New Construction / Substantial Rehabilitation financing for:

• Hospitals / Acute Care Facilities

Single asset borrower may be comprised of:

• For-Profit Sponsor

• Nonprofit Sponsor

• Public Entity Sponsor

New construction (or replacement) and equipping of acute care hospital:

• Licensed or regulated by the State, municipality or other political subdivision in which the facility is or is to be located,

• Which provides community service for inpatient medical care of the sick or injured (including obstetrical care),

• Not more than 50% of the total patient days of which during any year are customarily assignable to the categories of chronic convalescent and rest, drug and alcohol, epileptic, mentally deficient, mental, nervous and mental, and tuberculosis, unless the facility is a critical access hospital, and

• No work has been done to the site prior to initial loan closing (unless early start has been approved).

Substantial Rehabilitation includes rehabilitation of a hospital, the addition of new facilities or equipment, or the rehabilitation or replacement of a portion of an existing hospital structure:

• Where the cost of new improvements is equal to at least 10% of the mortgage amount and the combined cost of new improvements and equipment is equal to at least 20% of the mortgage amount.

• Up to 80% of the mortgage loan can be used to refinance existing secured indebtedness.

New Construction – the lesser of:

• 90% of replacement cost including equipment and furnishings,

• Loan supportable at 1.40x debt service coverage,

• 100% of total replacement cost, including equipment and furnishings, minus the amount of any loans, grants or gifts from other sources which are of a nature that is intended to offset cost and mortgage financing.

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% of existing value before rehabilitation;

• If property is to be expanded:

- the lesser of existing secured indebtedness or 90% of the value of the existing facilities, plus

- the cost of new improvements, including equipment, closing charges, fees, etc., plus

- 90% of the lesser of the cost of additional land or “as is” value of additional land; or

• If property is to be acquired:

- 90% of cost of rehabilitation and new equipment, plus

- 90% of the lesser of purchase price or existing value before rehabilitation.

• Loan Term – construction period plus up to 25 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 operational threshold is required for conversion to permanent loan.

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

• Secondary financing is permitted in the form of a Surplus Cash Note (Residual Receipts Note for nonprofits).

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

• An amount to make project operational (AMPO) is available in the mortgage for nonprofit borrowers.

• No equity take-out is permitted.

Please provide the following information for a preliminary loan quote:

• Brief description of the proposed new hospital, rehabilitation, replacement, expansion or recapitalization of existing hospital.

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

• Pro forma revenue and expenses for completed project, identification of payor sources and their corresponding reimbursement rates; overview of the services (to be) offered, including inpatient, outpatient and long-term care.

• Statement of existing secured indebtedness, with escrow balances, for property owned, or copy of purchase contract for property to be acquired.

• For existing hospital, last three years, and year-to-date income and expense statements and balance sheets.

• Any available relevant market studies, business plans, consultant 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.