232/223(f): refinance or purchase of an existing facility

A 35-year, fixed-rate, fully amortizing loan to refinance or buy an existing licensed nursing home, assisted living facility or board and care home that has been open at least three years.

Who it fits

• The building was completed or substantially rehabilitated at least three years before the firm commitment application (2.9.A).
• It is licensed or regulated by the state and has at least 20 beds (2.2).
• Independent living is no more than 25% of the beds (2.2.F).
• The borrower does not need cash out: a 223(f) pays off debt and eligible costs only (2.9.D).

Loan limits

Maximum loan to value

80% for-profit, 85% nonprofit with a strong operating record; same for skilled nursing and existing assisted living (3.2)

Minimum debt service coverage

1.45, with the mortgage insurance premium counted as debt service (3.2)

Other loan tests

100% of the cost to refinance; for a purchase, the acquisition-cost test (3.8)

Term

Up to 35 years or 75% of remaining economic life, whichever is less; at least 10 (2.9.E)

Commercial space

At most 20% of floor area and 20% of income (2.9.F)

Costs

Mortgage insurance premium

1.00% upfront, 0.65% a year (0.45% a year with low-income housing tax credits)

HUD application fee

0.30% of the loan (2.5.W.1)

HUD inspection fee

$30 a bed when repairs are $3,000 a bed or less; otherwise 1% of repair costs (2.9.G)

Lender fee cap

3.5%, including the lender’s legal fees (3.3.A.11)

Reports to order

• Appraisal with market study (5.1)
• Property condition needs assessment (PCNA)
• Phase I environmental site assessment, within a year of the application (7.3)
• Asbestos survey and plan for buildings built before 1978 (7.7.C)

How long it takes

Among 170 232/223(f) loans in HUD's fiscal 2025 closings file that record every date, the median closed 235 days after HUD received the firm application (202 days to 286 days for the middle half). The median wait from application to underwriter assignment was 95 days, and from firm commitment to closing 101 days.

Firm commitment to closing, by fiscal year of closing, from HUD's endorsement database:

Endorsements of 232/223(f) loans by fiscal year: 2016: 258, 2017: 271, 2018: 287, 2019: 271, 2020: 255, 2021: 184, 2022: 149, 2023: 173, 2024: 220, 2025: 330, 2026: 278. Fiscal 2026 runs through the database's data run of July 8, 2026.

Note rates on 232/223(f) loans that closed in fiscal 2025: median 6.01%, middle half 5.85% to 6.18%. Month by month.

Estimate your closing date

Watch for

• Debt that does not meet HUD’s eligible-debt rules needs two years of seasoning (3.13.D).
• Prepayment penalties on the old loan count as eligible costs only up to 10% of the new loan (3.13.B).
• Express Lane priority is available for deals at 70% of value or less with strong coverage and, for nursing homes, CMS ratings of 2 stars or more (ORCF criteria of March 31, 2026).

The other Section 232 programs

• 232/223(a)(7) Refinance an FHA loan
• 232 NC/SR Build or gut-rehab
• 241(a) Add or improve

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.