FHA® 232/223(f):
HEALTHCARE REFINANCE, ACQUISTION OR MOD REHAB
Arbor provides FHA-insured, long-term, fixed-rate financing for refinance, acquisition or moderate renovation of assisted living and nursing facilities nationwide. Arbor uses the single-stage LEAN program to expedite underwriting and approval.
| Loan Term & Amortization | A maximum term of 35 years or 75% of the remaining economic life, fully amortizing |
| Maximum Loan | Determined by the lowest of:
|
| Fixed Rate | Yes |
| Eligible Properties | The facility must have been completed or substantially rehabilitated at least three years prior to the date of the application; projects with additions completed fewer than three years prior to HUD application submission are eligible if the additional square footage and number of beds were less than the original project s.f. and bed count |
| Ineligible Properties | Life-care-fee CCRC; LTAC (long-term acute care), adult day or currently in bankruptcy |
| Eligible Borrower | Single asset entity (for profit or nonprofit); three years’ ownership experience |
| Ineligible Borrower | Owner, operator or any affiliates currently in bankruptcy, or filed/emerged from bankruptcy within prior five years |
| Experience | Owners, operators/management agents must demonstrate a successful track record commensurate with properties of similar type, size and complexity; an owner-operator must have at least three years’ ownership and operating experience; SNF administrators must also have three years of experience |
| Cash Out | Not allowed; however, may refinance prior cash-out loan, subject to varying debt seasoning requirements (0 – 2 years seasoning) |
| Tax & Insurance Escrows | Monthly deposits required |
| Recourse | Nonrecourse |
| Commercial Space | Maximum 20% of gross floor area and maximum 20% of effective gross income |
| Required Reports | Appraisal, Property Capital Needs Assessment (PCNA) and Phase I Environmental |
| Prepayment | Typically 10% year one, declining 1% per year; other prepayment options available subject to market conditions |
| Assumable | Subject to Arbor and HUD approval and payment of assumption fee |
| Good Faith Deposit | Based on property type and loan size |
| Expense Escrow | Yes – sufficient to cover Arbor’s expenses and third-party report costs |
| Origination Fee | Negotiable |
| HUD Application Fee | Nonrefundable fee of $3 per $1,000 (0.3%) of the mortgage amount due to HUD with the firm commitment submission package |
| HUD Inspection Fee | $30 per unit when repairs are less than $3,000 per unit; 1% of the cost of the repairs otherwise |
| Legal/Closing Fee | Borrower pays Arbor’s counsel fee and miscellaneous closing costs |
| Rehabilitation Qualifications | Repairs not exceeding 5% of appraised value, or replacement of one major building system |
| Davis Bacon | Not applicable to this program |
| HUD Mortgage Insurance Premium (MIP) | 1% MIP upfront at closing. Annual MIP
|
V030419