What is Prepayment?

Prepayment in Relation to HUD 232 Financing

Prepayment is paying off a loan balance before maturity (the end of the loan term). HUD 232 loans usually have prepayment penalties, which are often 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).

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