Understanding Current Rates and Refinance Programs as of August 2025

The FHA insured multifamily refinance program, offers several benefits for property owners and investors looking to refinance their multifamily properties.  It is a conventional financing method that does not require subsidized units, limited dividend or any other terms that interfere with normal multifamily operations.  Some of the benefits include:

1. Lower Interest Rates: One of the primary advantages of the FHA insured multifamily refinance program 223(f) is the opportunity to secure long term loans with low fixed interest rates. These rates are typically more favorable than those available through conventional financing, resulting in reduced monthly mortgage payments and increased cash flow for property owners.  Current rates are estimated for different sources at the end of this article.

2. Longer Loan Terms: The program offers fixed rate and term at 35 years. This longer repayment period provides borrowers with more manageable monthly payments and increased stability in cash flow projections. It also reduces the need for frequent refinancing, allowing property owners to focus on property management and other investment-related activities.  There are no rate adjustments or balloon payments due.  They are typically 35 year, fixed rate, self-amortizing loans.

3. High Loan-to-Value Ratio: With the 223(f) program, borrowers can refinance or acquire up to 87% of the appraised value of their property. Cash out is at 80% LTV. This high loan-to-value ratio allows property owners to access a significant amount of capital and leverage their investment. The additional funds can be used for various purposes, such as property improvements, debt consolidation, or other financial needs.

4. Non-Recourse Financing: FHA-insured loans are non-recourse loans, which means that in the event of default, the lender's recourse is limited to the collateral (the property) and does not extend to the borrower's personal assets. This feature provides protection for property owners, and their investors.  It minimizes personal liability and risk.

5. Streamlined Underwriting Process: The 223(f) program offers a streamlined underwriting process, simplifying and expediting the loan application and approval process. This efficiency reduces administrative burdens and allows borrowers to access capital more quickly, enabling them to take advantage of investment opportunities and execute their business plans promptly.

6. Property Improvement Financing: The 223(f) program allows borrowers to include funds for property improvements and repairs in the refinancing loan amount. The loan can take care of deferred maintenance and/or property improvements.   It provides access to capital for necessary upgrades, enhancing the property's value and improving its market competitiveness.

7. Assumable Loans: FHA-insured loans are assumable that can be attractive to potential buyers, as it offers flexibility and may simplify the purchasing process. It can also enhance the marketability of the property and potentially increase its value. 

8. Economic Stability and Predictability: These loans for acquisition and refinance increases stability and predictability to property owners, particularly in times of economic uncertainty. The fixed interest rates and long loan terms shield borrowers from market fluctuations and interest rate increases, providing a reliable financing solution over the life of the loan.  The loan helps with the raising of capital as investors have little unknowns such as balloon payments, interest rate hikes, rent controls and other advantages.

In summary, the FHA insured multifamily refinance program 223(f) offers a range of benefits, including lower interest rates, longer loan terms, high loan-to-value ratios, non-recourse financing, streamlined underwriting, property improvement financing, assumable loans, and economic stability. These advantages make it an attractive option for refinancing multifamily properties and can significantly enhance the financial position and operational capabilities of borrowers.  

Loan Program                        Rates                           Terms                                    Amortization

Fannie Mae REFI (80LTV)           5.63 – 6.02%        5 - 30 years                           5-25 years

Freddie Mac  REFI (80LTV)            5.88 – 7.30%        5 - 10 years                           5-30 years

CMBS Loan REFI   (75LTV)           6.03 – 7.40%       5 - 10 years                           30 years

FHA Ins. Refi/Acq   (87LTV)           4.85 -  6.10%        35 years                               35 years

 HUD Ins. Constr. (87%LTC)     4.96 -  6.28%   converts to 40 Year Perm        40 years

Rates updated as of August 1, 2025.  Fannie, Freddie and CMBS based on 1:25-1:30 debt service coverage.  FHA based on 1:15 DSC. FHA insured loans are always nonrecourse.

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Mr. Panagako has been awarded the certified property manager designation, has managed over 60,000 apartment units and personally financed developments using FHA insurance programs from Alaska to Florida. Previously John had his own property management company and is now the President of Trust Mortgage Company, Inc. He handles origination and processing from his Boston and Long Island offices. Since 1988 Trust Mortgage Company and its affiliates have processed hundreds of HUD and commercial real estate loans as a direct lender and correspondent. Mr. Panagako was appointed to a lobbying group that met quarterly with HUD central office, to plan future housing programs and critique current programs. He was also appointed to the legislative committee of the Mortgage Bankers Association. He has been on fundraising committees for three colleges and was appointed a trustee and on the executive committee of a theological school and a college in Boston.