Acquisition and Refinancing of Healthcare Properties

Our FHA/HUD Section 232/223(f) program provides long-term permanent financing for the acquisition or refinance of healthcare properties.

Healthcare Facilities

Eligible Properties

Licensed assisted living, skilled nursing homes, intermediate care, and board and care facilities.

  • Facility must be licensed by the state.
  • Facility must provide three meals per day.
  • Facility must provide continuous protective oversight.
  • Non-resident day care must not exceed 20% of gross area and 20% of gross income.
  • May include up to 25% non-licensed independent living units.

Eligible Borrowers

Experienced for-profit or not-for-profit owners. Single asset, special purpose entity.


Up to 35 years, or 75% of the remaining economic life, but no less than 10 years.

Interest Rate

Locked before closing and fixed for the duration of the term. (Subject to market conditions.)


Non-recourse for the duration of the term.


Customizable, typically a 10-year step down, based on market conditions and borrower preferences.


Subject to FHA/HUD and lender approval.

Loan Parameters

For-Profit 100% 80%* 1.45 .065% (0.45%)
Not-for-Profit 100% 85%* 1.45 .065% (0.45%)

(*For acquisition financing, LTV increase by 5%.)

HUD Fees and Expenses

  • FHA Application Fee of 0.30% of loan amount.
  • FHA Inspection Fee of the greater of $30 per /bed or 1% of repairs.

Commercial Space

Limited to 20% of net rentable area and 20% of effective gross income.

Third-Party Reports

Appraisal, Environmental, Property Capital Needs Assessment (PCNA).


Funds for repairs, deferred maintenance, and capital improvements for generally up to 15% of value can be included in the loan amount, subject to the maximum loan limitations.


Approximately 6-9 months for engagement, submission, FHA/HUD review, and closing. Process may vary due to Office of Residential Care Facilities volume.


Ginnie Mae guaranteed mortgage-backed securities.

Other Program Parameters

  • Escrows for property taxes, insurance, MIP and replacement reserves are required.
  • Cash-Out is not permitted.
  • Facilities financed under this program must be at least 3 years old.
  • Existing debt to be refinanced must be at least two years old unless it was used for an eligible purpose as defined by FHA (refinancing of prior eligible indebtedness, arms-length acquisition, property improvements, operating losses, etc.).
  • A master lease may be required when an owner finances 3 or more properties or $15 million or greater in combined loan amounts with the FHA healthcare programs within an 18-month period.