Wednesday, March 20, 2013

FHA 242 223F Hospital Refinance Open long term fixed low rate financing

Hospital Facility Refinance Loan Program
FHA Section 242/223(f) Commercial Mortgage Insurance
Refinancing for Acute Care Hospitals - Critical Access Hospitals - Less  than 20% Rehab

Summary: No loan limit, many loans above $100,000,000 - Tax-exempt Bond Replacement Credit
Enhancement AA FHA/HUD Government Mortgage InsuranceInsured mortgages guaranteed by the Federal Housing Administration (FHA), in conjunction with the
Department of Health and Human Services (HHS), provides hospitals access to affordable financing for
capital needs. The program application process was modified to include Critical Access Hospitals in
1998. FHA insurance enables qualified acute care facilities to enhance creditworthiness due to backing
by the full faith and credit of the United States Government. July 2009 program modified for straight
Hospital Refinance under FHA 242 Hospital Facility Loan pursuant to FHA 223(f) refinancing rules.Eligible Borrowers:• Single Asset Entity
• For profit or non-profit owners

(A)  Hospitals with an aggregate operating margin of less than 0.33 when calculated from the three most
recent annual audited financial statements are not eligible for Section 242/223(f) insurance.*

(B)  Hospitals with average debt service coverage ratio of less than 1.80* when calculated from the three
most recent annual audited financial statements are not eligible for Section 242/223(f) insurance.*Under Review - Operating Margin, Debt Service Coverage Ratio and Interest Rate Savings, these
rules may be revised or waivers may be offered - Call Us

(C)  HUD may, at its discretion, use its estimate of projected interest rate in lieu of the historical interest
rate(s) in calculating the operating margin and debt service coverage ratios for prior periods.Use new FHA insured loan rate for calculating DSC

(D) The hospital must have experienced an increase in its interest rate of at least since
January 1, 2008, as a result of the credit crisis, or must demonstrate that such an increase is imminent.*Terms:  • Up to 25 YearsLoan Benefits:• Non-recourse  permanent financing.
• Credit enhancement of Tax-Exempt Housing Bonds providing AA rating
• At HUD’s discretion there may be no requirement for involvement of a certified accounting firm
New! This saves time and money for strong owners with good records. FHA 242 - 223(f) only.Eligible Properties:

• Acute care facilities with proper licensing
• Critical access hospitals are allowed to use 25 beds in any mix of acute and skilled level care with
an additional 10 each for psychiatry, and for acute rehabilitation (total 45 beds)

Mortgage Interest Rates: • Fixed for the length of the mortgageMortgage Loan Limitations:
• Maximum loan term of 25 years
• Maximum loan to Value 90% under § 242.7
• Maximum Repairs 20% of Mortgage Amount - none required
• FHA application fees of 0.3% (0.15% paid at closing)
• Fixed annual insurance premium of 0.5% of remaining balance
• 1.80* average debt service coverage ratio based on average of prior three years
• No limit on insurable amount
• Monthly payments into a mortgage reserve fund equal to one year’s debt service after five years’ debt
service after ten years, accessible for debt service after 15 years
• Lender commitment and placement fee determined by size and scope of project
• One-time FHA inspection fee of 0.1%

About Us:

Our knowledgeable team has worked in the mortgage banking/investment banking industry for the past 24 years specializing in healthcare lending, multifamily housing, FHA and FNMA insured loans. Throughout our careers, we have originated and/or underwritten in excess of $745,000,000 in mortgage loans with a focus on acute care hospitals, assisted living facilities, senior housing, and skilled nursing facilities. Previously our team has worked for several NY-based investment banking/mortgage banking firm specializing in conventional and government-assisted loans. Chuck has been president of a FHA mortgage company and a developer. Scott was the VP of Origination for several FHA and FNMA lenders. He has extensive experience working on affordable housing as the Midwest Loan Officer for FNMA Multifamily Affordable Housing Products. We understand that the integrity of the loan officer for the loan quote and rate pricing can make a huge difference for FHA clients.