Assisted Living Facility Financing

Eligible Property Types:

Sub-Acute, Skilled and Intermediate Nursing, Assisted Living, Board and Care, Properties with Multiple Care Levels. Properties Requiring Entrance Fees or Prepaid Life Care Are Not Eligible.

 

Property Type:

Free standing or multiple care level properties to be built, or existing structures to be converted or substantially rehabilitated.

Loan Limits:
The loan-to-value ratio may not exceed 90% for profit motivated borrowers or 95% for non-profits. The minimum debt service coverage ratio is 111%.

Occupancy Requirements:
Market demand should be stable or increasing. The facility should be located in a market area in which need is demonstrated to sustain occupancies at or above 90%. For initial underwriting purposes (on nursing homes only) the patient mix is assumed at not less than 70% Medicaid.

Loan Term:
Construction period plus 40 years, fully amortizing, no calls and no repricing.

Rates:
Very favorable rates are available, and they are fixed at construction start and through the mortgage term. Please call for a current interest rate indication.

Fees:
The borrower is responsible for all closing costs and required reports (appraisals, engineering and environmental reports, surveys, etc.).

Guarantees:
None. The loans are fully non-recourse, even during construction. However, the general contract must be secured with a 100% payment and performance bond or an acceptable letter of credit equal to 15% of construction costs.

Assumable:
Yes, with consent and a 1% assumption fee.

Reserves: Tax and insurance reserves are required. Also, a replacement reserve account will be established to fund the future replacement of building and FFE items as required.

Prepayment:
Prepayment is customarily permitted after 5 years. Special prepayment terms may be available where required.

Use of Proceeds:
Land acquisition, site costs, all construction hard and soft costs, FFE, financing and licensing fee. No offsite improvement costs are mortgageable, nor are development, consulting or financing fees paid to the borrower or its affiliates. Owner builders may be credited with market based GC fees.