Program helps hospitals access capital, stimulate economy
The Federal Housing Administration’s Section 242 Mortgage Insurance Program offers a “ray of sunshine” for hospitals looking to address their financing needs for construction projects, an FHA official told hospital leaders April 27 at the American Hospital Association annual meeting. “But for Section 242 many hospitals wouldn’t exist in small rural communities,” said Roger Miller, who heads the FHA program for the U.S. Department of Housing and Urban Development.
This month, the program completed its largest single transaction in history, insuring a $756 million hospital mortgage that will save Capital Health of Trenton, NJ, an estimated $538 million in interest over the 25-year life of the loan. Miller noted that every $1 billion in FHA-financed construction produces $2.8 billion in economic stimulation, because hospitals “are economic engines that create jobs and stimulate the economy.”
AHA has proposed strengthening and streamlining the HUD 242 program by increasing program funding, and providing additional financial resources to hospitals so they may qualify for the program.
