FHA Section 232 is the best financing available today to develop Nursing Homes or Assisted Living Facilities.
And the need is much greater today more then ever! Why?
With the aging of the baby boomer generation, there is currently a huge strain on existing nursing home and assisted living facilities. There aren't enough beds to meet the demand. Now is the time for developers to get in and begin developing these properties. And the FHA Section 232 financing program is the best way to finance these developments.
What Is This Program?
FHA Section 232 is a Federal mortgage insured program. It doesn't mean that FHA is providing the funding...they are insuring the actual lenders against defaults. Section 232 is a section under the National Housing Act. It allows the FHA (Federal Housing Administration) to provide mortgage insurance to HUD approved lenders. This is to assist in the development or substantial rehabilitation of assisted living facilities or nursing homes. The loan program allows for long-term mortgages (up to 40 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage Backed Securities.
Who Can Use The FHA Section 232 Construction/Substantial Rehabilitation Financing?
This program is available for both non-profit and for-profit developers, public entities or investors. The maximum loan amount allowed with this type of financing is 95% of the estimated value of physical improvements and major movable equipment for non-profits and 90% for for-profit developers.
Eligible Property Types?
The facility must have a minimum of 20 beds and the residents must require skilled nursing care or continuous care. The facilities must be properly licensed/regulated by the appropriate state or local agencies.
What Are The Benefits?
There are so many good benefits of using this program. In today's times of credit crunch and tighter lending criteria, many developers are finding it increasingly hard to obtain good financing that makes their projects work. FHA Section 232 financing is usually the only way that developers can make their projects work (from a numbers stand point). I would recommend this program as the best on the market.
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