Calculator
HUD prepayment penalty calculator
Estimates the prepayment premium on a HUD-insured apartment loan in any year, from your note's schedule or a common market schedule, and flags when a 223(f) loan is still inside its five-year statutory prepayment bar.
Estimated prepayment premium
$1,355,4907% of an estimated $19,364,149 balance, in loan year 4.
- Loan year at payoff
- Year 4 (39 months after endorsement)
- Premium rate
- 7%
- Balance at payoff
- $19,364,149
- Payoff including the premium
- $20,719,640
- Inside the 223(f) five-year bar?
- Yes: HUD consent needed
- Schedule used
- 10-9-8-7-6-5-4-3-2-1
PremiumYour payoff yearLockout
Year-by-year table
| Loan year | Premium | Amount |
|---|---|---|
| Year 1 * | 10% | $2,000,000 |
| Year 2 * | 9% | $1,783,514 |
| Year 3 * | 8% | $1,569,826 |
| Year 4 * | 7% | $1,359,217 |
| Year 5 * | 6% | $1,151,988 |
| Year 6 | 5% | $948,469 |
| Year 7 | 4% | $749,014 |
| Year 8 | 3% | $554,008 |
| Year 9 | 2% | $363,865 |
| Year 10 | 1% | $179,034 |
| Year 11 | 0% | $0 |
* Inside the 223(f) five-year statutory bar.
- This is inside the 223(f) five-year statutory bar (year 4 of 5). Prepaying needs HUD's agreement, normally a commitment to keep the property as rental housing for the rest of the five years. A 223(a)(7) refinance is not barred, though the note's premium still applies.
Estimate, not a quote. HUD, the lender and the appraisal decide the real numbers; Janover Capital is an advisor, not a lender, and is not affiliated with HUD or FHA.
Reading the results
Premium is the schedule's percentage for the loan year you pay off in, times the balance then. HUD loans amortize, so the balance is the scheduled one unless you enter the servicer's payoff figure.
Loan year counts from the endorsement month here. Your note may count from its own date or the first payment date, and may step down on specific dates, so check the prepayment rider before you rely on a month near a step.
The 223(f) bar is the only prepayment limit HUD itself imposes on apartment loans: no prepayment in the first five years after endorsement unless HUD agrees. It sits on top of the note's premium; it does not replace it.
The worked example
A $20,000,000 223(f) loan at 5.75% on a 35-year schedule, endorsed June 2024, with a 10-down-to-1 premium. Paying it off in September 2027 lands in year 4 (39 months after endorsement): a 7% premium of $1,355,490 on a $19,364,149 balance, and still inside the five-year bar, so HUD's agreement is needed. Wait until September 2030 and the premium is $746,485 (4%), with the bar behind you.
How the calculator works
- Balance at payoff = the original amount amortized at the note rate for the months since endorsement (level monthly payments).
- Premium = balance × the percentage for that loan year; zero after the schedule ends; none allowed in a lockout year.
- 223(f) flag. Years 1 to 5 are marked as inside the statutory bar (12 U.S.C. 1715n(f); MAP Guide 3.7.10). The exceptions: an agreement with HUD to keep the property rental for the rest of the five years; a bona fide resident cooperative or condo conversion; or HUD findings that rental use is no longer needed or harms the community.
- Other programs. For 221(d)(4), 223(a)(7) and the rest, HUD "permits but does not impose" prepayment restrictions (MAP Guide 3.1.7), so the note alone governs.
Not modeled: yield maintenance or make-whole formulas, partial prepayments, and premiums measured from dates other than endorsement.
Sources
- 12 U.S.C. 1715n (National Housing Act sec. 223)
- HUD MAP Guide, Handbook 4430.G, 2020 edition (effective Mar. 18, 2021)
- HUD, Multifamily FHA insured mortgages, active file
Rules 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 you prepay a HUD 223(f) loan?
Not in the first five years after endorsement unless HUD agrees. The National Housing Act bars it except where the owner agrees with HUD to keep the property as rental housing for the rest of the five years, or HUD makes one of a few other findings (MAP Guide 3.7.10). A 223(a)(7) refinance of the loan is not barred. After year five, only the note's own terms apply.
What is a typical HUD prepayment penalty?
HUD does not set one for most programs; MAP Guide 3.1.7 says HUD permits prepayment restrictions but does not impose them. The premium comes from the Ginnie Mae security or bond the loan funded, and is written into the note. Declining schedules such as 10% in year one falling 1% a year, or a lockout followed by a declining premium, are common. Your note is the only source that counts.
Is the prepayment premium waived when a buyer assumes the loan?
An assumption does not pay off the loan, so no premium is due; the buyer takes over the note and its remaining schedule, subject to HUD approval through the Transfer of Physical Assets process.
Want a real number?
Send the deal to the HUD desk at Janover Capital. A senior advisor sizes it against HUD and agency executions and replies, typically within one business day.
Use "Send these numbers to the desk" above and your inputs and results land in the Deal details box.