In order to be eligible for HUD 232 financing, properties need to meet a variety of eligibility requirements, including offering continuous care, being appropriately licensed, and having at least 20 patients. Additionally, in order to take out a HUD 232 or HUD 232/223(f) loan, a borrower must typically have experience successfully operating one or more facilities of the same kind that they intend to build or purchase. Eligible borrowers may either be a for-profit or a non-profit entity. To learn more about FHA 232 loans, fill out the form below to speak to a HUD/FHA loan expert.

Properties eligible for HUD 232 loans must offer continuous care and oversight for individuals requiring long-term care or medical attention, be licensed by an appropriate municipality or state body, have been completed at least three years prior (for acquisition or rehabilitation financing), accommodate 20 or more patients requiring continuous or skilled nursing care, have non-resident day care not exceeding 20% of the property’s gross area and 20% of the gross income, have independent living units not making up more than 25% of all units, and have commercial space not exceeding 20% of floor area or income.

For more information, please visit www.hud232.loan/hud-232-faqs/eligibility-requirements and www.commercialrealestate.loans/hud-232-loans.

HUD 232 portfolio loans have a variety of benefits for large-scale owners of senior properties, including:

• HUD 232 refinancing of multiple properties can greatly increase cash flow, potentially giving developers the capital to purchase or construct new assets
• HUD fixed-rate financing allows large companies to stabilize expenses and make accurate financial projections well into the future
• Low, fixed interest rates
• Loans are fully assumable (with FHA/HUD approval)
• HUD 232 loans are non-recourse, limiting risks for developers
• For purchase and refinancing, HUD offers up to a 35-year loan term and amortization. Over the life of the loan, this saves the borrowers a good deal of money and frees up cash for other expenditures.
• For new construction of healthcare facilities, only HUD offers only a 40-year, fixed-rate, non-recourse loan program.
• Loans are low interest, fixed-rate, non-recourse, fully assumable with no balloon payments.
• This program has one of the highest LTVs (loan-to-value ratio) available.
• There are no financial capacity requirements, no geographic restrictions, and no minimum population requirements.
• This assisted living financing program allows for repair and improvement funds.
• HUD 232 allows supplemental financing.

The risks associated with a HUD 232 loan include high upfront costs, longer application process, mortgage insurance premiums (MIP), HUD property inspections, annual audited operating statements, replacement reserve escrows, restrictions on owner distributions, and cash out restrictions.

For more information, please see the following sources:

• Pros and Cons of HUD 232 Loans
• HUD 232 Loans

The costs associated with a HUD 232 loan include a non-refundable 0.3% HUD Application fee (0.3% of the loan amount), a 0.5% FHA inspection fee (paid from loan proceeds), lender application fees (which cover due diligence activities and third-party reports), a good faith deposit for commitment and rate lock (between 0.5% and 1% of the loan), funds for initial replacement reserves, and standard closing costs (may include legal and title costs).