Loan Programs

Healthcare

Construction or Rehabilitation

Our direct HUD 232 program provides 40 year fixed rate, 75-85% LTV, non-recourse financing nationwide for the ground up construction or substantial rehab of:

  • Board and care
  • Memory Care
  • Skilled Nursing 
  • & Assisted Living Facilities. 
  • (An independent living component no greater than 25% of the total units is allowable.)

HUD defines "substantial rehabilitation" as repairs or improvements that exceed 15% of the project's value after completion of all repairs and improvements. Existing properties that need repairs below that threshold can be processed under the more abbreviated HUD 232/223(f) program.

To qualify for HUD financing, facilities must accommodate 20 or more residents and have the ability to monitor resident condition 24 hours a day, 7 days a week, 365 days a year. Additionally facilities must be licensed by the State, municipality, or other body in which the project is located.

Drug rehab, group homes, hospice, dialysis, or medical office buildings are ineligible for HUD financing, however a small component of ancillary office or commercial space can be included in each transaction.

HUD loans can be assumed by investors and retain the original interest rate, making HUD an excellent option for long term investment scenarios or short term holds. Unlike bank financing where a permanent loan is secured after the construction loan, with HUD the construction & permanent note is one and the same, and the interest rate is locked prior to construction, which mitigates all rate volatility in a rising rate environment. Construction interest payments are also capitalized in the mortgage amount.

Typically, the HUD 232 program takes about 6-7 months from start to finish.

Features

  • 40 Year Fixed Rate
  • Ground Up Construction
  • Major Rehabilitation
  • Non-Recourse
  • Assumable
  • Declining Prepayment

Documents