Mortgage Banking
FHA Financing Programs

FHA 232, 223(f) for a 232 Insured Mortgage - New Construction, Substantial Rehab, Acquisition / Refinancing - Healthcare Program - Permanent Financing Programs

PROJECT CRITERIA

Seniors housing for assisted living, including independent living units
Health Care Facilities, including Nursing Homes, Board and Care Homes and Assisted Living Facilities
New Construction, Substantial Rehabilitation (including refinance or purchase of existing facilities), Acquisition and Refinancing of existing facilities which do not require rehabilitation
Davis Bacon labor standards and prevailing wage requirement shall apply to construction and rehabilitation projects but not to Section 223(f) minor repairs
Construction may be started prior to closing with approval by HUD

MORTGAGE TERMS

Fixed rate, level amortization, non recourse, fully assumable, 100% insured by FHA

Term:
New construction / substantial rehabilitation - up to 40 years permanent loan plus construction period
Acquisition and Refinancing of existing facilities - up to 35 years, or 75% of estimated remaining economic life

Loan Structure
New Construction Loan Limited to the lesser of:

o 75% of value (80% for nonprofit borrowers) for assisted living facilities
o 80% of value (85% for nonprofit borrowers) for skilled nursing facilities
o 90% of replacement cost including land value
o Minimum debt service coverage of 1.45


Substantial Rehabilitation Loan limited to the lesser of:

o 80% OF Value (85% for nonprofit borrowers)
o 90% of replacement cost, including land value
o Minimum debt service coverage of 1.45

 

Loan Structure
Purchase Loan limited to the lesser of:

o 85% of the acquisition price plus eligible transaction and rehabilitation costs (90% for nonprofit sponsors)
o 80% of value (85% for nonprofit sponsors)
o Minimum debt service covverage of 1.45

Refinance Loan limited o the lesser of:

o 100% of the outstanding debt plus eligible transaction and rehabilitation costs
o 80% of value (85% for nonprofit sponsors)
o Minimum debt service coverage of 1.45

 

INTEREST RATES

Quoted based upon market
May use tax exempt bonds
May use taxable low interest GNMA Mortgage Backed Securities, or whole loans (pension fund sources)
PREPAYMENT PENALTIES/LOCKOUTS

No yield maintenance requirement
Prepayment lockout, penalties are negotiated between investor and borrower at the time of interest rate lock
FINANCING COSTS

Paid at application:

To FHA - $3.00 per thousand of requested mortgage amount
Paid at closing:

Financing processing/placement fee
Applicable GNMA, or private financing discount fees
MIP (up-front) to FHA:
1/2% per year for construction loans
1 % for refinancing loans 

Inspection Fees to FHA:
1/2 % of mortgage amount (new construction)
1/2 % of rehabilitation costs (rehab)
1% of required repairs 

ANNUAL FEES

MIP to FHA:

0.65%:  232 Healthcare Facility
GNMA guaranty servicing fees:

0.25% to .50% annual GNMA Guarantee Fee/Servicing Fee
CLOSING REQUIREMENTS

Working Capital:

2% letter of credit or cash escrow during construction period
Operating Deficit:

May be required to satisfy achieving stabilized occupancy
THIRD PARTY REPORTS OBTAINED BY LENDERS

Appraisal
Market Analysis
Physical Condition Report and Analysis of  Major Movables (Existing Facilities), or Architectural/Cost Report (New Construction & Sub Rehab)

The information above is subject to change.  The information above is believed to be accurate, however, no warranties are implied or expressed.  Information is available on other FHA programs upon request.