Section 232 program · 232/223(a)(7)
232/223(a)(7): streamlined refinance of an existing fha loan
A refinance of a loan HUD already insures, at a new rate, with lighter underwriting: no appraisal, 1.11 coverage, and a loan no larger than the original principal of the loan it replaces.
Who it fits
- The property already has an FHA-insured Section 232 loan, including 223(f), 241(a) and 223(d) loans (2.10).
- Coinsured, risk-share and HUD-held loans are not eligible.
- The loan is for a lower rate or payment; it adds no proceeds.
Loan limits
- Loan amount
- The lowest of the request, the original principal of the existing FHA loan, the 1.11 coverage test and 100% of the cost to refinance (3.9)
- Minimum debt service coverage
- 1.11, with mortgage insurance counted (3.2)
- Term
- Generally the remaining term; HUD can extend it by up to 12 years, never past the program’s statutory term (2.10)
Costs
- Mortgage insurance premium
- 0.50% upfront, 0.55% a year (0.45% with tax credits)
- HUD application fee
- 0.15% (2.10.C)
- HUD inspection fee
- None (2.10.D)
- Lender fee cap
- 2%
Reports to order
- No appraisal (5.1)
- A PCNA only if none was done in the last ten years, the term is being extended, or a nursing home is not fully sprinklered (2.10.J)
How long it takes
Firm commitment to closing, by fiscal year of closing, from HUD's endorsement database:
| Fiscal year | Loans | Median days | Middle half |
|---|---|---|---|
| 2016 | 12 | 54 | 43 to 77 |
| 2017 | 25 | 63 | 49 to 80 |
| 2018 | 8 | 96 | 57 to 128 |
| 2019 | 2 | 154 | n/a |
| 2020 | 55 | 82 | 62 to 97 |
| 2021 | 153 | 77 | 61 to 105 |
| 2022 | 97 | 101 | 73 to 125 |
| 2023 | 21 | 96 | 79 to 135 |
| 2025 | 1 | 190 | n/a |
Endorsements of 232/223(a)(7) loans by fiscal year: 2016: 12, 2017: 25, 2018: 8, 2019: 2, 2020: 55, 2021: 153, 2022: 97, 2023: 21, 2025: 1. Fiscal 2025 runs through the database's data run of July 8, 2026.
Watch for
- Closing costs and the upfront premium are paid whatever the rate saving, so a small rate gap may not pay.
- The original-principal cap can leave no room to finance costs on a loan that has barely amortized.
The other Section 232 programs
Rules: HUD Handbook 4232.1 REV-1, Section II (effective January 19, 2017), section numbers in parentheses. Premiums: Federal Register, June 26, 2025 (90 FR 27330). Times and rates: HUD Office of Healthcare Programs records; see the methodology. Route 232 is not affiliated with HUD or FHA.