Is HUD Financing Available for Assisted Living Facilities?
HUD 232 and 232/223(f) loans offer some of the highest-leverage, non-recourse financing options available for assisted living facilities.
Better Financing Starts with More Options$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get QuotesWith around 30,000 assisted living communities in the U.S catering to north of 800,000 Americans, there is plenty of reason for investors to pay attention to the assisted living facility sector. Advancements in healthcare and growing life expectancy have led to rising demand for assisted living communities.
While there are many options for financing an assisted living community, the U.S. Department of Housing and Urban Development backs loans with some of the most competitive terms out there. That's true whether you're buying, developing, or refinancing a facility.
Two of HUD's loan programs are frequently tapped for these types of investments: the HUD 232 and 232/223(f) programs. This article walks through both.
HUD 232 Loans for the Construction of Assisted Living Facilities
Section 232 of HUD's mortgage insurance programs provides insurance for mortgages for the construction or substantial rehabilitation of senior housing communities — including assisted living facilities, skilled nursing, and memory care.
Section 232 loans have fixed-rate terms of up to 35 years and are fully amortizing. Loans start at $2 million and are available for facilities with as few as 20 residents.
Loan Program Highlights
Up to 90% leverage for profit-motivated sponsors (95% for nonprofit)
1.11x DSCR for for-profit sponsors (1.05x for nonprofit)
Up to 35 years of fixed interest with full amortization
Assumable subject to HUD approval
Competitive pricing
HUD 232/223(f) Loans for Refinancing or Acquiring Assisted Living Facilities
HUD Section 232/223(f) provides mortgage insurance for the refinance or acquisition of assisted living facilities and other senior housing and healthcare properties such as skilled nursing facilities. These long-term, fixed-rate loans start at $2,000,000 with leverage available up to 80% of the property value.
Loan Program Highlights
Up to 80% leverage for profit-motivated sponsors (85% for non-profit)
Up to 35 years fixed interest and fully amortizing
Assumable (subject to HUD approval)
Competitive pricing
How Do I Get a HUD Loan for an Assisted Living Facility?
This is the easy part. Just drop your details in the form below, and we'll be in touch with free quotes on getting your next assisted living facility investment financed.
Related Questions
What are the requirements for HUD financing for assisted living facilities?
HUD financing for the refinance or acquisition of assisted living facilities requires up to 80% leverage for profit motivated sponsors (85% for non-profit) and a 1.45x minimum debt service coverage ratio. The loan is up to 35 years fixed and fully amortizing, assumable subject to HUD approval, and has competitive pricing. Source
HUD financing for the construction of assisted living facilities requires up to 90% leverage for profit-motivated sponsors (95% for non-profit) and a 1.11x DSCR for for-profit sponsors (1.05x for non-profit). The loan is up to 40 years fixed and fully amortizing, assumable subject to HUD approval, and has competitive pricing. Source
What are the benefits of HUD financing for assisted living facilities?
HUD financing for assisted living facilities offers a variety of benefits, including up to 90% leverage for profit-motivated sponsors (95% for non-profit), 1.11x DSCR for for-profit sponsors (1.05x for non-profit), up to 40 years fixed and fully amortizing, assumable subject to HUD approval, and competitive pricing. Source
What types of HUD financing are available for assisted living facilities?
Yes, HUD financing is available for assisted living facilities. HUD offers the 232/223(f) loan program, which provides up to 80% leverage for profit motivated sponsors (85% for non-profit) and up to 35 years fixed and fully amortizing. The loan is assumable subject to HUD approval and offers competitive pricing. For more information, please visit this page.
How do I apply for HUD financing for assisted living facilities?
Yes, HUD financing is available for assisted living facilities. To apply for HUD financing, you can fill out the form on this page. HUD financing for assisted living facilities is provided through the HUD 232/223(f) program. Highlights of this program include:
- Up to 80% leverage for profit motivated sponsors (85% for non-profit)
- 1.45x minimum debt service coverage ratio
- Up to 35 years fixed and fully amortizing
- Assumable subject to HUD approval
- Competitive pricing
What are the eligibility criteria for HUD financing for assisted living facilities?
HUD financing for assisted living facilities is available for both construction and refinance/acquisition. The eligibility criteria for HUD financing for assisted living facilities depends on the type of loan. For construction loans, the leverage is up to 90% for profit-motivated sponsors (95% for non-profit) and the debt service coverage ratio (DSCR) is 1.11x for for-profit sponsors (1.05x for non-profit). For refinance/acquisition loans, the leverage is up to 80% for profit motivated sponsors (85% for non-profit) and the minimum debt service coverage ratio is 1.45x. Both loan types have up to 40 years fixed and fully amortizing terms and are assumable subject to HUD approval. For more information, please visit www.hud.loans/hud-loans-blog/is-hud-financing-available-for-assisted-living-facilities.
What are the advantages of HUD financing for assisted living facilities compared to other financing options?
HUD financing for assisted living facilities offers several advantages compared to other financing options. These include up to 90% leverage for profit-motivated sponsors (95% for non-profit), 1.11x DSCR for for-profit sponsors (1.05x for non-profit), up to 40 years fixed and fully amortizing, assumable subject to HUD approval, and competitive pricing. Source