Do HUD 232 Loans Allow for Supplemental Financing?

HUD 232/241(a) Loans Provide Supplemental Financing for HUD-Insured Healthcare Facilities

If you already have a HUD 232 or HUD 232/223(f) loan for an assisted living, skilled nursing, or memory care facility, can you get additional financing to make upgrades or improvements to the property? The answer is yes. And, with the HUD 232/241(a) loan, it’s easier than ever.

What are the Terms of HUD 232/241(a) Loans?

HUD 232/241(a) loans must typically be coterminous with the original HUD 232 loan (ending at the same time.) However, borrowers may be able to get a waiver from HUD to extend the term of the HUD 232/241(a) loan to 40 years. HUD 232/241(a) loans have a maximum amount equal to the lesser of:

  • 90% of FHA’s allowable replacement cost

  • 90% of the market value added by the project

  • Amount resulting in a combined DSCR of 1.45x, (which includes the debt service on the current HUD 232 loan)

HUD 232/241(a) loans are also fully assumable, have an annual MIP of 0.72%, and can typically close within 8 weeks of initial application.


To learn more about FHA 232 loans, fill out the form below to speak to a HUD/FHA loan expert.