223(f), HUD 232, HUD 232 LEAN & SBA 504 Loans for Senior Housing, Healthcare Financing

SBA 504 & HUD Loans for Assisted Living Facilities, Senior Care, Skilled Nursing, Retirement & Nursing Homes, Memory Care, Adult Day Care and Independent Living*

HUD insured mortgages can be used for the refinance or acquisition of existing licensed Senior Care and Special Use facilities including:

Assisted Living Facilities
Board and Care Homes
Nursing Homes
Alzheimer's Facilities
Disability Care

*Limited Independent Living units may be allowed subject to conditions

"A Minus" SBA 504 Assisted Living Facility Financing - New Program

We have a new program for refinances and acquisitions for owners who have returned to profitability after a few bad years. Please click here for more info: SBA 504 A Minus Loan.

HUD 232 Acquisition and 223(f) for Refinancing current HUD loans:

Up to 35 year loan term and amortization
Lowest possible interest rates for ALF financing
Loan is Non Recourse
Loan is Fully Assumable
Interest rate is fixed for length and term of loan - NO balloon
Ownership may be for profit or non profit
Prepayment penalty typically 2 to 3 year lockout and declining penalty through Year 10
No CASH OUT and existing debt must be seasoned 2 years

Maximum FHA insured mortgage limited to the lesser of:

a mortgage supported by a 1.45 debt service coverage ratio
80% of appraised value for "for profit" entities
85% of appraised value for "non-profit" entities
100% of existing debt including loan costs, repairs and replacement reserves

HUD 232 Construction Loans:

Construction financing is very difficult in the current lending environment and only possible for extremely strong projects.

Interest only through construction period
40 year loan term and amortization
Interest rate fixed for term of loan
No maximum loan amount
Loan to hard and soft costs is 90%
Loan is non-recourse, even through construction
Loan is assumable
Prepayment is normally: Closed for 5 years, then 5% first year declining 1% per year to par
Fees to Lender are normally ½% to 1% of loan amount
Ownership may be for profit or non profit

HUD 232 and 223f Costs

Please note that both the HUD 232 and 223(f) programs have significant upfront costs although most can be financed into the loan. Here is sampling of typical fees:

Appraisal: $6 - 8,000
Environmental: approx $5,000
Engineering Report: approx $3,500
MAPS underwriting: approx $7,500
HUD fee: 3/10ths of 1 percent

MAPS stands for Multifamily Accelerated Processor Services and they are underwriters designated by HUD for healthcare underwriting.

SBA Assisted Living Facility Financing

The SBA 504 program is well suited for Assisted Living Facility financing or refinancing.*

Construction is very difficult in the current market - especially for a start up. Those with a track record of owning and managing ALF's and who have good outside or global cash flow should have options. Expansion of an existing facility is easier than new construction.

*Refinances are available through September 2012. Please visit our 504 refinance page for up to date information.

Higher Total Project Costs with the SBA Green 504

The HUD programs can handle much larger projects than an SBA loan, but recent changes to the 504 loan program allow larger loan amounts than ever before through the 504 program. 504 loans are now available for projects upwards of $12,000,000 (especially if you go green).

To qualify for maximum financing you must produce enough of your own energy to significantly impact your energy usage and costs. This new version of the 504 - the green 504 loan - is an excellent tool for anyone looking to finance a senior care facility with long term, attractive commercial financing.

By going green you will be helping the environment and possibly significantly lowering your long term energy and operating costs and you will be doing it with the least possible out of pocket expense.

Commercial Financing with 15 to 20% Down

The 504 requires 15 to 20% down at a time when most banks and lenders are looking for 30% or more down. The amount of down payment is dependent on your level of experience in the senior housing industry.

The program is ideal for smaller, locally owned senior housing facilities, since it requires that the owner be "hands on."

Conventional Financing for Assisted Living and Senior Housing Developments

Obtaining SBA, USDA - and especially HUD - financing is currently a long, cumbersome process and much quicker conventional financing is available for strong projects. We have access to capital sources who may be able help fund your project much quicker and possibly without recourse/personal guarantees.

Equity And Consulting

We have sources who can provide equity, debt and consulting for those in the earlier stages of a project.

Financing for Non-Profit / 501(c)(3) Organizations

We also have reliable, experienced sources for non-profit - 501(c)(3) - organizations building or financing facilities as well.

Please contact us at 1-800-414-5285 for more information.

More SBA 504 Loan info: 504 Loans