New Construction / Substantial Rehabilitation financing for:

• Assisted Living / Board & Care Homes

• Skilled Nursing / Intermediate Care Facilities

Single asset borrower may be comprised of:

• For-Profit Sponsor

• Nonprofit Sponsor

• Public Entity Sponsor (Nursing homes only)

New Construction of:

• Proposed nursing home or intermediate care facility, which consists of at least 20 beds, and:

- Is licensed or regulated by the State, municipality or other political subdivision in which the facility is located,

- Corresponds to the Department of Health and Human Services “Skilled Nursing Facility” (SNF) or ”Intermediate Care Facility (ICF), and

- Has obtained a Certificate of Need from the State agency with jurisdiction, or is supported by a State commissioned independent study of market need and feasibility.

• Proposed board and care home or assisted living facility, which consists of at least 5 beds, and:

- Is licensed or regulated by the State, municipality or other political subdivision in which the facility is located,

- Which offers three meals per day to each resident, and

- Provides room, board, and continuous protective oversight.

Substantial Rehabilitation - must meet one of the following criteria:

• Cost of repairs, replacements, improvements (including major movable equipment) and additions exceeds 15% of the project’s value after completion of all repairs, replacements, improvements and additions, or

• Two or more major building components are being substantially replaced.

Commercial space is permitted, limited to:

• 10% of gross floor area of the project (commercial space that exclusively serves the residents of the facility is not counted), and

• 15% of gross income of the project.

New Construction – the lesser of:

• 90% (95% for nonprofits) of value including major movable equipment, and

• Loan supportable by 90% (95% for nonprofits) of net earnings attributable to realty and equipment (excluding proprietary earnings).

Substantial Rehabilitation – the lesser of:

• Loan amount determined by above criteria for new construction, and

• If property is owned:

- 100% of cost of rehabilitation, plus

- the lesser of existing secured indebtedness or 90% (95% for nonprofits) of existing value before rehabilitation, or

• If property is to be acquired:

- 90% (95% for nonprofits) of cost of rehabilitation, plus

- 90% (95% for nonprofits) of the lesser of purchase price or existing value before rehabilitation.

• Loan Term – construction period plus up to 40 years.

• Fully amortizing loan, no balloon payment.

• Non-recourse during both construction and permanent loan phases.

• Loan is fully assumable by new owner.

• Rate is fixed for entire loan term prior to initial loan closing.

• No lease-up hurdle is required for conversion to permanent loan.

• Program may be used to credit enhance tax exempt bonds.

• Secondary financing, including grants and tax credits, is permitted in conjunction with the FHA-insured loan to cover certified project costs in excess of 100% of value or replacement cost if provided by a Federal, State or local governmental authority or instrumentality.

• Davis-Bacon prevailing wage requirements apply to costs of new construction or rehabilitation.

• Leased facilities (operating lease) to qualified operators are permitted.

• Medicaid rates will be used in underwriting the income estimate for 67% of the nursing home/intermediate care beds and Medicare rates will be used for 3% of the beds (not applicable to board and care or assisted living).

• In underwriting net earnings, management fees are excluded from expenses; however, a proprietary income amount (varying by level of care) is deducted.

Please provide the following information for a preliminary loan quote:

• Brief description of proposed improvements including number of units/beds with breakdown of rents by unit/bed type.

• Development or rehabilitation budget, including equipment to be financed.

• Pro forma income and expenses for completed project, including identification of payor sources and their corresponding reimbursement rates.

• Copy of most recent mortgage statement, with escrow balances, for property owned, or copy of purchase contract for property to be acquired.

• Any available market studies, appraisals or environmental reports.

• Names of sponsor, developer, management agent, operator, general contractor, architect, etc.; resumes if available.

• Site plan, unit floor plans, elevations, survey, architectural drawings, etc. to the extent available.