Build, Acquire, or Refinance Your Senior Housing Facility With a HUD 232 or HUD 232/223(f) Loan

With 75 million baby boomers in the U.S., and an additional 3 million Americans turning 65 every year, there's never been a better time to build senior housing. Fortunately, the U.S. Department of Housing and Urban Development (HUD) offers long-term, fixed-rate, non-recourse loans through the HUD 232 and HUD 232/223(f) loan programs. 

If you're looking to build a senior housing facility, assisted living home, or skilled nursing property, HUD 232 and HUD 232/223(f) loans provide some of the best terms in the industry-- and we can't wait to help you get started with this incredibly exiting form of financing. 

HUD 232 Basic Information 

The basic terms of the HUD 232 loan include: 

  • Loan Purpose: Construction, acquisition, rehabilitation of properties intended for senior citizens.

  • Loan Size: Typical $2 million minimum (but average loan size is $7.6 million)

  • Loan Term:

  • Skilled Nursing Facilities/Independent Living Units: 80% LTV (for profit), 85% LTV (non-profit) 

  • Assisted Living Facilities: 

    • New Construction: 75% LTV (for profit), 80% (non-profit) 

    • Purchase: 80% LTV (for profit), 85% LTV (non-profit) 

    • Substantial Rehabilitation: 80% LTV (for profit), 85% LTV (non-profit) 

      • Or, 90% of HUD eligible replacement costs (whichever is less)

      • For borrower owned properties, 100% of the existing mortgage debt or 90% of the “as is” market value of the property before rehabilitation (95% for non-profits)

      • For properties that will be bought and substantially rehabilitated, 85% of the purchase price of the property or 90% of the current market value of the property before rehabilitation (95% for non profits)

      • This applies to Skilled Nursing Facilities/Independent Living Units as well

HUD 232/223(f) Basic Information

Projects that don't qualify for substantial rehabilitation or purchase under other HUD 232 loan programs may qualify for the HUD 232/223(f) program. This financing is available for borrowers who want to either purchase or refinance a senior living development. The terms of this loan product include:

  • Loan Purpose: Purchase or refinancing of properties intended for senior citizens.

  • Loan Size: Typical $2 million minimum (but average loan size is $7.6 million)

  • Loan Term: Minimum 10 years, maximum 35 years (or 75% of the remaining economic life of the property, whichever is less)

  • Leverage:

    • Purchase:

      • Lesser of 85 percent of the acquisition price or appraised value (for-profits)

      • Lesser of 90 percent of the acquisition price or appraised value (non-profits)

    • Refinance::

      • Lesser of 100 percent of the cost to refinance or 85 percent of appraised value (for-profits)

      • Lesser of 100 percent of the cost to refinance or 90 percent of appraised value (non-profits)

  • DSCR: 1.45x minimum DSCR

Tools for Brokers, Investors, and Developers 

No matter who you are, if you're interested in HUD 232 or HUD 232/223(f) financing for a senior living development, we have the tools to help. Our helpful information sections cover subjects including: 

Plus, our site contains extremely specific information for developers, including: 

FHA financing for senior communities doesn't need to be a hassle. Simply click the button below to connect with a HUD 232 financing expert and get a free quote today!

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