Senior apartments
HUD Section 231: construction loans for senior and accessible apartments
Section 231 insures construction or substantial rehab loans for rental apartments built for people 62 and older, with up to 25% of units for people with disabilities. It sizes like 221(d)(4), needs at least 8 units, and covers independent-living apartments only: assisted living and nursing care belong to Section 232. Few developers use it; HUD's file holds only a few dozen active 231 loans.
What Section 231 does
Section 231 insures loans to build or substantially rehabilitate rental housing for elderly persons (62 or older) and persons with disabilities. It is processed under the MAP Guide with the same construction rules as 221(d)(4): Davis-Bacon wages, a working capital escrow, cost certification, assurance of completion and the two-stage HUD review.
Three things differ:
- Occupancy. Everyone in a unit must be 62 or older, except units designed for persons with disabilities, which can be up to 25% of the total. Unit layout and design must suit older and disabled residents.
- Size. At least 8 units, against 5 for every other program.
- Rehab sizing. Substantial rehab loans are sized on a percentage of the “as rehabilitated” value rather than cost, and BSPRA and SPRA allowances are not available for them. New construction can use BSPRA or SPRA if there is no developer fee.
Terms
- Loan to cost and coverage: as 221(d)(4): 87% at 1.15x for market rate, 90% at 1.11x for affordable or 90%-assisted projects. The Middle Income tier is not available.
- Term: construction plus up to 40 years, fixed rate, fully amortizing, non-recourse.
- MIP: 0.25% upfront and a year; it was 70 basis points before October 2025.
- Commercial space: up to 25% of net rentable area and 15% of effective gross income.
Statutory limits
Section 231 has its own per-unit table. For elevator buildings it matches 221(d)(4); for non-elevator buildings it is lower.
| Bedrooms | 231 non-elevator, CY2026 | 231 elevator, CY2026 | 221(d)(4) non-elevator, CY2026 |
|---|---|---|---|
| 0 | $65,032 | $73,889 | $68,401 |
| 1 | $72,702 | $84,706 | $77,649 |
| 2 | $86,818 | $103,004 | $93,859 |
| 3 | $104,483 | $133,252 | $117,808 |
| 4+ | $122,838 | $146,274 | $133,121 |
These bases are multiplied by the area’s high cost percentage (270% standard in 2026). The ROAD to Housing Act set new 231 base amounts equal to the new 221(d)(4) amounts, but HUD has not yet implemented them. See the statutory limits page.
231 against 232 and 221(d)(4)
Section 232 is a different program run by HUD’s Office of Healthcare Programs for nursing homes, assisted living and board and care. If the property provides care to residents, it is a 232 question, not a 231. Mortgagee Letters 2025-03 and 2026-1 expressly exclude 232, and its terms are not covered on this site.
221(d)(4) can finance age-restricted apartments too, if they comply with HUD’s elderly-housing rules. Because the sizing tests are the same and 231’s non-elevator limits are lower, 221(d)(4) will usually produce at least as large a loan; ask your lender which section the HUD regional office expects for your deal.
How often it is used
Rarely. The panel beside this page counts the active 231 loans in HUD’s file: a few dozen nationwide, with only a couple endorsed in the past year. If you are planning senior apartments, compare both sections with your lender before the concept meeting.
Sources
- HUD MAP Guide, Handbook 4430.G, 2020 edition, sections 3.2 and 3.5 (Section 231)
- HUD Mortgagee Letter 2025-03, Multifamily changes in DSCR and LTV/LTC (Jan. 8, 2025)
- HUD Mortgagee Letter 2026-1, Middle Income Housing option for 221(d)(4)
- 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
What is the difference between HUD Section 231 and Section 232?
Section 231 finances apartments for older adults who live independently, under the MAP Guide and HUD's Office of Multifamily Housing. Section 232 finances nursing homes, assisted living and board and care facilities through HUD's Office of Healthcare Programs, under its own handbook and rules. This site covers 231 only.
Do all residents of a Section 231 property have to be 62 or older?
Everyone living in a unit must be 62 or older, except in units designed for persons with disabilities and their families, which can be up to 25% of the units.
Can I build senior apartments with 221(d)(4) instead?
Yes. The MAP Guide says age-restricted apartments may be considered under other sections such as 221(d)(4) if they meet HUD's elderly-housing requirements. Section 231 is the section designed for them, and its statutory per-unit limits match 221(d)(4)'s for elevator units but are lower for non-elevator buildings.
Is the Middle Income option available for Section 231?
No. Mortgagee Letter 2026-1 excludes Section 231, so market-rate 231 deals size at 87% of cost and 1.15x.