FHA HUD 232 HEALTHCARE CONSTRUCTION LOANS
HUD Rehabilitation and New Construction Loans for Nursing Homes, Assisted Living, Intermediate Care, and Board and Care Properties
HUD Multi-housing Healthcare Loan Amount:
Situation Dependent. See below or call us for details.
HUD Section 232 Construction Rehab Loans for Multi-Housing Healthcare Facilities in Texas
Eligible Properties
Licensed Nursing Homes, Assisted Living, Intermediate Care, and Board and Care
Must provide continuous protective oversight
Must offer three meals per day
Facility must be licensed by state
Non-resident day care not to exceed 20% of gross area and 20% of gross income
May include up to 25% non-licensed independent living units
Commercial Space
Limited to 10% of gross floor area and 15% of gross income
Use of Proceeds
New Construction or Substantial Rehabilitation*.
*Substantial rehabilitation is defined as a) 15% of post-rehabilitated value, or b) replacement of two or more major building components.
Davis Bacon Wages
Payment of prevailing wages required by HUD; Wages determined by Dept of Labor
Borrower
Single asset, special purpose entity, either for profit or non-profit
Recourse
Non-recourse
Interest Rate
Single fixed rate for both construction IO period and permanent loan term, determined by market conditions at time of rate lock. Deposit is 0.5% and refunded at closing.
Loan Parameters
Maximum loan amount will be the least of the applicable limits.
Mortgage Insurance Premium
0.77%* payable at closing, and annually thereafter until principal is repaid.
*Reduction to 0.45% for LIHTC (tax credit) deals.
| Property Type | Maximum Loan to Value² |
Maximum Loan to Eligible Cost¹ | Minimum Debt Service Coverage |
| Assisted Living | 75%² | 90% | 1.45x |
| Other (Skilled Nursing, etc.) | 80% ² | 90% | 1.45x |
1 Cost of offsite improvements, working capital and operating deficit reserve are ineligible.
2 Maximum LTV may be increased by 5% for non-profit borrower entities.
For Substantial Rehabilitation Financing, there will be an additional limitation.
HUD Application Fee
0.30% of estimated loan amount due with submission of application, half of which is refundable if loan is declined by HUD.
Third Party Reports
Appraisal, Environmental and Capital Needs Assessment.
Term and Amortization
Interest-only term equal to actual construction period plus 2 months for cost certification followed by 40 years fully amortizing
Prepayment and Assumption
Negotiable with best pricing for 10 years of call protection (can be a combination of lockout and/or penalty); loan is fully assumable subject to HUD approval.
Escrows
Prior to construction, reserves for interest, taxes, insurance, working capital (4% of the loan), and initial operating deficit; balances will be released to the borrower after 6 consecutive months of break-even operations.
Post construction, taxes, insurance and mortgage insurance premium will be escrowed monthly and a capital needs reserve maintained with monthly deposits in accordance with HUD guidelines on a property-specific basis.
For current HUD Construction and Rehab loan rates, contact our FHA lenders in Texas.
Call For a Quote:
(214) 679-9673
Related Fannie Mae Loan Options
FANNIE GREEN
FANNIE HYBRID ARM
