CONSTRUCTION AND SUB-REHABILITATION FINANCING

OF HEALTHCARE PROPERTIES

FHA Section 232 Mortgage Insurance Program

(401) 525-6544

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Eligible Projects

Skilled nursing, assisted living facilities, intermediate care, board and care home, or a combination of one or more.

Not Eligible

Independent living facilities, treatment centers, halfway houses and projects with entrance fees. 

Requirements 

  • Facility must provide continuous oversight of residents and offer three meals per day.
  • Facility must be licensed by the state in which it is located.
  • No more than 25% of units in a board and care home can be independent living units (units with complete kitchen and bath facilities).
  • Nonresident day care may not exceed 20% of gross floor area and 20% of gross income.
  • Commercial space that does not exclusively serve residents is limited to 10% of gross floor area and 15% of gross income.

Loan Parameters

The maximum loan amount for New Construction is the least of:

  • 90% (95% for non-profits) of appraised value or
  • 90% (95% for non-profits) of the total development cost (which includes furniture, fixtures, major movable equipment, and a $1,500 per bed marketing allowance) or
  • Loan amount that would achieve a debt service coverage ratio of 1.11 to 1.0 (1.05 to 1.0 if Borrower is a non-profit)

The maximum loan amount for Substantial Rehabilitation is the least of:

  • 90% of appraised value based on an improved basis (95% for non-profits),
  • 90% of the cost of rehabilitation, including a construction contingency plus the as-is value of the property (95% for non-profits), or
  • loan amount that would achieve a debt service coverage ratio of 1.11 to 1.0 (1.05 to 1.0 if Borrower is a non-profit)

Note that an equity take out is prohibited under this Section of the National Housing Act

 

 Interest Rate The interest rate is fixed for the term of the loan. Currently 6.50% (7-22-09)

Term and Amortization   Maximum term of 40 years; loan will fully amortize over term.

Recourse      Non-recourse

Assumable  Loan is assumable, subject to HUD approval and payment of an assumption fee and related transaction expenses.


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 Winthrop FinancialSolutions, LLC 
1240 Pawtucket Ave, Rumford, RI 02916

Howard L. Weldon

(Direct) 401-525-6544
 (Fax) 888-679-0773
   hweldon301@msn.com