Nursing Homes & Assisted Living - Refinance & Acquisition
HUD Section 232 Mortgage Insurance Programs

(http://www.rockportmortgage.com:80//print/termsheets/nursing/232.php)

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 Fees
0.3% of the loan amount.
Mortgage Insurance Premiums
1% for the first year and 0.57% of the outstanding loan amount thereafter.
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.
  • Lean Program reduced time to close to 30 days after submission of complete application.