HUD 242/223(f) Program - Acquisition or Refinance of Hospitals
| Property Types | Acute Care Hospitals (at least 50% of total patient days must come from acute care services except for critical access hospitals) |
| Eligible Borrowers | For profit and non-profit entities (must demonstrate need and obtain CON if required by the state) |
| Loan Amount | No Minimum/No Maximum |
| Locations | Nationwide |
| Term & Amortization | Up to 25 years and fully amortizing |
| General Loan Terms | Maximum loan cannot exceed 90% Loan to Value |
| 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 | Typically loans are prohibited from prepayment for the 1st year, then have a 9% penalty declining 1% each year thereafter until 0%. Alternative lockout and prepayment structures are available. |
| Mortgage Insurance Premium | 1% at closing |
| Professional Liability Insurance | HUD requires a minimum coverage of $1 million per occurrence and $3 million aggregate. Waivers may be granted in cases where premiums are high and claim history is clean. |
| Other |
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