Does FHA multifamily construction financing place limits on rehabilitation work?

FHA/HUD Multifamily Loan Rehabilitation Work Limits 

If you're considering applying for a HUD 221(d)(4) loan to rehabilitate a multifamily property, it's important to realize that there are minimum FHA/HUD multifamily project size limits that must be met. Otherwise, the project won't fit into the FHA's multifamily loan guidelines-- and won't be considered large enough to be eligible for the loan. 

FHA/HUD Loan Minimum Limits 

In addition to the specific minimum limits of the loan in question, properties must meet one of the following requirements to qualify as ‘substantial rehabilitation' of a multifamily property. Replacements, repairs, and improvement costs for an existing property must be more than:  

  • 15% of the property’s replacement cost after of all work is completed OR
  • $6,500 per unit as adjusted by the local HUD office OR
  • Replacing two or more buildings, regardless of cost

To learn more about FHA 221(d)(4) financing, fill out the form below and a HUD loan specialist will get in touch.