Love Funding, one of the nation’s leading providers of FHA multifamily, affordable and healthcare financing, announced the closing of a $9.17 million loan refinancing for KentRidge at Golden Pond, a 96-bed assisted living facility in Kent, Ohio.
Senior Director Robert Smallwood of Love Funding’s Cleveland office secured the loan through the U.S. Department of Housing and Urban Development’s 232/223(f) loan insurance program. Using the program enabled the group of original owners to retire a bridge loan used in 2011 to acquire 100% of the property ownership, and significantly improve the facility’s cash flow by moving to a low, fixed-rate, non-recourse FHA loan with a term of 35 years.
Healthcare facilities often are refinanced to allow a single or multiple members of the existing ownership group to stay on while others leave. In these cases, low-cost HUD loan insurance is not available for a period of two years due to the existence of a so-called “identity of interest.” In its stead, borrowers typically secure higher cost bridge loans to finance the property until they are able to obtain FHA financing.
“Because bridge loans are typically more expensive, moving to a HUD insured loan can free up extra cash flow,” Smallwood said. “In this case, the savings were substantial given the wide difference in borrowing rates.”
For more information, contact Robert Smallwood at (216) 583-0791.