HUD 221 (d)(4) Construction Loan

FHA/HUD 221 (d)(4) Construction Loans offer multifamily investors the highest leverage and lowest cost for non-recourse construction loans.  These popular programs allow interest only payments for up to 3 years during construction, and then a fixed rate for the remainder of the loan term.


  • High leverage: HUD Section 221(d)(4) loans can finance up to 85% of the project cost, which can help developers and builders reduce their upfront equity requirements.
  • Long-term financing: HUD Section 221(d)(4) loans have a maximum term of 40 years, which can help developers and builders achieve more stable cash flow and lower their overall borrowing costs.
  • Non-recourse financing: HUD Section 221(d)(4) loans are non-recourse loans, which means that the borrower is not personally liable for the debt if the project fails. This can help protect the borrower’s personal assets in the event of a default.
  • Fixed interest rates: HUD Section 221(d)(4) loans have fixed interest rates, which can help developers and builders budget for future costs.
  • FHA mortgage insurance: HUD Section 221(d)(4) loans are insured by the Federal Housing Administration (FHA), which can help lenders reduce their risk and make loans more available to borrowers.

In addition to these benefits, HUD Section 221(d)(4) loans can also be used to finance the construction or rehabilitation of multifamily rental or cooperative housing for moderate-income families, the elderly, and the handicapped. This can help to create affordable housing and promote community development.

Mortgage Insurance Premium

Multifamily investors using FHA/HUD 221 programs will pay Mortgage Insurance Premiums on an ongoing basis. MIP rates will vary depending on whether the property is Market Rate, Section 8, LIHTC, or Green Loan.

Reduced MIP - Green Upgrades

Investors that incorporate green upgrades and energy-efficient improvements can qualify for reduced MIP

Our team of professionals can help qualify your property, and guide you through the funding process.