HUD 232 223(f) Program

Eligible Properties: Assisted Living Facilities, Intermediate Care Facilities, Board and Care and Nursing Homes.

Borrower: A single asset and single purpose entity, either for-profit or non-profit

Highlights:

·       35-year fixed term or up to 75% of building’s economic useful life

·       Non-Recourse loan

·       Assumable

·       Rate Locked for life of Loan

Maximum Loan is the lesser of:

1.       Percentage of Value 80% * (Cashout subject to different rules)

2.       Debt Service Coverage 1.45x (using a maximum 35 year term/ amortization)

3.       100% transaction costs (refinance) and 85% transaction costs (purchase)

Escrows                                            Escrows for taxes, insurance & mortgage insurance premium are required

Replacement Reserves                    Initial and monthly deposits required based on long term physical needs

Secondary Financing                        Available

Professional Liability Insurance      Minimum $1,000,000 / $3,000,000 coverage for operators and managers

Commercial Space                           Permitted up to 20%

HUD Exam Fee                                 $3 per $1,000 of loan amount

HUD Inspection Fee                         1% of estimated cost of repairs or $30 per unit/bed

Rate Lock Deposit                            Typically 0.50% of mortgage amount, refunded at closing

Mortgage Insurance Premium

Firm Application Submitted – will include:

o   Final Appraisal

o   Property Capital Needs Assessment

o   Phase 1 Environmental Assessment

o   Financials and/or credit information on sponsor and management company

o   Three years of complete financials for the project and borrowing entity

o   Past due accounts payable and outstanding liabilities

o   Management Documents

o   Evidence of site control/last arm’s length transaction

o   Legal Documents (organizational docs, title)

o   Rent Rolls