HEALTHCARE PROPERTIES | FHA/HUD Section 232
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.
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.
Experienced, single asset, for-profit or not-for-profit owners.
Up to 40 years, fully amortizing (plus interest only period during construction).
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.
|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).
Limited to 10% of net rentable space and 15% of gross income.
Market Study, Appraisal, Phase I Environmental, and Architectural & Cost Review.
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.