add units in a slightly different way than the 221(d)(4) construction program. 241(a) is a supplemental loan; it does not require the refinancing or payoff 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.


  • 90% LTC
  • 1.11x DCR