FHA Section 242 and 223(f) loans have become a new standard for innovative and progressive hospital financing. More and more hospitals are using FHA Insurance/HUD financing to solve their capital needs. Bristol Capital has formed unique strategic alliances with the most substantial, creditable and experienced lenders investment banks to originate Section 242 loans. Key points to Section 242 (construction component & equipment) and Section 223(f) (rate reduction driven) include:
- Provides lowest fixed rates to clean up and simplify Hospital balance sheet.
- No maximum loan amount - $755 million largest loan to date down to $2 million;
- Loan to Value up to 90%, no cash required at closing with sufficient equity;
- Fixed low interest rates in mid +/-3.6% range (AAA Government Credit Rating = low rate);
- 25 Year amortization;
- Fund remodeling, expansion, modernization, capital equipment also refinancing for lower rate;
- Available to hospitals in all 50 states and territories.
Qualification criteria include, but not limited to:
- Acute Care Hospitals, Critical Access Hospitals, Large Urban Teaching Hospitals, Hospitals in Systems, For-Profit, Not-For-Profit, and Government-Owned Hospitals.
- Loan goals include: Remodeling, expansion, modernization, equipment and refinancing.
- Last three years operating margins equal to or greater than 0%.
- Average debt service coverage ratio equal to or greater than 1.25.
- FHA Mortgage Insurance is for hospitals with a history of positive operating performance.
Info on FHA Mortgage Insurance
- Section 242 Pursuant to Section 223 (F)(Interest Rate Reduction Motivated) (PDF)
- Section 242 (New Construction or Substantial Rehab.) (PDF)