Healthcare Loan Programs

Property Type:

The full range of property types from independent living congregate facilities to nursing homes will be considered. This includes assisted living and board and care facilities.

Property Age:

Facilities should have been completed and in operation for at least 12 months. Properties built or substantially renovated since 1975 are preferred.

Loan Limits:

The loan-to-value ratio may not exceed 80%. The minimum debt service coverage ratio for facilities in which medicine is dispensed by staff is 130%. For facilities providing a lesser intensity of care which are primarily residential, the minimum coverage ratio is 120%. Lower coverage ratios may be accepted for facilities that are net leased to credit operators.

Occupancy:

Occupancy should be stable or increasing. The facility should be located in a market area in which demand is expected to increase.

Borrowing Entity:

Generally, a single purpose entity is required.

Loan Term:

5, 7 or 10 year terms are available at the borrower's option. Amortization is on a 15-25 year basis.

Rates:

The interest rate is set at a fixed spread over comparable term treasuries, and varies based on coverage ratios. Floating rates are also available. Please call for current rate and spread quotes.

Guarantees:

The loans are generally non-recourse except for normal lender carve-outs. Limited liability may be required for loans with lower coverage ratios.

Assumable:

Yes, with consent and payment of a 1% assumption fee.

Reserves:

Tax and insurance reserves are required. Also, a replacement reserve account is to be established and funded at an annual minimum rate of $250 per bed (or, as applicable, per unit).

Prepayment:

Prepayment will be prohibited for approximately half of the term and then be subject to defeasance or yield maintenance until the final six months, during which prepayment is allowed without penalty.

Use of Proceeds:

Loans are available for both purchase and refinance transactions.

Exceptions:

On a case by case basis we will consider net leased properties, properties on leased land, properties or sponsors with troubled credit histories, longer amortization periods for recently constructed properties, nursing facilities of less than 85 licensed beds, nursing facilities with any rooms containing more than two beds, and 100% private pay facilities.