PROJECT CRITERIA

• Seniors housing for assisted living, including independent living units
• Health Care Facilities, including Nursing Homes, Board and Care Homes and Assisted Living Facilities
• New Construction, Substantial Rehabilitation (including refinance or purchase of existing facilities), Acquisition and Refinancing of existing facilities which do not require rehabilitation
• Davis Bacon labor standards and prevailing wage requirement shall apply to construction and rehabilitation projects but not to Section 223(f) minor repairs
• Construction may be started prior to closing with approval by HUD

MORTGAGE TERMS

• Fixed rate, level amortization, non recourse, fully assumable, 100% insured by FHA
• Term:
   

  New construction / substantial rehabilitation - up to 40 years permanent loan plus construction period Acquisition and Refinancing of existing facilities - up to 35 years, or 75% of estimated remaining economic life

LOAN TO VALUE

New Construction/Substantial Rehabilitation

• 90% loan to replacement cost that includes land value, or cost to payoff existing indebtedness (rehab) (as is value)
• 90% of available net income capitalized by debt rate constant (plus MIP)

Existing Projects

• The lesser of 85% of available net income or 85% of value

INTEREST RATES

• Quoted based upon market
• May use tax exempt bonds
• May use taxable low interest GNMA Mortgage Backed Securities, or whole loans (pension fund sources)

PREPAYMENT PENALTIES/LOCKOUTS

• No yield maintenance requirement
• Prepayment lockout, penalties are negotiated between investor and borrower at the time of interest rate lock

FINANCING COSTS

Paid at application:

• To FHA - $3.00 per thousand of requested mortgage amount

Paid at closing:

• Financing processing/placement fee
• Applicable GNMA, or private financing discount fees

MIP (up-front) to FHA:

• 1/2% per year for construction loans
• 1 % for refinancing loans

Inspection Fees to FHA:

• 1/2 % of mortgage amount (new construction)
• 1/2 % of rehabilitation costs (rehab)
• 1% of required repairs

ANNUAL FEES

MIP to FHA:

• 0.57%:  232 Healthcare Facility

GNMA guaranty servicing fees:

• 0.25% to .50% annual GNMA Guarantee Fee/Servicing Fee

CLOSING REQUIREMENTS

Working Capital:

• 2% letter of credit or cash escrow during construction period

Operating Deficit:

• May be required to satisfy achieving stabilized occupancy

THIRD PARTY REPORTS OBTAINED BY LENDERS

• Appraisal
• Market Analysis
• Physical Condition Report and Analysis of  Major Movables (Existing Facilities), or Architectural/Cost Report (New Construction & Sub Rehab)

Information is available on other FHA programs upon request.