Affordable Housing - New Construction/Rehabilitation Sec 220, 221(d)

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FHA Section 220 and 221(d)
Mortgage Insurance for Affordable Housing Projects

New Construction or Rehabilitation

The 220 and 221(d) Programs feature:  high leverage, fixed rate, long-term, self-amortizing, non-recourse, assumable, first lien mortgage debt for the new construction or substantial rehabilitation of affordable housing properties.  These programs are insured by the Federal Housing Administration and provide access to affordable financing for capital needs nationwide.

  • Includes an interest only construction period – rate locked prior to closing
  • No post construction loan to value test
  • No lease up requirements prior to commencement of amortization
  • Financing may be combined with governmental loans or grants
  • FHA insurance, when combined with a Ginnie Mae security, provides AAA credit enhancement for bonds.


Eligible Borrowers:

Single Asset Entity, Multifamily properties of 5 or more units: garden/mid-rise/high-rise
DSC range from 1.11 to 1.20

Loan Term:

Up to 40 years amortization plus construction period

Loan Amount:

For Profit: 83% (market rate), 87% (affordable), 90% (subsidized), including the “as is” value of land

Not for Profit: Up to 95% of costs, including the “as is” value of land

Interest Rate:

Fixed interest rate, subject to market conditions


Qualifies for Ginnie Mae government guaranteed mortgage-backed securities, direct placement or may be used to credit enhance tax-exempt or taxable bonds.


HUD’s processing involves a two-step application progression: pre-application and final application.  Single stage processing is also available in certain situations.

Personal Liability:

None, FHA is non-recourse.


FHA application fee, inspection fee, lender fees and mortgage insurance premiums will be collected.  Various third party reports are required.   All of these costs may be eligible for inclusion in the mortgage note and are reimbursable to client at closing.


  • Commercial space may be permitted with limitations.
  • Client pays for all third party reports which include a market study, full appraisal, engineering report, architectural, a seismic report, if applicable, environmental Surveys, as well as, legal and organizational costs.
  • Surplus cash may be distributed twice per year.
  • Compliance with Davis Bacon wage rates is required for this Program.
  • Annual audit of operations required to be submitted to HUD & lender.
  • Future access  is provided to supplemental loans via FHA 241
  • A post construction certification of actual costs will be required.

This is a general outline of the program requirements.  For complete information and to determine how your property can benefit from this financing opportunity, please contact your Oppenheimer representative at [email protected], or call (215) 631-9151.

icon-pdf OPCO 221d Affordable Housing HUD FINANCING



“Oppenheimer Multifamily Housing & Healthcare Finance, Inc’s funding team is very knowledgeable, experienced, cheerful, and diligent. Combine those and it becomes obvious why our company, time after time, will turn to Oppenheimer for our financing needs - whether simple or complex. Simply put, no one is better.”


Idahlia Renee Snell
Program Development Director
Amigos Del Valle, Inc.