Construction or Rehabilitation of Nursing Homes, Assisted Living Facilities and Board and Care Facilities

Property Types: Skilled Nursing (Skilled and Intermediate Care), Assisted Living and Board and Care
Eligible Borrowers: For profit and non-profit entities
Loan Amount: No Minimum/Maximum-Statutory Mortgage Limits (adjusted for locality)
Region: Nationwide
Term & Amortization: New Construction:

  • Construction term, plus
  • 40 year self-amortizing loan

Rehabilitation:

  • Rehabilitation term, plus
  • 40 year self-amortizing permanent loan or 75% of estimated remaining economic useful life of the project, plus the construction term
General Loan Terms: The maximum loan is the lesser of:

  • 75% Loan to Value for Assisted Living/Board & Care Facilities
  • 80% Loan to Value for Skilled Nursing Facilities
  • 1.45x DSCR
  • 90% of replacement cost
Interest Rate: Fixed rate subject to market conditions at the time of rate lock
Recourse: None except standard carve outs
Assumable: Yes, subject to HUD approval.
Prepayment: Negotiable. Typically loans are prohibited from prepayment for the first 2 years then an 8% penalty declining 1% each year thereafter until 0%.
Mortgage Insurance Premium: 0.57% during construction and 0.50% annually
Other:
  • Davis Bacon prevailing wages are required
  • Escrows required for repairs, mortgage insurance premium, taxes, insurance and replacement reserves
  • Third parties include a market study, appraisal, Plans and Specs Review and Phase I