
HUD 232(f)
Section 232(f) provides FHA insured loans for residential care facilities, such as nursing homes, assisted living, and board & care facilities.
HUD 232(f) may be used for financing the purchase, refinance, construction, or substantial rehab of a project - or a combination of the above.
HUD Section 232(f) projects are processed using HUD's Lean Process, which employs standardized processes to obtain consistent and timely results.
HUD Overview: 232(f)

Eligible Properties
Licensed Nursing Homes, Assisted Living, Intermediate Care, and Board & Care
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Must provide continuous protective oversight
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Must offer three meals per day
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Facility must be licensed by the state
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Non-resident day care not to exceed 20% of gross area and 20% of gross income
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May include up to 25% non-licensed independent living units
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Three years must pass since last certificate of occupancy has been issued
Commercial Space
Limited to 20% of net rentable area and 20% of effective gross income
Borrower
Single asset, special purpose entity, either for profit or non-profit
Loan Term and Amortization
35 years (fully amortizing)
Recourse
Non-recourse
Interest Rate
Fixed for term of loan and determined by market conditions at the time of rate lock
Standard Loan Amount - Refinance
The lesser of:
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80% of fair market value (85% for non-profits)
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Amount that results in a debt service coverage ratio of 1.45x based on the underwritten Net Operating Income
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100% of FHA's allowable transaction costs (90% for non-profit)
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100% of FHA's allowable costs less grants, public loans, and tax credits
Standard Loan Amount - Acquisition
The lesser of:
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80% of fair market value (85% for non-profits)
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Amount that results in a debt service coverage ratio of 1.45x based on the underwritten Net Operating Income
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85% of FHA's allowable acquisition costs (90% for non-profits)
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100% of FHA's allowable costs less grants, public loans, and tax credits
Fees and Deposits
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Rate lock deposit - 0.5% refunded at closing