Healthcare

 
ELIGIBLE PROPERTIES

Licensed Nursing Homes, Assisted Living Facilities

Must provide continuous protective oversight

Must offer three meals per day

Facility must be licensed by state

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

Three years must have passed since last certificate of occupancy was issued

COMMERCIAL SPACE

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

RECOURSE

Non-recourse

MINIMUM DSCR AND MAXIMUM LTV

The minimum loan amount is $5 million, with some exceptions for borrowers with more than one loan to be refinanced.35 years fixed rate and fully amortizing loan. There is also an annual Mortgage Insurance Premium of 0.65%

PROFESSIONAL LIABILITY INSURANCE

HUD will require minimum coverage of $1 million per occurrence; $3 million aggregate with a max deductible of $25,000. Waivers may be granted in cases where premiums are high and claim history is clean.

PREPAYMENT AND ASSUMPTION

Generally, for best pricing, it's 10 years of call protection structured as a two-year lockout, followed by a step down from 8%. There's no prepayment penalty if the loan is assumed.

ESCROW

The replacement reserves required in accordance with HUD guidelines will be established by a physical needs report commissioned by our lender partners. An initial deposit will be required at closing, which can be funded by the mortgage proceeds.Taxes and insurance are escrowed monthly.
COSTS

HUD Application Fee - 0.30% of loan amount due with submission of application HUD Inspection Fee - Greater of $30 per unit/bed or 1% of repairs Third Party Reports - Appraisal, Environmental and Capital Needs Assessment
TIMELINE

 - Typical application is submitted within 60 days of engagement; processing time varies based on OCRF (Office of ResidentialCare Facilities) volume.
AUDITED FINANCIALS

 - An annual CPA audit of operation is required.

as of March 4, 2022 rates for healthcare loans were only 2.96% unlike other financing vehicles interest rates on HUD loans for healthcare loans are the same as for apartments