Bedford Lending
HUD programs

HUD 220 Urban revitalization construction & rehab

A HUD financing option for rental housing in qualifying areas with designated revitalization activity.

Program at a glanceDocuments & videosProgram detailsThe process

Program at a glance

Term
Up to 40 years, fully amortizing; economic-life limits apply.
Interest
Fixed for the loan term.
Loan structure
Construction and permanent financing in one loan.
Cost benchmark
Up to 87%; 90% for qualifying affordable or rental-assisted properties.
Debt coverage (DSCR)
At least 1.15×; 1.11× for qualifying categories, including MIP.
Per-unit limit
Statutory mortgage limits can further restrict the loan amount.
Recourse
Nonrecourse; completion obligations apply.
Annual MIP
0.25% under the current multifamily schedule.

The lowest applicable sizing result sets the loan amount. Debt coverage compares underwritten income with loan payments, including mortgage insurance.

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Documents & videos

Program GuideOpen PDF
All handoutsAll videos
Program details & considerations

Section 220 can finance new construction or rehabilitation in eligible revitalization areas. Location eligibility is an early part of the review; an urban address alone does not establish eligibility.

Send us the site address, proposed development plan and supporting local revitalization documents. We can compare Section 220 with Section 221(d)(4) and confirm the appropriate HUD application route.

MAP links this program’s loan ratios to Section 221(d)(4). Read together with Mortgagee Letter 2025-03, the general benchmarks are up to 87% with at least 1.15× debt coverage for market-rate housing, or up to 90% with at least 1.11× coverage for qualifying LIHTC properties with a rent advantage and properties with rental assistance on at least 90% of units. The lowest applicable sizing test controls the loan amount. The separate middle-income option under Mortgagee Letter 2026-01 is limited to Section 221(d)(4).

The percentage applies to HUD replacement cost, with statutory per-unit and debt-service tests also limiting proceeds. Eligible commercial uses may occupy up to 25% of net rentable area and provide up to 30% of effective gross income. HUD must accept the location under Section 220; an urban address alone is insufficient.

Eligible uses & property features

  • Qualifying revitalization areas
  • New construction and rehabilitation
  • Location eligibility reviewed early

What to consider

The project must meet the program’s location and underwriting requirements. Confirm the site designation, development scope and commercial uses early. Age-restricted senior housing is not eligible under Section 220.

Eligibility, proceeds, terms and timing depend on the property, underwriting and current HUD requirements. This overview is not a loan commitment.

Loan processing timeline

  1. Pre-qualification & concept meeting

    Review rents, expenses, construction costs and the site. After engagement, we prepare a project narrative and meet with HUD to discuss the proposed financing.

  2. Pre-app preparation

    Order the appraisal, market study where required and environmental report. Gather preliminary plans while we assemble the pre-application package.

  3. Pre-app submission & HUD review

    Submit our underwriting and exhibits to HUD. Resolve comments and obtain an invitation to proceed to firm application, if approved.

  4. Firm application preparation

    Complete plan and cost reviews, construction pricing, borrower and contractor financial review, survey and title work. Update reports as needed.

  5. Firm submission & HUD commitment

    Submit the firm application and address HUD’s comments. If approved, HUD issues a firm commitment with conditions to satisfy before closing.

  6. Rate lock & initial closing

    Coordinate the rate lock and initial closing. Construction advances, completion, cost certification and final endorsement follow.

The schedule depends on the project and required reviews.

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