HUD 232 Prepayment Penalty

Do HUD 232 Loans Allow for Supplemental Financing?

Do HUD 232 Loans Allow for Supplemental Financing?

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.

Prepayment Penalties in Relation to HUD 232 Loans

Prepayment Penalties in Relation to HUD 232 Loans

Like many HUD multifamily loans, HUD 232 loans typically have prepayment penalties. Prepayment penalties are designed to protect lenders from the financial losses they will incur if and when a borrower decides to pay off their loan early. HUD 232 and HUD 223/223(f) loan prepayment penalties are negotiable, but usually have a two-year lock out period followed by a 8%- 1% step down premium (i.e. 8,7,6,5,4,3,2,1).