Healthcare facilities

 

Program:
Refinance or Acquisition - Section 232

 

Eligibility:
Property must be at least 3 years old. Mortgagor entity may be either for-profit or not-for-profit. Property must meet State eligibility requirements with regard to licensing and operating standards. For assisted living/board and care facilities, independent living units may not exceed 25%of the total number of residents. No founder’s fees, life care fees or similar charges are permitted.

 
       

Requirements:

Critical repairs must be completed prior to closing. Non-critical repairs must be completed within 12 months of closing. Deposit Account Control Agreement will be required.

 

Escrows:
Full escrows for property taxes, all applicable insurance and any special assessments are funded at closing. A Replacement Reserve account must be established at closing. If the loan includes repairs or capital improvements to be completed after closing, an additional 20% repair escrow must be funded with cash or a letter of credit.

 

Features:
This is a non-recourse loan. Fully assumable subject to CMI and HUD approval. Long loan term - up to 35 years, self-amortizing. Market-driven, no low-income tenancy requirements. Low fixed interest rates, fully amortizing. Loan-to-value ratio – Assisted Living Facility (ALF) up to 75% for a for-profit enterprise inclusive of major moveable equipment, (80%for a not-for-profit). Skilled Nursing Facility (SNF) up to 80% for-profit enterprise inclusive of major moveable equipment (85% for not-for-profit). Renovations and improvements of up to 15%of value may be included in mortgage. Most negative loan covenants typically found in conventional loan agreements are eliminated. Debt Service Coverage of 1.25 to 1.45.

 

Click here to download a PDF of this program.

 
 

Current HUD Programs