Healthcare Loans
FHA Apartment Construction Loans 3.240% – 3.640% Fixed 40 Years Get Confidential Loan Quote ›
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Healthcare Loans

Fixed Rate, Non-Recourse Loans For Hospitals, Nursing Homes, Residential Care Facilities

We place some of the most competitive hospital loans and healthcare facility loans in the nation. We offer the lowest rates for nursing home loans, assisted living facility loans and hospital loans in America, with low fixed interest rates as low as 4.15% fixed for 35 years.

FHA 232 Assisted Living Facility loans are used for new construction or substantial rehabilitation of Skilled Care, Assisted Living, Nursing, Memory Care and Bed & Board facilities. FHA 232 assisted living facility loans are the only 25-year fixed-rate, fully amortizing, 90% LTV, non-recourse assisted living facility loans in existence.

Eligible Uses

Assisted Living Facility Loans, Nursing Home Loans, Intermediate Care Loans, and Board and Care

  1. Must provide continuous protective oversight;
  2. Must offer three meals per day;
  3. Facility must be licensed by state;
  4. Non-resident day care not to exceed 20% of gross area and 20% of gross income; and
  5. May include up to 25% non-licensed independent living units

Maximum Loan Term

25 years – not to exceed 75% of remaining economic life after the construction period

Independent Living

No more than 25% of the units can be for Independent Living

Personal Liability

Non-recourse for monetary default, “bad boy” carve-outs excepted

Eligible Borrowers

For-profit individuals and entities and not-for-profit single asset entities

Prepayment

Typically closed for 3 years then pre-payable year 4 at 107% of par declining 1% per year. Shorter lock-outs are obtainable at a higher note interest rate

Maximum Loan Refinancing

New Construction – The lesser amount of:

  1. 90% of stabilized value (95% for Not-For-Profits).
  2. 90% of mortgageable replacement cost (95% for Not-For-Profits)
  3. Amount debt serviced by 90% of the estimated NOI attributable to realty (95% for Not-For-Profits)
  4. 100% of mortgageable costs less grants, public loans and tax credits
  5. FHA Statutory mortgage limits (FHA statutory loan limits are subject to adjustment based on the location of the project.

Substantial Rehabilitation

  1. 90% of stabilized value (95% for Not-For-Profits)
  2. Amount debt serviced by 90% of estimated NOI attributable to realty (95% for Not-For-Profits)
  3. If owned – 100% of hard and soft costs plus the lesser of (a) existing debt or (b) 90% of existing value
  4. 100% of mortgageable costs less grants, public loans, and tax credits

Interest Rate

Market interest rates change daily. Call for quote.

FHA Application Fee and Inspection Fee

0.3% of the loan amount due at application and .5% of construction loan amount due at closing

Origination Fee

Negotiable

3rd Party Costs

$15,000 to $30,000 depending on size and complexity

MIP

.57% of declining loan amount per annum ( .85% for LIHTC transactions)

Repairs/Replacements

Repairs, deferred maintenance or capital improvements up to of 15% of value or $6,500 per unit plus one major system (adjusted for area) can be included in loan.

Risk-based Maximum Loan Amounts

FHA has established risk thresholds that cannot be exceeded except in exceptional cases –

  1. 75% loan-to-value for new construction assisted living
  2. 80% loan-to-value for new construction Assisted Living Facilities
  3. 1.45 debt service coverage ratio for all projects
  4. Strong not-for-profits are eligible for a 5% LTV increase
  5. Maximum loan-to-cost remains 90% (95% for Not-For-Profits)

Additional Features

  • Certificates of Occupancy dated three years prior to date of application for existing properties (subject to waiver)
  • Pre-review is required by HUD
  • Davis Bacon prevailing wage requirement apply
  • A replacement reserve will be funded at closing
  • Escrows for property taxes, insurance, and replacement reserves are required
  • Annual audit of operations is required
  • Hard second mortgages are not allowed. Soft seconds and stock pledge financing are allowed if properly structured.

Need an Assisted Living Facility loan? Apartment Financing America offers the only fixed-rate, 40 year, non-recourse assisted living facility loans in the nation.