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Purpose Provides mortgage insurance for the construction or rehabilitation of skilled nursing, intermediate care, board and care, and assisted living facilities.
 
Eligible Borrowers Profit motivated, non-profit motivated and public owners are eligible.
 
Maximum Term 40 years plus a construction period.
 
Maximum Loan New Construction
the lesser of:
  1. 90% of FHA's value (95% for private non-profits) or 90% of Replacement Cost, whichever is less.
  2. Amount of debt serviced by 90% of the estimated NOI (95% for non-profits)
Substantial Rehabilitation
the lesser of:
  1. 90% of FHA's value (95% for private non-profits) or 90% of Replacement Cost, whichever is less.
  2. Amount of debt serviced by 90% of the estimated NOI (95% for non-profits).
  3. IF OWNED-100% of hard and soft costs plus the lesser of existing debt or 90% of existing value (95% for non-profits).
  4. TO BE ACQUIRED-90% of hard and soft costs (95% for non-profits) plus 90% of the lesser of purchase price or existing value (95% for non-profits).
 
Personal Liability None
 
Prepayment Negotiable
 
FHA Application Process 0.3% of the loan amount.
 
Mortgage Insurance Premium 0.57% of the outstanding loan amount.
 
FHA Inspection Fees
  1. 0.5% of loan amount (new construction)*
  2. 0.5% of costs associated with construction (sub rehab)*
 
Funding Qualifies for government insured mortgage-backed securities or direct placement or may be used to credit-enhance tax-exempt bonds.
 
Interest Rate Subject to market conditions.
 
Territory Nationwide
 
Additional Program Parameters: * The FHA Section 232 mortgage insurance program is one of the most attractive credit enhancement programs available for taxable and tax-exempt financing of new construction and rehabilitation of nursing homes, intermediate care facilities, assisted living, facilities, and broad and care (personal care) facilities.

* FHA is the only 40-year, fixed rate, level amortization, and non-recourse health care facility finance program in existence.

* FHA is the only 40-year, fixed rate, level amortization, and non recourse funding in the market.

HUD Healthcare Facilities
Property
Loan Amount
St. Thomas More
 (Hyattsville, MD)
$37,123,600
Suffield by the River
 (Suffield, CT)
$8,505,300
Bala Nursing & Retirement Center
 (Philadelphia, PA)
$12,626,400
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