HUD 221(d)(4) Interest Rates
One of the biggest benefits of HUD 221(d)(4) loans is their incredibly competitive fixed interest rates. Unlike some types of multifamily financing, which involve adjustable rate mortgages, HUD multifamily construction loan borrowers can rest easy. No matter what happens with the market, their monthly debt expenses won't suddenly rise when interest rates go up.
During the last year, interest rates on HUD 221(d)(4) loans have generally varied from 3.10 - 4.10%, not counting MIP. In order to make sure the costs of a project stay consistent, many developers opt for a rate lock. This can last between 30 to 180 days. However, developers who want to be particularly cautious can also choose an earlier rate lock, which is completed during the HUD 221(d)(4) approval process.