Nursing Homes/Assisted Living
New Construction |
| Rockport Mortgage Corporation is an FHA-approved Mortgagee and actively provides financing utilizing the FHA insurance programs nationwide.
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| HUD 232 | Non-Profit | For Profit |
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| Purpose | Provides mortgage insurance for the construction or rehabilitation of assisted living facilities. (Facilities currently financed with FHA insured mortgages are eligible for streamlined refinancing through the FHA 223(a) 7 Program. Additions to facilities financed with FHA insured mortgages also can be financed on an expeditious basis employing the 241 Program). |
| Eligible Borrowers | Profit and Non-Profit motivated and public owners are eligible. |
| Maximum Term | 40 years plus a construction period. | 40 years plus a construction period. |
| Maximum Loan | New Construction: The lesser of:
1) 95% of FHA's value
2) Amount of debt serviced by 95% of the estimated NOI attributed to realty
Substantial Rehabilitation
the lesser of:
1) 95% of FHA's value
2) Amount of debt serviced by 95% of the estimated NOI attributable to realty
3) If Owned - 95% of hard and soft costs plus the lesser of existing debt or 95% of existing value. To be acquired - 95% of hard and soft costs plus 95% of the lesser of purchase price or existing value. | New Construction: The lesser of:
1) 90% of FHA's value
2) Amount of debt serviced by 90% of the estimated NOI attributed to realty
Substantial Rehabilitation
the lesser of:
1) 90% of FHA's value
2) Amount of debt serviced by 90% of the estimated NOI attributable to realty
3) If Owned - 100% of hard and soft costs plus the lesser of existing debt or 90% of existing value. To be acquired - 90% of hard and soft costs plus 90% of the lesser of purchase price or existing value. |
| Personal Liability | None | None |
| Prepayment | Typically closed for five years then open to prepayment at 5% prepayment fee in year six, declining 1% per year. | Typically closed for five years then open to prepayment at 5% prepayment fee in year six, declining 1% per year. |
| FHA Application
Fees | 0.3% of the loan amount. | 0.3% of the loan amount. |
| Mortgage Insurance
Premium | .5% per year | 5% per year |
| FHA Inspection Fees | 0.5% of loan amount
(new construction)
0.5% of costs associated with construction (sub rehab) | 0.5% of loan amount
(new construction)
0.5% of costs associated with construction (sub rehab) |
| Finance Fee | Negotiable; 1.5% - 2.5% typical | Negotiable; 1.5% - 2.5% typical |
| Secondary
Financing | Surplus cash notes are permitted. | Surplus cash notes are permitted |
| Funding | Qualifies for government insured mortgage-backed securities or direct
Placement or may be used to credit-enhance tax-exempt bonds. | Qualifies for government insured mortgage-backed securities or direct Placement or may be used to credit-enhance tax-exempt bonds. |
| Interest Rate | Approximately 175-200 basis points over 10-Year Treasury, but subject to market conditions. | Approximately 175-200 basis points over 10-Year Treasury, but subject to market conditions. |
| Territory | Nationwide | Nationwide |
| Additional
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. |
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