FHA 232/223(f) - Refinance or Purchase of Residential Healthcare Facilities

ELIGIBLE PROPERTIES:

Skilled nursing, assisted living, and other specialty residential care
facilities, or any combination thereof, which are at least 3 years old from
the date of initial occupancy. Moderate rehabilitation is permitted.
Commercial area shall not exceed 20% of the total net rentable area of
the project and commercial income shall not exceed 20% of effective
gross income.

MAXIMUM LOAN:
The lesser of the following criteria:

1. Depdending on the rental mix, the following DSCR and LTV ratios;

Refinance Transaction:

1. The existing indebtedness plus eligible transaction costs.

 Purchase Transaction:

1. 85%* of the eligible acquisition costs.

*LTVs and LTCs for nonprofits are 5% higher than shown above.

INTEREST RATES:
Fixed rate determined by market rates at the time of rate lock.

AMORTIZATION:
Up to 35-year, fully amortizing loan.

PERSONAL RECOURSE:
Non-recourse.

ASSUMABILITY:
Assumable, subject to CWCapital approval.

SUBORDINATE FINANCING:
Allowable, subject to FHA criteria.

PREPAYMENT:
Negotiable.

REPAIRS:
May not exceed 15% of the value after repaired. No more than one
major building system can be replaced. There are no prevailing wage
requirements.

PROFESSIONAL AND GENERAL LIABILITY INSURANCE:
Required in all cases. Minimum amount: $1M per occurrence /
$3M aggregate. Additional requirements apply.

ANNUAL MORTGAGE INSURANCE PREMIUM:
1.0% of the mortgage amount is payable at closing. Thereafter, the MIP is escrowed monthly based on a rate established by FHA. The rate is fixed at loan endorsement.

ESCROWS:
Monthly escrows for property insurance, real estate taxes, reserves for replacement, sinking fund (if applicable) and mortgage insurance premiums.

An initial deposit to replacement reserve and 100% of repair costs (both as determined by FHA) are escrowed from mortgage proceeds.  An additional 20% of the repair cost is required as a completion guarantee from the borrower.

ENVIRONMENTAL ISSUES:
Special rules apply for properties which are located in Flood Hazard Zones as designated by FEMA.

Lead-based paint and asbestos must be abated in accordance with FHA requirements.

FHA APPLICATION FEE:
0.3% of the requested mortgage amount is payable at the time application is made to FHA.

CWCAPITAL FEES:
Financing and Placement fees are negotiable. Additional costs vary
and include legal, third party reports, and other underwriting costs.

CLOSING EXPENSES:
Standard transaction costs, including legal fees, title insurance and survey.

OTHER FHA REQUIREMENTS:

Cash escrows or letters of credit are required for the following:

1. 20% of repair costs as a completion guarantee.
2. 2.5% of repair costs as a latent defects guarantee, due at completion of repairs.
3. Forecasted operating deficits (maximum of 18 months) to be released upon achievement of breakeven operations for 90 days.

STATE LICENSURE:
All loans must be licensed by the state or other governmental entity who has oversight responsibilities.

FHA PROCESSING TIME: 
One stage for FHA LEAN Processing Procedures:

1. Firm Commitment Stage: 30 days for review.

PRELIMINARY SUBMISSION PACKAGE:
Include the following in your request for a loan quote:

1. Property description and location map.
2. Number of beds with breakdown of proposed rents by payor source.
3. Current bed roll and year-to-date operating statement.
4. Operating history – prior 3 years, if available.
5. Current year operating budget.
6. Existing debt or purchase price.
7. Sponsor resume.

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This is a summary of general program terms, which are subject to change. This is not a commitment to lend.