HUD 221(d)(4) and 223(f), side by side

HUD's Programs of HUD 2025 book describes Section 223(f), under the National Housing Act authorities it cites, as mortgage insurance for the purchase or refinance of existing multifamily rental housing that does not require substantial rehabilitation. The housing has at least five residential units with complete kitchens and baths. Borrowers are investors, builders, and developers who meet HUD's requirements. The book points to 12 U.S.C. 1713 and 1715n(f) and to 24 CFR parts 200 and 207. The same book describes Section 221(d)(4) as the major insurance program for newly constructed or substantially rehabilitated multifamily rental or cooperative housing of five or more units, including moderate-income housing, for profit-motivated and nonprofit sponsors. It says FHA insures mortgages made by private lending institutions, and it cites 12 U.S.C. 1715l and 24 CFR part 200 and part 221, subparts C and D. Those are the program's own descriptions. This note does not add the replacement-cost percentages or coverage ratios that appear in older MAP chapters.

The practical split is the building's condition and the work. If you are buying or refinancing an existing apartment property and the work is not substantial rehabilitation, 223(f) is the program the book is describing. If you are building new apartments or doing substantial rehabilitation, 221(d)(4) is the program the book is describing. A bank construction loan or an agency loan on stabilized apartments can still be the better fit. Those paths are Arizona construction and agency. HUD arrangement pages, which do not make this firm a MAP lender, are Arizona HUD, Phoenix HUD, and Tucson HUD.

The three-year wait is not the rule Housing Notice H 20-03 left in place

Sponsors still hear that a 223(f) application must wait three years after construction. Housing Notice H 20-03, issued March 2, 2020, revised that practice. The notice says applications may be accepted once construction is complete and the programmatic debt-service test is met for not less than one full month, with additional limits if less than three years have passed. It does not apply to Section 232. This note does not quote the coverage figure in the notice. It also does not tell you that a brand-new building is automatically eligible. The HUD-approved lender reads the notice against the file.

Davis-Bacon labor standards are a construction question. HUD's 2025 programs book says the Davis-Bacon and Related Acts require prevailing wages on federally funded or assisted construction contracts above the statutory threshold the book states, and that HUD oversees those requirements on HUD-assisted and insured housing. A 221(d)(4) job is construction or substantial rehabilitation, so labor standards are part of that conversation. A 223(f) acquisition of an existing building that does not need substantial rehabilitation is generally not that conversation. The HUD-approved lender and counsel decide which wage decision, if any, applies. This note is not that decision, and it is not legal advice.

Who signs the note

The 2025 book says FHA insures mortgages made by private lending institutions. An older MAP guide chapter described MAP lenders as the parties who submit 221(d)(4) applications. This office does not claim MAP approval, does not claim LEAN approval, and does not hold itself out as the insured lender. Capital Market Funds arranges the introduction and the package with a HUD-approved lender. Capital Market Funds is not a Fannie Mae DUS lender either. Agency debt and HUD debt are different programs.

Choose 221(d)(4) when the work is new construction or substantial rehabilitation of five or more units. Choose 223(f) when the apartments already exist and substantial rehabilitation is not the plan. Choose a bank or an agency execution when the HUD calendar is the wrong tool for the business plan. The closing sequence, without a promised number of days, is Arizona commercial closings. The office is 7373 E Doubletree Ranch Rd #255, Scottsdale, AZ 85258. The phone is (480) 495-8072. Capital Market Funds, LLC - CBK-2007014 - Commercial Mortgage Banker and NMLS 1445066.