HUD 232/223(f) Loan - Acquisition or Refinance of Healthcare Facilities

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Eligible Properties

Licensed skilled nursing and rehabilitation, assisted living, memory care, intermediate care, and board and care facilities with limited independent living units.

Eligible Borrowers

Single-asset, special purpose entities, either for-profit or non-profit.



Loan Amount

No minimum/no maximum (subject to General Loan Parameters).

General Loan Parameters

Maximum loan amount:

  • For acquisitions, the lesser of 85% of HUD's allowable acquisition costs and        80% of appraised value.
  • For refinancings, the lesser of 100% of refinancing costs and 80% of appraised value.
  • For both acquisitions and refinancings, an amount that results in a minimum DSCR of 1.45x based on the underwritten NOI.

Please note, the maximum LTV and allowable acquisition costs may be increased by 5% for non-profit borrowing entities.


Interest Rate

Fixed-rate, subject to market conditions at time of rate lock.

Term & Amortization

Up to 35 years or 75% of the remaining useful life of the property, fully amortizing.



Mortgage Insurance Premium

1% at closing,
0.65% annually thereafter.


Fully assumable, subject to HUD approval.


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.

Professional Liability Insurance

HUD requires a minimum coverage of $1 million per occurrence and $3 million in aggregate.  Waivers may be granted in cases where premiums are high and claims history is clean.

  • Facilities financed under this program must be at least 3 years old. 
  • Unlicensed independent living units are allowed, but cannot exceed 25% of the project's total units.
  • Escrows are required for repairs, mortgage insurance premium, taxes, insurance, and replacement reserves.
  • Required third party reports include Appraisal, PCNA, and Phase I.
  • Secondary financing is allowed in the form of a surplus cash note and is subject to HUD approval.
  • Cash-out refinancing is not permitted.