Cooperatives
HUD Section 213 and co-op refinancing: FHA loans for housing cooperatives
Section 213 insures the blanket mortgage on a housing cooperative's building, for new construction (213) or substantial rehabilitation (213(i)). It is processed under HUD's traditional track, not MAP. An existing co-op refinances under Section 207 pursuant to 223(f), which the MAP Guide sizes at 65% of the property's rental value with no cash out. The 0.25% MIP applies to both.
Two ways FHA finances co-ops
Housing cooperatives borrow as a corporation: one blanket mortgage on the building, repaid through members’ carrying charges. FHA covers that loan in two ways.
| Section 213 / 213(i) | Section 207 pursuant to 223(f), co-op chapter | |
|---|---|---|
| Purpose | New construction (213) or substantial rehab (213(i)) | Refinance an existing co-op’s mortgage |
| HUD process | TAP (traditional) | MAP |
| Who borrows | The cooperative | Nonprofit co-op corporation or trust (limited-profit entities such as New York’s Mitchell-Lama may be acceptable after HUD counsel review) |
| Loan to value | Set under 24 CFR Part 213 and TAP | 65% of value as a market-rate rental |
| Coverage | Per TAP underwriting | 1.0x on the co-op’s actual NOI |
| Cash out | n/a | Not allowed |
| Statutory limits | Section 213 table | Section 207 table |
The co-op refinance figures come from chapter 17 of the 2020 MAP Guide. Mortgagee Letter 2025-03, which raised the standard 223(f) rental ratios, does not address co-op refinancing.
Refinancing an existing co-op: the main tests
- Fully subscribed before endorsement, with no units still held by the original developer.
- At least 75% of units owned and occupied by members; investors can own no more than 25%.
- Vacancy no higher than 5%, and a healthy turnover; below 5% a year the underwriter has to explain why.
- Share financing available in the market from banks or other lenders, with recent sales in the building cited.
- Carrying charges adequate to maintain the building, with bylaws requiring annual increases where needed. As a rule the new debt service should not raise carrying charges more than 5%.
- A General Operating Reserve, funded monthly as a percentage of carrying charges, on top of the replacement reserve.
- No transient use: occupancy agreements of 30 days or more, no hotel services, no timeshares or rental pools.
- Not substantial rehab: if the repairs cross the substantial rehabilitation threshold, the project should use Section 213(i) instead.
- Term up to 35 years or 75% of remaining economic life.
A co-op already on an FHA loan can also use a 223(a)(7) refinance, which sizes Section 213 co-ops at 95% of NOI (1.05x), more generously than the 90% used for rentals.
Statutory limits
The Section 213 per-unit bases for 2026, before the high cost percentage (270% standard):
| Bedrooms | Non-elevator | Elevator |
|---|---|---|
| 0 | $74,487 | $79,314 |
| 1 | $85,886 | $89,860 |
| 2 | $103,582 | $109,270 |
| 3 | $132,587 | $141,362 |
| 4+ | $147,711 | $155,175 |
The ROAD to Housing Act (July 2026) set new Section 213 base amounts, for example $265,962 for a two-bedroom elevator unit, but HUD has not yet implemented them. See statutory limits.
How often it is used
The panel beside this page counts active Section 213 loans in HUD’s file: a few dozen nationwide, with a handful endorsed in the last year. Co-op financing is concentrated where cooperative ownership is common. If your building is a rental, not a co-op, the standard 223(f) applies.
Sources
- HUD MAP Guide, Handbook 4430.G, 2020 edition, chapter 17 (refinancing cooperative housing) and sections 3.1.8 and 3.2
- 12 U.S.C. 1715e, Section 213 of the National Housing Act
- 24 CFR Part 213, Cooperative housing mortgage insurance
- 90 FR 45789, Changes in Mortgage Insurance Premiums for FHA multifamily programs (Sept. 23, 2025)
- Annual indexing of statutory mortgage limits, CY2026 (91 FR 24597, FR Doc. 2026-08795)
- Public Law 119-101, 21st Century ROAD to Housing Act, section 211
- HUD, Multifamily FHA insured mortgages, active file
Checked against these sources on October 30, 2026. HUD changes program rules by Mortgagee Letter and Federal Register notice; the lender's commitment governs any loan.
Short answers
Can a co-op get an FHA loan to refinance its building?
Yes, under Section 207 pursuant to Section 223(f), following chapter 17 of the MAP Guide. The borrower must be a nonprofit cooperative corporation or trust, the building must be fully subscribed, at least 75% of units must be owner-occupied by members, and the loan cannot return cash to the co-op.
How much can a co-op borrow on a 223(f) refinance?
The MAP Guide caps it at 65% of the property's market value as a market-rate rental, at 1.0x debt coverage on the co-op's own net operating income, and at the Section 207 per-unit limits, along with the cost to refinance. The lowest of those controls.
Is Section 213 processed under MAP?
No. Section 213 construction and 213(i) rehab loans follow HUD's Traditional Application Processing (TAP). The HUD application fee is $3 per $1,000, the same as MAP.
Can a building convert to a co-op with an FHA refinance?
Not under the co-op refinance chapter. Proposed conversions and projects in the middle of converting are ineligible. A co-op that wants the standard rental 223(f) terms would have to dissolve first.