Construction or Substantial Rehabilitation of Healthcare Properties
Licensed Nursing Homes, Assisted Living, Intermediate Care and Board & Care
FHA/HUD Section 232
- 2.75% to 4.5% Fixed
- Term & amortization: interest only during construction period + 2 months followed by 40 years fully amortizing
- $3 to $100 Million+
- Nationwide
- No upfront fees. We are paid when your loan is funded at closing.
- High LTV & LTC: Assisted Living: 75% (for profit) or 80% (for non-profit) LTV, 90% LTC & 1.45X debt service coverage
- Other (Skilled Nursing etc.) 80% (for profit) or 85% (for non-profit) LTV, 90% LTC & 1.45X debt service coverage
- For Substantial Rehab financing: finance lesser of !00% of rehab plus 90% of as is property value OR 100% of existing indebtedness if property owned or 85% of eligible acquistion cost for acquistions
- 0.5% rate lock deposit refunded at closing
- Non-recourse
- Low fees and points
- Prepayment and assumption negotiable
- 700+ Credit
- Strong borrower/sponsor liquidity, net worth, financials and experience required
- Single asset, special purpose entity, either for profit or non-profit required
- Eligible properties must: provide continuous protective oversight, offer 3 meals per day, state licensed, non-resident care not to exceed 20% of gross area & gross income, may include up to 25% non-licensed independent living units and commercial space up to 10% of gross floor area & income
- Construction or rehab defined as 15% of post-rehabilitated value or replacement of 2+ major building components
- Davis Bacon wages required by HUD and determined by Department of Labor
- Escrows: (1) prior to construction, reserves for interest, taxes, insurance, working capital (4% of loan) and initial operating deficit; balances released to borrower 6 months after 6 consecutive months of break-even operations; (2) Post construction: taxes, insurance and mortgage insurance premium escrowed monthly and a capital needs reserve maintained with monthly deposits in accordance with HUD guidelines
- Mortgage insurance premium: 0.77% payable at closing and annually until principal repaid (0.45% for tax credit deals)
- HUD application fee: 0.30% of estimated loan amount due with submission of final application
- Third party reports: appraisal, market study, environmental & review of final construction and architectural docs by HUD approved reviewer
- Timeline: typically 12 months from due dilligence to closing
- Please click blue Construction and Rehab of Healthcare Property Link for FREE PRE APPROVAL LOI within 24 business hours. With a few clicks of your mouse it TAKES LESS THAN 3 MINUTES TO GET STARTED NOW. No credit cards, Social Security Numbers or credit checks required
