Elevate Healthcare Infrastructure with FHA 232 Loans

Interest-only construction loan period precedes a 40-year fully amortizing permanent loan, ensuring financial flexibility during the project's initial phases and long-term stability thereafter.

The financing amount is determined by the most conservative of three factors: 90% of HUD replacement cost, the maximum Loan-to-Value (LTV) ratio, and the Debt Service Coverage Ratio (DSCR) of 1.45x.

Additionally, the specific percentages for Skilled Nursing Facilities/Independent Living Units (SNF/ILU), new construction Assisted Living Facilities/Memory Care (ALF/MC), and sub-rehabilitation ALF/MC vary for for-profit and nonprofit entities.

SNF/ILU has an LTV of 80% for for-profit and 85% for nonprofit.

New construction ALF/MC has an LTV of 75% for for-profit and 80% for nonprofit, while sub-rehab ALF/MC has an LTV of 80% for for-profit and 85% for nonprofit.

Fixed rate for construction and permanent

The financing covers new construction or substantial rehabilitation of assisted living, memory care, intermediate, skilled nursing facilities, or a combination thereof.

The project allows a maximum processing occupancy of 95%.

Commercial space is restricted to not exceed 10% of gross floor area or 15% of gross income.

Additionally, independent living units are limited to 25% of total units (up to 30% with a granted waiver).

Continuing Care Retirement Communities (CCRC) with life-care fees, Long-Term Acute Care (LTAC), adult day services, or entities currently undergoing bankruptcy proceedings.

A singular asset entity, whether for-profit or nonprofit.

Owner, operator, or any affiliated entities currently undergoing bankruptcy proceedings or having filed/emerged from bankruptcy within the last five years.

Owners, operators, or management agents are required to showcase a successful track record aligning with the development or rehabilitation of properties similar in type, size, and complexity.

For owner-operators, a minimum of three years of ownership and operating experience is necessary, and skilled nursing facility (SNF) administrators must also possess three years of relevant experience.

Monthly deposits are mandatory.

The borrower is required to furnish HUD with evidence/documentation from the relevant local/state tax licensing authorities, demonstrating approval for the operation of the project or relevant portions, before project occupancy.

Construction and rehabilitation work adhere to Davis-Bacon labor standards and wage requirements.

Market rate properties incur a 0.77% annual MIP, affordable properties have a 0.45% rate, and there is a 1% upfront MIP due at closing.