Apartment Rehab Loan

apartment rehab loan FHA provides mortgage insurance to facilitate the development of rental housing. The 221(d)(4) program is FHA's primary program for the new construction and significant rehabilitation of multifamily rental properties by non-profit or for profit purchasers.



  • Long-term fixed rate financing up to 40 years is always available
  • Mortgage loan amounts up to 90% of project replacement cost
  • Rates may be fixed before start of construction
  • Many developers obtain FHA insurance commitments and then choose when to lock the rate
  • Federal guarantee results in AAA rating on financing
  • Eligible for securitization by Government National Mortgage Association (Ginnie Mae)
  • Provides construction and permanent financing
  • Non-recourse loans (borrower is not liable in case of default)

Program Eligibility:

  • Properties must have 5 or more rental units
  • Projects may be designated for elderly (age 62 or older) or handicapped residents
  • Properties must comply with specified HUD and local standards
  • Owner must sign regulatory agreement with FHA governing project operations
  • Projects are subject to cost certification


New Construction or Substantial Rehabilitation
  • Brief summary detailing usage, property income source and organizaton background
  • 2 years tax returns for the organization and the principals owning more than 5%.
  • 2 years income statements and balance sheet, plus YTD period financials.
  • Personal financial statements on principals owning more than 5%.
  • Resumes of the principals.
  • Pro Forma Net Operating Statement for three years.
  • Simple recap of Construction Costs.
  • Plans and Specifications for Construction.
  • Completed Loan Applications and Credit Authorizations.
  • Most current rent roll