Subject to Davis-Bacon requirements.
Full escrows for property taxes and all applicable insurance are funded at closing. A Replacement Reserve account must be established at closing and is made immediately available for replacement of short-lived depreciable items. An escrow up to 4% of the mortgage amount is required for Working Capital. This must be funded by mortgagor with cash/letter of credit. An Operating Deficit escrow will be required by HUD to cover anticipated operating losses until sustaining occupancy is reached and funded by cash or a letter of credit.
This is a non-recourse loan. Long loan term - up to 40 years in addition to the construction period, fully-amortizing. Low, fixed interest rates. Loan-to-value ratio – Skilled Nursing Facility (SNF) - up to 80% for a for-profit enterprise, inclusive of major movable equipment, (85%for a not-for-profit) for both New Construction and Sub-Rehab. Loan-to-value ratio – Assisted Living Facility (ALF) - up to 75% for a for-profit enterprise inclusive of major moveable equipment, (80% for a not-for-profit) for New Construction and 80% for a for-profit enterprise (85% not-for-profit) for a Sub-Rehab. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. Converts to permanent financing upon completion at no extra cost. Fully assumable, subject to CMI and HUD approval. Can be used as a credit enhancement for tax exempt bonds. Debt Service Coverage of 1.25 - 1.45.
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