Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities
To provide mortgage insurance to HUD-approved lenders to facilitate the construction or rehabilitation of nursing homes, intermediate care facilities, board and care homes and assisted living facilities, to allow purchase or refinancing with or without repairs of projects not requiring substantial rehabilitation, and to provide loan insurance to install fire safety equipment.
General information about this opportunity
Last Known Status
Office of Housing-Federal Housing Commissioner, Department of Housing and Urban Development
Type(s) of Assistance Offered
F - Guaranteed/Insured Loans
National Housing Act, as amended, Section 232; Housing Act of 1959, as amended, Public Law 86-372; Housing and Urban Development Act of 1969, Public Law 91-152, 73 Stat. 654, 83 Stat. 379; Public Laws 95-128, 95-557, 96-153, and 98-181
Who is eligible to apply/benefit from this assistance?
Eligible mortgagors include investors, builders, developers, public entities, nursing homes and private nonprofit corporations or associations.
Residents requiring skilled nursing, custodial care, and assistance with activities of daily living are eligible to live in a structure whose mortgage is insured under the program.
Documentation regarding the characteristics of the property and the qualifications of the mortgagor are assembled by the mortgagee and submitted with the application. Certification of need and inspection and licensing by the State agency designated by the Public Health Service Act for the State in which the nursing home or intermediate care facility is to be located is required, or, if no State Agency exists, an alternative market study is required. A Certificate of Need may be required for a board and care home or assisted living facility. A statement from the appropriate State Agency is required stating that the State is in compliance with Section 1616 (e) of the Social Security Act. This facility must be licensed.
What is the process for applying and being award this assistance?
Preapplication coordination is required. An environmental impact statement is required for this listing. An environmental impact assessment is required for this listing. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. Depending upon the project, an Environmental Impact Study may be required.
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. Applications for mortgage insurance are assembled and underwritten by FHA-Approved Lenders before submittable to HUD for processing of the Firm Commitment (there is also a Pre-application process for projects with new units whereby HUD comments on the market). Please see the "General Overview" document posted at www.fha.gov/232lenderprocessing for a list of lenders who offer Section 232 loans.
HUD makes the final decision to approve, or reject individual projects.
Approval/Disapproval Decision Time
Processing time depends upon the degree of preparation by the sponsor and the completeness of the package submitted by the FHA Approved Lender.
If an application for mortgage insurance is refused, HUD will state the reasons for the refusal. If reapplication is desired, the applicant may modify the application and reapply.
The term of a commitment to insure may be extended when more time is required to close the loan.
How are proposals selected?
How may assistance be used?
Section 232 insures lenders against loss on mortgage defaults. Insured mortgages may be used to finance construction or renovation of facilities to accommodate 20 or more patients requiring skilled nursing care and related medical services, or those who while not in need of nursing home care, are in need of minimum but continuous care provided by licensed or trained personnel. Board and care homes and assisted living facilities are also eligible and must contain a minimum of five accommodations or units. Nursing homes, intermediate care facilities, board and care homes and assisted living facilities may be combined in the same facility covered by an insured mortgage or may be in separate facilities. Nursing homes, intermediate care facilities, board and care homes and assisted living facilities must be licensed or regulated by the appropriate state agency, municipality, or other political subdivision where located. Contractors for new construction and substantial rehabilitation projects must comply with prevailing wage requirements under the Davis-Bacon Act.
What are the requirements after being awarded this opportunity?
The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor, or lesser, in order to determine their compliance and conformance with HUD regulations and standards. Audited Annual Financial Statement are required of Mortgagor entities and Operators.
Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the FHA regulations.
Other Assistance Considerations
Formula and Matching Requirements
Statutory formula is not applicable to this assistance listing.
Matching requirements are not applicable to this assistance listing.
MOE requirements are not applicable to this assistance listing.
Length and Time Phasing of Assistance
The maximum mortgage term is 40 years for new construction and substantial rehabilitation. The maximum term for existing projects without substantial rehabilitation is 35 years. Method of awarding/releasing assistance: Lump.
Who do I contact about this opportunity?
Regional or Local Office
Applications for mortgage insurance are assembled and underwritten by FHA-Approved Lenders before submittable to HUD for processing of the Firm Commitment (there is also a Prue-application process for projects with new units whereby HUD comments on the market). Please see the "General Overview" document posted at www.fha.gov/232lenderprocessing for a list of lenders who work on Section 232 loans.
Ivy M. Jackson,
451 7th Street, SW Rm 6264
Washington, DC 20410 US
(Guaranteed/Insured Loans) FY 16 est $2,765,000,000.00; FY 15$2,770,000,000.00; FY 17 est $2,765,000,000.00;
Range and Average of Financial Assistance
Regulations, Guidelines and Literature
Fact Sheet: Nursing Homes (Mortgage Insurance); Minimum Property Standards for Nursing Homes; (FHA Regulations). Handbook for Nursing Homes and Intermediate Care Facilities; (4600.1); (FHA Regulations 24 CFR 232 and 200), available on HUDCLIPS at http://www.hudclips.org.; Lean processing information available at www.fha.gov/232lenderprocessing
Examples of Funded Projects