FHA Section 232/223(f) Mortgage Insurance Program

PURPOSE Permanent non-recourse mortgage financing for the refinance or acquisition of existing residential care facilities including skilled-nursing, intermediate-care, and assisted-living facilities. Minimum rehab allowed, up to 15% of the property’s appraised value after improvements. ELIGIBLE PROJECTS Licensed Nursing Homes, Assisted Living, Intermediate Care, and Board and Care a) Must provide continuous protective oversight b) Must offer three meals per day c) Facility must be licensed by state d) Non-resident day care not to exceed 20% of gross area and 20% of gross income e) May include up to 25% non-licensed independence living unites f) Three years must have passed since last certificate of occupancy was issued INTEREST RATE Fixed for term of loan, determined by market conditions at time of rate lock. Rate lock deposit is 0.5% and refunded at closing. LOAN PARAMETERS Maximum loan amount will be the lesser of: a) Recommended % of LTV b) Recommended % of Purchase Price for loans that finance acquisition c) Recommended Debt Service Coverage Ratio d) Existing debt plus transaction costs and proposed repairs HUD has recommended the following parameters: For Profit Mortgagor: 80% LTV, 1.45 DSCR For Non-Profit Mortgagor: 85% LTV, 1.45 DSCR LOAN TERM A maximum term of 35 years or 75% of the remaining economic life, fully amortizing. 2nd MORTGAGES Permissible, provided debt meets HUD’s criteria. ASSUMPTION/PREPAYMENT Negotiable with best pricing for 10 years of call protection (can be a combination of lockout and/or penalty); loan is fully assumable subject to HUD approval. NON-RECOURSE* Nothing contained herein is intended to be, nor should it be construed as, a commitment to lend on these or any other terms. Arizona MB007451