FHA - 232/223(f) - Refinance or Purchase of Skilled Nursing and Assisted Living Facilities ELIGIBLE PROPERTIES: Skilled nursing assisted living, intermediate care and board and care facilities, or any combination thereof which are at least 3 years old from the date of initial occupancy. Moderate rehabilitation is permitted. LOAN TYPE: Permanent loan. MAXIMUM LOAN: The lesser of the following criteria: 1. 75% to 83% of HUD appraised value; *75% Assisted Living 2. 1.35 debt service coverage. *1.45 Assisted Living Refinance Transaction: 1. The existing indebtedness plus transaction costs. NO CASH OUT Purchase Transaction: 1. 75% to 83% of the cost of acquisition. INTEREST RATES: Fixed rate determined by market rates at the time of rate lock. AMORTIZATION: Up to 35-year, fully amortizing loan. PERSONAL RECOURSE: Non-recourse. ASSUMABILITY: Assumable, subject to approval. SUBORDINATE FINANCING: Allowable, subject to HUD criteria. PROFESSIONAL AND GENERAL LIABILITY INSURANCE: Required. ANNUAL MORTGAGE INSURANCE PREMIUM: 1.0% of the mortgage amount is payable at closing. Thereafter, the MIP is escrowed monthly based on a rate established by HUD. The rate is fixed at loan endorsement. ESCROWS: Monthly escrows for property insurance, real estate taxes, reserves for replacement, sinking fund (if applicable) and mortgage insurance premiums. An initial deposit to replacement reserve and 100% of repair costs (both as determined by HUD) are escrowed from mortgage proceeds. COMMERCIAL SPACE: Commercial area shall not exceed 20% of the total net rentable area of the project and commercial income shall not exceed 20% of effective gross income. ENVIRONMENTAL ISSUES: Special rules apply for properties which are located in Flood Hazard Zones as designated by FEMA. Lead-based paint and asbestos must be abated in accordance with HUD requirements. APPLICATION FEE: A non-refundable fee of 0.3% of the requested mortgage amount is payable to HUD at the time of application, plus estimated underwriting costs for market study, appraisal, architectural/engineering report, cost analysis, environmental assessment and other loan processing costs. FINANCING AND PLACEMENT FEES: Negotiable. CLOSING EXPENSES: Standard transaction costs, including legal fees, title insurance and survey. PROFESSIONAL LIABILITY INSURANCE: Required by HUD for all loans. The minimum requirement is $1 million per occurrence and $3 million aggregate. Further information regarding this requirement is available upon request. STATE LICENSURE: All loans must be licensed by the state or other governmental entity who has oversight responsibilities. OTHER HUD REQUIREMENTS: Cash escrows or letters of credit are required for the following: 1. 20% of repair costs as a completion guarantee. 2. 2.5% of repair costs as a latent defects guarantee, due at completion of repairs. 3. Forecasted operating deficits, (maximum of 18 months) to be released upon achievement of breakeven operations for 90 days. HUD PROCESSING TIME: One stage for HUD Multifamily Accelerated Processing (MAP) procedures: 1. Firm Commitment Stage: 60 days for review. PRELIMINARY SUBMISSION PACKAGE: Include the following in your request for a loan quote: 1. Property description and location map. 2. Number of beds with breakdown of proposed rents by payor source. 3. Current bed roll and year-to-date operating statement. 4. Operating history – prior 3 years, if available. 5. Current year operating budget. 6. Existing debt or purchase price. 7. Sponsor resume. Scott Kendall 847-903-7578 kendallrealty@gmail.com Charles Kendall 773-359-7974 kendallrealtyadv@gmail.com |