Healthcare Property Loans
Looking for a loan to purchase, develop, refinance, or substantially rehabilitate a residential healthcare facility?
Uptown Funding assists for-profit and non-profit clients through the process of obtaining FHA/HUD Section 232/223(f) financing, which can be used for a single project or a combination, such as refinancing of a nursing home coupled with new construction of an assisted living facility.
Eligible Properties
Licensed Nursing Homes, Assisted Living, Intermediate Care, and Board and Care
- Must provide continuous protective oversight
- Must offer three meals per day
- Facility must be licensed by state
- Non-resident day care not to exceed 20% of gross area and 20% of gross income
- May include up to 25% non-licensed independent living units
- Three years must have passed since last certificate of occupancy was issued
Contact Us
Uptown Funding
5215 N O'Connor Blvd.
Suite 1100,
Irving, TX 75039
Fax: 214-305-6954
Commercial Space
Limited to 20% of net rentable area and 20% of effective gross income
Borrower
Single asset, special purpose entity, either for profit or non-profit
Loan Amount
Minimum Loan Size $5,000,000, No maximum (Limited by loan parameters and HUD does not allow for any equity take out for healthcare properties)
Recourse
Non-recourse
Interest Rate
Fixed for term of loan, determined by market conditions at time of rate lock (Rate lock deposit is 1% and refunded at closing)
Loan Parameters
Maximum loan amount will be the least of:
- Recommended % of LTV
- Recommended % of Purchase Price for loans that finance acquisition
- Recommended Debt Service Coverage Ratio, or
- Existing debt plus transaction costs and proposed repairs
Based on current economic and fiscal environment, HUD has recommended the following parameters:
- For Profit Mortgagors: 80% LTV, 1.45 DSCR
- For Non-Profit Mortgagors: 85% LTV, 1.45 DSCR
Term and Amortization
A maximum term of 35 years or 75% of the remaining economic life, fully amortizing
Prepayment and Assumption
Negotiable with best pricing for 10 years of call protection (can be a combination of lockout and/or penalty); Loan is fully assumable subject to HUD approval
Escrows
- Taxes and insurance are escrowed monthly
- Replacement reserve required and the monthly deposit amount determined in accordance with HUD guidelines
Professional Liability Insurance
HUD will require minimum coverage of $1 million per occurrence; $3 million aggregate with a max deductible of $25,000; Waivers may be granted in cases where premiums are high and claim history is clean
Mortgage Insurance Premium
1% due to HUD at closing and 0.65% annually thereafter, escrowed monthly
HUD Application Fee
30 basis points ($3 per $1,000) on requested loan amount (due with submission of firm application to HUD)
HUD Inspection Fee
Greater of $30 per unit/bed or 1% of repairs
Third Party Reports
Appraisal, Phase I and Physical Needs Assessment are required
Timeline
Typical firm application is submitted within 60 days of engagement; LEAN processing time varies based on OHP (Office of Healthcare Programs) volume