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Section 232 Financing Requirements

New Construction/Substantial Rehabilitation Requirements
Unit Type Borrower Type Mortgage Term Max LTV Min DSCR Master
Lease*
SNF/ILU For Profit 40 years 80% 1.45 Yes
SNF/ILU Non-Profit 40 years 85% 1.45 Yes
ALF For Profit 40 years 75% 1.45 Yes
ALF Non-Profit 40 years 80% 1.45 Yes
B&C For Profit 40 years 75% 1.45 Yes
B&C Non-Profit 40 years 80% 1.45 Yes

New Purchase Requirements
Unit Type Borrower Type Mortgage Term Max LTV Min DSCR Master Lease*
SNF/ILU For Profit 35 years 80% 1.45 Yes
SNF/ILU Non-Profit 35 years 85% 1.45 Yes
ALF For Profit 35 years 80% 1.45 Yes
ALF Non-Profit 35 years 85% 1.45 Yes
B&C For Profit 35 years 80% 1.45 Yes
B&C Non-Profit 35 years 85% 1.45 Yes

Refinancing Requirements

For projects that are not currently FHA insured (223f loans)

Unit Type Borrower Type Mortgage Term Max LTV Min DSCR Master Lease*
SNF/ILU For Profit 35 years 80% 1.45 Yes
SNF/ILU Non-Profit 35 years 85% 1.45 Yes
ALF For Profit 35 years 80% 1.45 Yes
ALF Non-Profit 35 years 85% 1.45 Yes
B&C For Profit 35 years 80% 1.45 Yes
B&C Non-Profit 35 years 85% 1.45 Yes

For projects that are currently FHA insured (223f or 223a7 loans)

Unit Type Borrower Type Mortgage Term** Max LTV Min DSCR Master
Lease*
SNF/ILU For Profit 12 years N/A 1.11 Yes
SNF/ILU Non-Profit 12 years N/A 1.05 Yes
ALF For Profit 12 years N/A 1.11 Yes
ALF Non-Profit 12 years N/A 1.05 Yes
B&C For Profit 12 years N/A 1.11 Yes
B&C Non-Profit 12 years N/A 1.05 Yes
 

*MasterLease required if there is an operating lease for three or more facilities and/or totaling $15 million dollars

** HUD may grant term extensions up to 12 years beyond the remaining term if the lender demonstrates that the additional term will inure to the benefit of the insurance fund.  In no event may the loan term extend beyond the maximum term under the Section of the Act of the original mortgage – 223f’s = 35 years.  232 New Construction, Substantial Rehabilitation, or 241a = 40 years.

Note:  These charts are limited and preliminary and shall not be construed as an approval of a submission.  Program participants must follow all application submission procedures.