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

Property Types

Skilled Nursing (Skilled and Intermediate Care), Assisted Living, and Board & Care Facilities

Eligible Borrowers

For profit and non-profit entities

Loan Amount

No Minimum/No Maximum



Term & Amortization

Up to 35 years and fully amortizing

General Loan Terms

The maximum loan is the lesser of:

  • 80% (85% non-profit) Loan to Value
  • 1.45x Debt Service Coverage
  • 100% of the cost to refinance including repairs
  • 80% of acquisition costs
Interest Rate

Fixed rate, subject to market conditions at the time of rate lock


None, except standard carve-outs


Yes, 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.

Mortgage Insurance Premium

1% at closing
0.65% annually

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.

  • Cash out refinancing not permitted
  • Escrows required for repairs, mortgage insurance premium, taxes, insurance, and replacement reserves
  • Third party reports include appraisal, PCNA, and Phase I
  • Secondary financing is allowed, subject to HUD approval