FHA
242 for a 242 Insured Mortgage
PROJECT CRITERIA
- Hospital and critical access
hospitals
- New construction, substantial
rehabilitation, modernization, remodeling, equipment and expansions,
or refinances that involve accessing at least 20% in new money
proceeds
- Davis Bacon labor standards and
prevailing wage requirement shall apply to construction and
rehabilitation projects
MORTGAGE TERMS
- Fixed rate, level amortization,
non recourse, fully assumable, 100% insured by FHA
- Term:
- New construction /
substantial rehabilitation - up to 25 years permanent loan
plus construction period
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LOAN TO VALUE
New Construction/Substantial
Rehabilitation
- 90% LTV
- Debt service coverage ratio:
1.25 minimum
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
Processing Fees paid to FHA:
- 0.50% of mortgage amount -
inspection fee
- 0.15% of mortgage amount -
application fee
- 0.15% of mortgage amount -
commitment fee
ANNUAL FEES
MIP to FHA:
- 0.50% per year for permanent loan
GNMA guaranty servicing fees:
- 0.25% to .50% annual
GNMA
Guarantee Fee/Servicing Fee
CLOSING REQUIREMENTS
Mortgage Reserve Fund:
- The borrower will agree to make
monthly payments into a mortgage reserve fund which will build to
one year of debt service after five years and two years of debt
service after ten years.
Certificate of Need
- A certificate of need is required
if the borrower is in a certificate of need state.
THIRD PARTY REPORTS OBTAINED BY
LENDERS
- Appraisal
- Market Analysis
- Feasibility Study
- Environmental Study
- Lender's due diligence
- Survey
- Other
Information is available
on other FHA programs upon request.
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