Are the interest rates fixed with FHA 221(d)(4) loans?

HUD/FHA 221(d)(4) Loan Interest Rates 

One of the major benefits of the FHA 221d4 loan is the fact that it has incredibly competitive interest rates. But are these interest rates fixed or variable? Let's take a look. 

HUD/FHA 221(d)(4) Loans Have Fixed Interest Rates 

Throughout the life of HUD multifamily construction loans (both construction and permanent stages), interest rates remain fixed. That means that investors and developers using HUD loans can rest easy knowing that their interest rates won't suddenly rise. As a result, estimating annual profit margins is significantly easier. 

HUD/FHA 221(d)(4) Loans Are Interest Only During the Construction Period 

Another benefits of HUD/FHA 221(d)(4) loans is the fact these loans are interest-only during the construction period. In brief, this provides for up to an additional three years of financing at the same fixed rate. Plus, as we just mentioned, these loans are being offered at highly competitive rates: 40-year fixed and fully amortizing interest rates as of November 2017 are ranging between 4.10% and 4.75%, which include MIP. And, for borrowers who qualify for a green MIP reduction, those rates could end up being even less. 


To learn more about the benefits of the HUD 221(d)(4) loan, fill out the form below and an HUD mortgage specialist will get in touch.