New Construction or Substantial Rehabilitation Loan

Our HUD Section 232 mortgage program provides long-term, low fixed-rate, non-recourse, assumable financing for the construction and permanent financing 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, single asset, for-profit or not-for-profit owners.


Up to 40 years, fully amortizing (plus interest only period during construction).

Interest Rate

Locked before closing and fixed for the duration of the construction period and full 40-year term. (Subject to market conditions.)


Non-recourse for the construction period and 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

Assisted Living 90% 75% (80%) 1.45 .077% (0.45%)
Skilled Nursing 90% 80% (85%) 1.45 .077% (0.45%)

HUD Fees and Expenses

  • FHA Application Fee of 0.30% of loan amount.
  • FHA Inspection Fee of 0.50% of loan amount (new construction) and 0.50% of costs associated with construction (substantial rehabilitation).

Commercial Space

Limited to 10% of net rentable space and 15% of gross income.

Third-Party Reports

Market Study, Appraisal, Phase I Environmental, and Architectural & Cost Review.

Construction Wages

Local prevailing wages, as per Department of Labor, paid under Davis-Bacon Act.


Approximately 8 – 10 months for engagement, submission, FHA/HUD review, and closing.


Ginnie Mae guaranteed mortgage-backed securities.

Other Program Parameters

Escrows for property taxes, insurance, MIP, working capital, and replacement reserves are required.