FHA 232 F Refinance Purchase Program

Kendall Realty Advisors
FHA LEAN lender, National Healthcare Lender

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