Residential care is defined as long-term care for senior citizens in a residential setting. Facilities offering this type of care are called Residential Care Facilities, most types of which can be financed with HUD 232 loans.

To learn more about FHA 232 loans, fill out the form below to speak to a HUD/FHA loan expert.

Residential care facilities typically provide 24-hour care and assistance with activities of daily living such as dressing, bathing, and taking medications. They also provide meals, housekeeping, and recreational activities. These facilities do not provide medical or nursing care.

Source: HUD 232 Loans and FHA 232 Financing

The full list of eligibility requirements for HUD 232 loans includes:

• Facilities must offer ongoing, continuous care and oversight for individuals requiring long-term care or medical attention
• Facilities must be licensed by an appropriate municipality or state body
• Properties must have been completed at least three years prior (for acquisition or rehabilitation financing)
• Additions less than three-years-old are acceptable, but cannot be larger than the original facility
• Facilities must accommodate 20 or more patients requiring continuous or skilled nursing care
• Non-resident day care must not exceed 20% of the property’s gross area and 20% of the gross income
• Independent living units cannot make up more than 25% percent of all units
• Commercial space must not exceed 20% of floor area or income

The benefits of residential care include access to social and health services, such as nutrition advice, trained counselors, and other support. According to this article, many community organizations offer these services for free to residents of affordable housing communities. Additionally, residential care facilities can be financed with HUD 232 loans, as outlined in this article.

The costs associated with residential care depend on the type of facility and the financing option chosen. For FHA 232 financing, the costs typically include a $15,000 application deposit, a $3,000 non-refundable processing fee, a 1% origination fee, a 2% rate lock fee (refundable at closing), and commitment fees. Additionally, third-party reports such as an Appraisal, Property Condition Assessment, Zoning, Termite, Flood, and Seismic reports (for properties in specific areas), a Phase I Environmental Assessment, and a Seniors Housing Liability Assessment Report are required. Replacement reserves are also required ($300/unit per year).

Source: www.hud232.loan/hud-232-glossary/residential-care and www.multifamily.loans/fannie-mae-senior-housing-loans