Program Descriptions
Program Number
14.128
Title
Mortgage Insurance-Hospitals
Federal Agency
HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Authorization
National Housing Act, as amended, Section 242; 12 U.S.C. 1715z-7; Public Law 108-091.
Status
Active
Objectives
To facilitate the affordable financing of hospitals for the care and treatment of persons who are acutely ill or who otherwise require medical care and related services of the kind customarily furnished only or most effectively by hospitals.
Types of Assistance
Guaranteed/Insured Loans.
Uses and Use Restrictions
HUD insures lenders against loss on mortgages. The loans may be used to finance the construction, modernization, equipment, or refinancing of acute care hospitals.
Eligibility Requirements
Applicant Eligibility
Qualified applicants can be either profit or not-for-profit hospitals licensed or regulated by the State, municipality, or other political subdivision. At least 50 percent of the care must be for general acute patients (this requirement has been eliminated for hospitals specifically designated as Critical Access Hospitals as part of Public Law 108-091).
Beneficiary Eligibility
Persons needing the services of these hospitals benefit by using the modernized facilities supported by the insured mortgages.
Credentials/Documentation
Documentation regarding the characteristics of the property and the qualifications of the mortgagor are assembled by the mortgagee and submitted with the application. A Certificate of Need from the appropriate State agency is needed if that State has a Certificate of Need process. This program is excluded from coverage under OMB Circular No. A-87.
Application and Award Process
Preapplication Coordination
Interested parties should contact the program office with information about the proposed project before preparing an application. This program is excluded from coverage under OMB Circular No. A-102. This program is eligible for coverage under E.O. 12372," Intergovernmental Review of Federal Programs." Recipients should consult the office or the official designated as the single point of contact in its respective State for more information on the process the State requires to be followed when funds are used for the planning or the construction (reconstruction or rehabilitation) of water or sewer facilities.
Application Procedure
The sponsor submits a formal application to the Office of Insured Health Care Facilities, Room 9224, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. This program is excluded from coverage under OMB Circular No. A-110.
Award Procedure
The Federal Housing Commissioner makes final decisions to approve, hold, or reject individual projects.
Deadlines
None.
Range of Approval/Disapproval Time
Processing time depends upon the complexity of the proposal and the degree of preparation by the sponsor.
Appeals
If an application for mortgage insurance is refused, the reasons for the refusal will be stated. The applicant may reapply.
Renewals
Assistance Considerations
Formula and Matching Requirements
The maximum mortgage amount may not exceed 90 percent of the estimated replacement cost of the hospital including the installed equipment. The mortgage insurance premium is based on one-half percent of the average monthly amortized unpaid principal balance for the forthcoming year. The combined HUD application and commitment fees are 0.3 percent of the mortgage amount. The HUD inspection fee may not exceed 0.5 percent of the mortgage amount.
Length and Time Phasing of Assistance
The mortgage term is 25 years.
Post Assistance Requirements
Reports
Defaults in meeting the mortgage terms must be reported. Mortgagors are required to submit annual audited financial statements to HUD. Approved mortgagors must furnish copies of their latest financial statements upon request by HUD.
Audits
The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor in order to determine their compliance and conformance with HUD regulations and standards.
Records
Mortgagees and mortgagors are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and FHA regulations. Records must be kept in accordance with State and Federal Regulations during the construction phase.
Financial Information
Account Identification
86-4077-0-3-371.
Obligations
(Mortgage insurance commitments) FY 07 est $846,348,500; FY 08 est 825,000,000; and FY 09 est $1,100,000,000.
Range and Average of Financial Assistance
$1,950,000 to $278,500,000; $71,911,778.
Program Accomplishments
HUD issued 9 insurance commitments for acute care hospitals in FY 2007. It is expected that approximately 7 new mortgages will be insured in FY 2008 through Section 242 and 241.
Regulations, Guidelines and Literature
Code of Federal Regulations (Housing and Urban Development) Part 200; Mortgage Insurance for Hospitals, (HUD Handbooks 4615.1; 4615.2) no charge.
Information Contacts
Regional or Local Office
None.
Headquarters Office
Office of Insured Health Care Facilities, Department of Housing and Urban Development, 451 7th Street, Room 9224, Washington DC 20410. Paul Giaudrone, Senior Financial Analyst. Telephone: (202)708-0599; E-mail: paul.a.giaudrone@hud.gov).
Web Site Address
http://www.fha.gov/hospitals
Related Programs
14.129, Mortgage Insurance-Nursing Homes, Intermediate CARE Facilities, Board And CARE Homes And Assisted Living Facilities
Examples of Funded Projects
Not applicable.
Criteria for Selecting Proposals
Not applicable.
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