Bedford Lending
HUD programs

HUD 232/223(f) Healthcare acquisition & refinance

Acquire or refinance an established care facility with long-term, fixed-rate healthcare financing.

Program at a glanceDocuments & videosProgram detailsThe process

Program at a glance

Term
Up to 35 years; limited to 75% of remaining economic life.
Interest
Fixed for the loan term.
Value limit (LTV)
Standard 80% for-profit / 85% qualifying nonprofit benchmarks.
Debt coverage (DSCR)
Standard 1.45× benchmark, including mortgage insurance.
Eligible costs / cash-out
Acquisition or eligible refinance debt and costs; no equity cash-out.
Recourse
Nonrecourse, with standard carve-outs.

The lowest applicable sizing result sets the loan amount. Debt coverage compares underwritten income with loan payments, including mortgage insurance.

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Documents & videos

Term SheetOpen PDF
More program documents 1 files

Ownership & closing

Healthcare Development Team Experience

Documentation of borrower, operator and management experience, including facility types, locations and responsibilities.

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Healthcare FAQsAll handoutsAll videos
Program details & considerations

Loan sizing

Maximum loan-to-value (LTV) by facility type
Facility typeFor-profitNonprofit
Existing eligible care facility80%85%

These are HUD’s standard underwriting benchmarks. Mixed care types and nonprofit qualification require review. The standard debt-service coverage benchmark is 1.45×, including mortgage insurance: $1.45 of underwritten income for each $1 of debt service. Proceeds are limited by the lowest applicable calculation.

Acquisition and refinance cost tests also apply. Refinance proceeds are limited to eligible debt and approved costs, with required deductions; this is not an equity cash-out program. The maximum term is also limited to 75% of remaining economic life. Healthcare mortgage insurance follows its own schedule and is separate from the fixed note rate.

HUD healthcare sizing guidance (PDF)

HUD 232/223(f) provides long-term financing to acquire or refinance an eligible operating healthcare facility. We review the property and operator together, including operating history, licensing, capital needs and the proposed ownership structure.

Start with historical and year-to-date operating statements, occupancy, payer mix, licensed beds or units and existing debt terms. For an acquisition, include the proposed purchase price. For a refinance, let us know what you want to accomplish with the new loan.

We'll review the borrower, operator and management agent's relevant experience, along with required repairs and reserves. Loan proceeds depend on several HUD sizing limits, not just appraised value. The healthcare team handout below lists the experience information we typically need.

New construction or substantial rehabilitation should be reviewed under HUD 232. If the facility already has a HUD-insured loan, HUD 232/223(a)(7) may offer a streamlined refinance option.

Acquisitions also face an eligible-cost test, generally 85% for for-profit and 90% for nonprofit borrowers, with adjustments. Refinances are generally limited to eligible debt and approved refinancing costs after required deductions. These tests are separate from the 80%/85% value benchmarks and do not permit general equity cash-out.

Eligible uses & property features

  • Existing eligible healthcare facilities
  • Acquisition and refinancing
  • Eligible improvements and reserves
  • Long-term, fixed-rate financing

What to consider

Eligibility and proceeds are determined through healthcare-specific underwriting. Facility licensing, operating performance, management and any independent living component need review early in the process.

Healthcare experience matters at the ownership level as well as the operator and management level. An experienced manager alone generally does not offset the borrower’s lack of relevant healthcare experience. We review the team’s track record, financial capacity, licensing and care-quality history early.

Eligibility, proceeds, terms and timing depend on the property, underwriting and current HUD requirements. This overview is not a loan commitment.

Loan processing timeline

  1. Pre-qualification & engagement

    Review facility performance, the operator, licensing, existing debt and your acquisition or refinance goals.

  2. LEAN firm application preparation

    Gather owner and operator information, order required reports and underwrite the property and loan.

  3. Firm submission & HUD review

    Submit the application and respond to HUD’s questions about the facility, operator and financing.

  4. Firm commitment

    If approved, review the loan terms, required repairs and other commitment conditions.

  5. Rate lock & closing preparation

    Resolve commitment conditions and coordinate the rate lock, legal documents and any required approvals.

  6. Closing & post-closing repairs

    Fund the transaction and complete any approved post-closing repairs and escrows.

The schedule depends on the project and required reviews.

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