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HUD/FHA

HUD/FHA 232

New Construction or Substantial Rehabilitation of Healthcare/Seniors Housing Facilities
PURPOSE

New construction or substantial rehabilitation of Nursing homes, Assisted Living, Intermediate Care,
and Board & Care facilities.

COMMERCIAL SPACE

Eligible for up to 10% total square footage and 15% EGI. Adult day care space is included in limitation.

SUBSTANTIAL REHABILITATION

Qualifies as sub-rehab by meeting the following criteria:

  • the cost of repairs, replacements and improvements exceeds 15% of the as completed value; or
  • two or more major building components are being substantially replaced.
BORROWER

Single asset, special purpose entity. Either for-profit or nonprofit.

MAXIMUM LOAN AMOUNT

The lesser of:

  • 80% of stabilized value for Nursing Homes (75% for assisted living);
  • 90% of replacement cost; and
  • 1.45 DSCR.

* Non-profits can typically add 5% to stated percentages if they agree to the non-profit restrictions.
** Other than the above constraints, there are no minimum or maximum loan sizes.

TERM & AMORTIZATION

Interest only during the construction period, plus 40 years fully amortizing.

INTEREST RATE

Fixed-rate, subject to market conditions at the time of rate lock.

MORTGAGE INSURANCE PREMIUM

1.0% payable at closing, 0.65% annually thereafter;
0.45% for qualifying LIHTC projects; and
0.25% for qualifying Green projects.

RECOURSE

Non-recourse during both construction and permanent phases of financing.

ASSUMABILITY

Fully assumable, subject to HUD approval.

PREPAYMENT

Negotiable. Best rates typically have a 1–2-year lockout with a declining prepayment penalty for
the remainder of the first 10 years.

THIRD PARTY REPORTS

Market Study, Appraisal, Architectural and Costs Review and Environmental. Other reports as needed.

ESCROWS

Escrows for debt service, mortgage insurance premium, taxes, insurance, replacement reserves,
working capital, operating deficit and minor moveables are required.

FEDERAL LABOR STANDARDS

Davis-Bacon prevailing wages and reporting requirements.

ASSURANCE OF COMPLETION

Payment and performance bond or cash deposit/letter of credit.

HUD APPLICATION FEE

$3 per $1,000 of requested loan amount.

HUD INSPECTION FEE

$5 per $1,000 of requested loan amount for new construction; or
$5 per $1,000 of improvement costs for substantial rehabilitation.

 

This sheet sets out the general guidelines of a loan program and is designed solely as an aid to prospective borrowers and other clients. It does not represent or imply a contract or a commitment to lend funds. A commitment to lend funds may only be made by a written letter issued by NewPoint to a prospective borrower. This term sheet is subject to change at any time without notice at the sole discretion of NewPoint Real Estate Capital LLC.