Seniors Housing & Healthcare

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Fannie Mae offers financing solutions for acquisition, refinance, and renovation for existing properties. Berkadia has delegated authority to underwrite Seniors Housing loans, and that means fast decisions and creative solutions.

Eligible Properties

• Independent living, assisted living, assisted living with alzheimer’s, in any combination, or standalone alzheimer’s/dementia
• Continuing care retirement communities and properties with skilled nursing units may be considered

Eligible Sponsors & Operators

Sponsors and operators with a minimum of five years experience in the Seniors Housing industry and a minimum of five stabilized properties

Interest Rate & Terms

• Fixed-rates and variable-rates are available
• Actual/360 and 30/360
• 30 to 90-day commitments are available. Early rate lock feature is also available, allowing the borrower to lock a rate 45 to 365 days in advance of closing
• Terms ranging from five to 30 years are available

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Freddie Mac offers flexible loan terms and multiple financing options for a variety of Seniors Housing property types. The programs are specifically designed for the purchase or refinance of Seniors Housing properties. Berkadia has the ability to originate and underwrite Freddie Mac Seniors Housing loans.

Eligible Properties

• Independent living, assisted living, assisted living with alzheimer’s, in any combination, or standalone alzheimer’s/dementia
• Continuing care retirement communities and properties with skilled nursing units may be considered

Loan Features

5 to 30 years

Eligible Borrowers

• Sponsors and operators with a minimum of five years experience in the Seniors Housing industry and a minimum of five stabilized properties

Financing Options

• Fixed-rate mortgages
• Adjustable-rate mortgages
• Structured and affordable transactions including multiple loan pools
• Supplemental mortgages

Escrow

Fully funded replacement reserve, tax and insurance escrows are required

Early Rate-Lock

Available

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Non-Recourse, fully assumable financing for purchases and refinances of skilled nursing, assisted living, and memory care communities.

Eligible Properties

• Project must be licensed (or certified in some jurisdictions) and comply with all HUD, federal, state, and local standards. Independent living is eligible up to 25% of total project beds
• Project must have been completed or substantially rehabilitated for at least three years and include a minimum of 20 beds
• Single asset /special purpose borrowing entity required

Loan Features

• Low, fixed interest rates
• Up to 35-year term, fully amortizing
• Non-recourse and fully assumable
• Eligible transaction costs, including certain owner elective repairs, are mortgageable

Mortgage Loan Amount

The mortgage is limited to the lesser of:

• 80% of appraised value (85% for non-profits)
• 100% of eligible transaction costs (refinance) or 85% of eligible transaction costs (acquisitions)
• 1.45x underwritten debt service coverage ratio

Prepayment

Standard prepayment schedule is 10% in year one, stepping down 1% annually, however, alternative prepayment structures are available subject to market conditions

Escrow 

Monthly escrows for real estate taxes, property insurance, and replacement reserves

Transaction Costs

• Existing debt or purchase price
• Repairs not exceeding 15% of appraised value after completion
• Third-party reports (appraisal, engineering, phase I, and radon)
• First year MIP
• Financing and placement fees
• Borrower and lender legal fees
• Title, recording, and survey costs
• HUD application fee of 0.30%
• HUD inspection fee (greater of $30/bed or 1% of repair estimate)

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Non-recourse, supplemental financing for repairs, additions, and improvements of properties with existing FHA-insured loan.

Eligible Properties

Project must be insured under section 232 mortgage

Loan Features

• Low, fixed interest rates
• Non-recourse and fully assumable
• Eligible transaction costs, including certain owner elective repairs, are mortgageable
• Terms of first mortgage remain unchanged

Mortgage Loan Amount

Lesser of:

• 90% of eligible costs
• 90% of as proposed value less 90% of as is value (determined by lender ordered appraisal)
• 90% of stabilized value less all outstanding debt
• Minimum underwritten DSCR of 1.45x when combining first and supplemental mortgage debt service

Maximum Term

Coterminous with existing mortgage unless otherwise approved by HUD

Prepayment

Standard prepayment schedule is 10% in year one, stepping down 1% annually, however, alternative prepayment structures are available subject to market conditions

Escrow

• Working capital escrow of 4% of loan amount, unused portion will be returned to borrower
• Initial operating deficit calculated by HUD and accessible upon issuance of certificate of occupancy
• Minor movable equipment
• Monthly escrows for real estate taxes, property insurance, and replacement reserves are required

Transaction Costs

• Purchase price of land, buildings or existing debt
• Certified construction costs, bond premium, builder’s profit allowance, and other fees
• Architectural fees for design and supervision
• Appraisal, engineering, and environmental inspection reports
• MIP during construction
• Interest, insurance, and real estate taxes during construction
• Legal, organizational, audit, title & recording, and survey fees
• HUD application fee of 0.30% & HUD inspection fee of 0.50%
• FF&E – major fixed and movable items

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Non-recourse, fully assumable, streamlined refinance of existing FHA-insured loans.

Eligible Properties

Project must be insured under section 232 mortgage

Loan Features

• Low, fixed interest rates
• Non-recourse and fully assumable
• Refinance without exiting HUD Section 232 program

Mortgage Loan Amount

Lesser of:

• Original principal balance of existing insured mortgage
• Unpaid principal balance of the existing mortgage plus eligible transaction costs including certain owner elective repairs)
• 1.11x underwritten debt service coverage ratio

Maximum Term

If supported by property condition report, HUD may approve a term extension to the lesser of:

• 12 years beyond the remaining term of the existing mortgage
• Original loan term

Prepayment

Standard prepayment schedule is 10% in year one, stepping down 1% annually, however, alternative prepayment structures are available subject to market conditions

Escrow

Monthly escrows for real estate taxes, property insurance, and replacement reserves are required

Transaction Costs

• Existing debt
• Prepayment penalty
• Repairs (not exceeding 15% of appraised value after completion)
• Property condition report (if term extension is requested)
• First year MIP
• Financing and placement fees
• Borrower and lender legal fees
• Title, recording, and survey costs
• HUD application fee of 0.15%
• HUD inspection fee (greater of $30/bed or 1% of repair estimate)