232/223(f) – Refinance or Purchase of Skilled Nursing and Assisted Living Facilities

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ELIGIBLE PROPERTIES:
Skilled nursing, assisted living, intermediate care and board and care facilities, or any combination thereof which are at least 3 years old from the date of initial occupancy. Moderate rehabilitation is permitted.

LOAN TYPE:
Permanent loan.

MAXIMUM LOAN:
The lesser of the following criteria:
85% of FHA appraised value;
1.17 debt service coverage.
Refinance Transaction:
The existing indebtedness plus transaction costs.
Purchase Transaction:
85% of the cost of acquisition.

INTEREST RATES:
Fixed rate determined by market rates at the time of rate lock.

AMORTIZATION:
Up to 35-year, fully amortizing loan.

PERSONAL RECOURSE:
Non-recourse.

ASSUMABILITY:
Assumable, subject to Walker & Dunlop approval.

SUBORDINATE FINANCING:
Allowable, subject to FHA criteria.

PROFESSIONAL AND GENERAL LIABILITY INSURANCE:
Required.

ANNUAL MORTGAGE INSURANCE PREMIUM:
1.0% of the mortgage amount is payable at closing. Thereafter, the MIP is escrowed monthly based on a rate established by FHA. The rate is fixed at loan endorsement.

ESCROWS:
Monthly escrows for property insurance, real estate taxes, reserves for replacement, sinking fund (if applicable) and mortgage insurance premiums.
An initial deposit to replacement reserve and 100% of repair costs (both as determined by FHA) are escrowed from mortgage proceeds.

COMMERCIAL SPACE:
Commercial area shall not exceed 20% of the total net rentable area of the project and commercial income shall not exceed 20% of effective gross income.

ENVIRONMENTAL ISSUES:
Special rules apply for properties which are located in Flood Hazard Zones as designated by FEMA.
Lead-based paint and asbestos must be abated in accordance with FHA requirements.

APPLICATION FEE:
A non-refundable fee of 0.3% of the requested mortgage amount is payable to FHA at the time of application, plus estimated underwriting costs for market study, appraisal, architectural/engineering report, cost analysis, environmental assessment and other loan processing costs.

FINANCING AND PLACEMENT FEES:
Negotiable.

CLOSING EXPENSES:
Standard transaction costs, including legal fees, title insurance and survey.

PROFESSIONAL LIABILITY INSURANCE:
Required by FHA for all loans. The minimum requirement is $1 million per occurrence and $3 million aggregate. Further information regarding this requirement is available upon request.

STATE LICENSURE:
All loans must be licensed by the state or other governmental entity who has oversight responsibilities.

OTHER FHA REQUIREMENTS:
Cash escrows or letters of credit are required for the following:
20% of repair costs as a completion guarantee.
2.5% of repair costs as a latent defects guarantee, due at completion of repairs.
Forecasted operating deficits (maximum of 18 months) to be released upon achievement of breakeven operations for 90 days.

FHA PROCESSING TIME:
One stage for FHA LEAN Processing Procedures:
Firm Commitment Stage: 30 days for review.

PRELIMINARY SUBMISSION PACKAGE:
Include the following in your request for a loan quote:
Property description and location map.
Number of beds with breakdown of proposed rents by payor source.
Current bed roll and year-to-date operating statement.
Operating history – prior 3 years, if available.
Current year operating budget.
Existing debt or purchase price.
Sponsor resume.

This is a summary of general program terms, which are subject to change. This is not a commitment to lend.