Fannie Mae - Health Care Facility Loans -

Financing for improvements or additions to multifamily properties, nursing homes, assisted living facilities, intermediate care facilities or group practice facilities with existing mortgage insurance under any section of Title II of the National Housing Act. Additional financing options include FF&E for nursing homes, assisted living facilities and group medical practices. Section 241 financing may also be used to fund the replacement of obsolescent equipment or new equipment for healthcare facilities.

Features

No working capital reserve required.
Operating deficit deposits are not usually required (since additions or improvements, which are not demonstrable as immediately economically feasible would be financed under other programs).
May also serve as credit enhancement for tax-exempt bond deals.

Structure
Loan Amount	lesser of: (i) 90% of cost of improvements or addition; or (ii) Existing debt plus 90% of value of improvements not to exceed maximum insurable amount*
Debt Service Coverage	minimum 1.11x
Loan Terms	fully amortizing (not to exceed the remaining term of the first mortgage)
Amortization	amortized over remaining term of first mortgage
Recourse	norecourse
Rates	- Ginnie Mae MBS and whole loan rates priced daily - rate may be locked after borrower’s acceptance of HUD’s firm commitment - Interest rate buy-downs available
*Advance rates over 90% are not available for nonprofit operators.

Optional Features
Assumability	fully assumable with HUD’s and lender’s consent
Prepayment	any prepayment lock out or penalty periods negotiable with investor

Requirements
Replacement reserve. Single-asset borrower entity.

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