FHA Section 232 is the best financing available today to develop nursing homes or assisted living facilities.
And the need is so much greater today than ever! Why?
With the aging baby boom generation, there is currently great pressure on existing nursing homes and assisted living facilities. There are not enough beds to meet the demand. Now is the time for developers to come in and start developing these properties. And the FHA Section 232 funding program is the best way to fund these developments.
What is this program?
Section 232 of the FHA is a federal mortgage-insured program. It does not mean that the FHA is providing the funds … they are insuring actual lenders against defaults. Section 232 is a section of the National Housing Law. It allows the FHA (Federal Housing Administration) to provide mortgage insurance to HUD approved lenders. This is to assist in the substantial development or rehabilitation of assisted living facilities or nursing homes. The loan program allows long-term mortgages (up to 40 years) that can be financed with mortgage-backed securities from the Government’s National Mortgage Association (GNMA).
Who Can Use FHA Section 232 Substantial Construction / Rehabilitation Funding?
This program is available to non-profit and for-profit developers, public entities, or investors. The maximum loan amount allowed with this type of financing is 95% of the estimated value of major physical improvements and mobile equipment for non-profit organizations and 90% for for-profit developers.
Eligible property types?
The facility must have a minimum of 20 beds and residents must require skilled nursing care or ongoing care. The facilities must be duly authorized / regulated by the appropriate state or local agencies.
What are the benefits?
There are so many great benefits of using this program. In today’s times of credit crunch and tighter credit criteria, many developers are finding it increasingly difficult to get good financing to make their projects work. FHA Section 232 funding is often the only way developers can make their projects work (from a numbers standpoint). I would recommend this program as the best on the market.
