SBA 504 & HUD Loans for Assisted Living Centers, Skilled Nursing Facilities, Adult Day Care, Board & Care, Retirement & Nursing Home Construction, Renovation and Refinance
HUD 232 and 223(f) Loans
HUD 232 For Construction Loans:
- Interest only through construction period
- 40 year loan term and amortization
- Interest rate fixed for term of loan - currently in the 5.25% range (June 2010)
- $2,500,000 minimum loan amount with no maximum
- Loan to hard and soft costs is 90%
- Loan is non-recourse, even through construction
- Loan is assumable
- Prepayment is normally: Closed for 5 years, then 5% first year declining 1% per year to par
- Fees to Lender are normally ½% to 1% of loan amount
- Ownership may be for profit or non profit
HUD 223(f) For Refinancing current HUD loans:
- 35 year loan term and amortization
- Interest rate fixed for term of loan currently in the 5.25% range (June 2010)
- $2,500,000 minimum loan amount with no maximum
- Loan to value is 85%
- Loan is non-recourse
- Loan is assumable
- Prepayment is normally: Closed for 5 years, then 5% first year declining 1% per year to par
- Fees to Lender are normally ½% to 1% of loan amount
- Ownership may be for profit or non profit
HUD 232 and 223f Costs
Please note that both the HUD 232 and 223(f) programs have significant upfront costs although most can be financed into the loan. Here is sampling of typical fees:
- Appraisal: $6 - 8,000
- Environmental: approx $5,000
- Engineering Report: approx $3,500
- MAPS underwriting: approx $7,500
- HUD fee: 3/10ths of 1 percent
MAPS stands for Multifamily Accelerated Processor Services and they are underwriters designated by HUD for healthcare underwriting.
Higher Total Project Costs with the SBA Green 504
The HUD programs can handle much larger projects than an SBA loan, but recent changes to the 504 loan program allow larger loan amounts than ever before through the 504 program. 504 loans are now available for projects upwards of $12,000,000 if you go green. Loans are available for non-green projects of approximately $7 to $8 million.
To qualify for maximum financing you must produce enough of your own energy to significantly impact your energy usage and costs. This new version of the 504 - the green 504 loan - is an excellent tool for anyone looking to finance a senior care facility with long term, attractive commercial financing.
By going green you will be helping the environment and possibly significantly lowering your long term energy and operating costs and you will be doing it with the least possible out of pocket expense.
Commercial Financing with 15 to 20% Down
The 504 requires 15 to 20% down at a time when most banks and lenders are looking for 30% or more down. The amount of down payment is dependent on your level of experience in the senior housing industry.
The program is ideal for smaller, locally owned senior housing facilities, since it requires that the owner be "hands on."
Conventional Financing for Assisted Living and Senior Housing Developments
Obtaining SBA, USDA - and especially HUD - financing is currently a long, cumbersome process and much quicker conventional financing is available for strong projects. We have access to capital sources who may be able help fund your project much quicker and without recourse/personal guarantees.
Please contact us at 1-800-414-5285 to see what is possible.
More SBA 504 Loan info: 504 Loans
