FHA Mortgage Insurance Section 232/223(F)

Acquisition and Refinancing of Healthcare Properties

FHA Mortgage Insurance Section 232/223(F)

ELIGIBLE PROPERTIES

Nursing homes, board and care homes, assisted living and intermediate care facilities that are licensed by state, provide continuous protective oversight and offer three meals daily with a minimum of 20 beds; 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

INTEREST RATE

Fixed-rate for term of loan; determined by market conditions at time of rate lock

BORROWER

For-profit or not-for-profit single asset or special purpose entity; must have owned/operated facilities for five years or more

PERSONAL LIABILITY

Non-recourse subject to standard carve-outs

TERM & AMORTIZATION

Maximum term of 35 years or 75% of the remaining economic life and fully amortizing

MAXIMUM LOAN PARAMETERS

Borrower Type	Maximum Loan to Value	Minimum Debt Service Coverage	Maximum Loan to Refinance Cost	Maximum Loan to Acquisition Cost
For-Profit	80%	1.45x	100%	80%
Not-For-Profit	90%	1.45x	100%	90%

COMMERCIAL SPACE

Limited to 20% of net rentable area and 20% of effective gross income

PREPAYMENT AND ASSUMPTION

Flexible – best execution typically has a combination of lockout and prepayment penalty for 10 years; fully assumable subject to HUD approval

MORTGAGE INSURANCE PREMIUM

1.0% due at closing to HUD and .65% annually; .45% for qualifying LIHTC projects

PROFESSION LIABILITY INSURANCE

HUD requires minimum coverage of $1MM per occurrence; $3MM aggregate with a maximum deductible of $25,000; waivers may be granted in cases where premiums are high and there is no claim history

FEES

HUD Application: .30% of requested loan amount; .20% for properties located in a qualified Opportunity Zone
HUD Inspection Fee: Greater of $30 per unit/bed or 1.0% of repairs
HUD Inspection: .50% for new construction or improvement costs for substantial rehab