Continuum of Care Facilities and HUD 232 Loans
According to HUD regulations, continuum of care facilities can be financed with HUD 232 and HUD 232/223(f) loans. In brief, to benefit from these HUD mortgage programs, the amount of independent living units must remain under 25%.
What is a Continuum of Care Facility?
The phrase ‘continuum of care’ actually refers to the services offered and not necessarily the facility itself. However, for seniors, continuum of care facilities usually offer independent living, assisted living, and skilled nursing care in one location. Because of this, a continuum of care facility functions like an adult daycare center crossed with a nursing home.
To become a resident at the facility, a person pays an up-front, buy-in fee. As they age and require more care, their monthly fees may increase. Throughout their time at the facility, care can be adjusted according to their changing needs.
If a resident contracts a short term health issue, they can often be treated on-site without needing to be hospitalized. After they recover, they return to their residential unit. These facilities are ideal for spouses — if one becomes ill, then the other can stay close as their partner receives care.
In theory, an individual could first stay in an independent living unit. Then, as their needs change over time, they can transfer to an assisted living unit. Finally, they could move to a skilled nursing care unit for their remaining time.