HUD 232 Rate Commitments
No one wants to begin the mortgage process then watch interest rates increase before closing on a property. Specifically, a higher interest rate means more money out of your pockets. For this reason, lenders typically offer rate commitments (or rate locks). Because interest rates fluctuate, sometimes daily, locking in a favorable interest rate can save lots of money. Especially if rates are trending upwards.
Like many other kinds of HUD loans, HUD 232 and HUD 232/223(f) loans offer rate locks at commitment. Unfortunately for borrowers, early rate locks are not typically allowed. However, borrowers should check with their individual lender to see if they are available. Rate lock deposits typically cost 1% of the entire loan amount and are refunded at closing.