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HUD 232

Eligible Properties

New construction or substantial rehabilitation of Nursing Homes, Intermediate Care Facilities, Board and Care Home and Assisted Living Facilities



Single asset and single purpose entity, either for-profit or non-profit


Fully non-recourse during both construction & permanent phases of financing

Loan Amount

No limits

Maximum Mortgage Limits

The lesser of:

a) 80% of value including major moveable equipment

b) 90% replacement costs plus land/as is value

c) 1.45 DSCR; NOI attributable to real estate only

Fixed Assisted Living Facilities

75% of value, including major movable equipment 1.45 DSCR, NOI attributable to real estate only

Interest Rate

Fixed rate determined by market conditions at the time of rate lock

Amortization & Term

Interest only during the construction period, plus 40 years fully amortizing

Mortgage Insurance Premium

.77% each year during construction
.77% annually


Escrows for taxes, insurance, replacement reserves & mortgage insurance premium are required

Federal Labor Standards

Federal prevailing wage & reporting requirements

Secondary Financing

Permitted under certain conditions at closing

Assurance Of Completion

Payment & performance bond or cash deposit/LOC


Financing Fees

Fees Negotiable

HUD Exam Fee

$3 per $1,000 of requested mortgage

HUD Inspection Fee

$5 per $1,000 of requested mortgage for new construction and $5 per $1,000 of improvements cost for substantial rehabilitation

Rate Lock Deposit

1/2% of mortgage amount, refunded at closing


Third Party Expense Deposit

Estimated at $35,000 for market study, appraisal, architectural and costs review and environmental reports

Legal And Closing Fees

Estimated to be $20,000 payable to Closing Counsel at Initial Endorsement from loan proceeds


HUD Review Time

45 days pre-application; 45 - 60 days firm application

Professional Liability Insurance

Minimum $1,000,000/$3,000,000 coverage for operators/managers

Working Capital

Cash or LOC equal to 2.0% of the amount

Initial Operation Deficit

Cash or LOC; if required

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