Assisted Living Construction and Major Rehab
FHA-HUD
3.5% fixed
42 years: 2 yr interest only construction loan + 40 yr fully amortizing permanent loan
High 80% to 90% LTC up to 75% ARV
$10 Million to $100 Million+ for strong experienced sponsors
- Nationwide
- No points (our fee built into interest rate)
- No upfront fees underwriting pricing and sizing loans; no application or 3rd party fees (such as appraisals) until borrower signs FHA-Hud, Fannie Mae or Freddie Mac terms sheet
- Rate locks 2 months before funding; can rate lock early by paying a one time, nonrefundable payment of 3 to 6 BPS per month (borrower chooses # of months to rate lock)
- Non-recourse
- Prepayment flexible
- Assumable with FHA-HUD approval
- 660+ credit score
- Cumulative liquidity must cover “cash to close” (combined for all key principals)
- Senior healthcare experience on title required and must own 20% of borrowing entity
- May hire HUD approved general contractor to build project
- Must close in single asset, special purpose LLC, Corporation or Partnership
- Must provide continuous protective oversight, 3 meals/day, state licensed, non-resident care up to 20% of gross area & income, up to 25% non-licensed independent living units and commercial space to 10% of gross floor area & income
- HUD requires Davis Bacon wages
- Escrows: (1) prior to construction: reserves for interest, taxes, insurance, working capital (4% of loan) + initial operating deficit; balances released to borrower after 6 consecutive months of break-even operations; (2) Post construction: taxes, insurance and mortgage insurance premium escrowed monthly & capital needs reserve monthly deposits in accordance per HUD guidelines
- Mortgage insurance premium: 0.77% at closing then annually until principal repaid
- HUD application fee: 0.30% of loan due with submission of final loan application
- Third party reports: appraisal, market study, environmental and review of final construction & architectural docs by FHA-HUD approved reviewer
- 1st lien mortgage
- Closes 12+ months after receive loan docs
- To submit your online loan request, click the blue GET START Link for your PRE APPROVAL Term Sheet within 48 business hours. No credit cards, Social Security Numbers, upfront fees or credit checks are required for PRE-APPROVAL.
