Section 232 Loan Types
FHA offers several different types of loans under HUD Section 232 including new construction, purchase/refinance, substantial rehabilitation, refinance, supplemental loans, operating loan loss and fire safety equipment loans. The purpose of these loans is to finance long-term care and senior housing communities (skilled nursing, assisted living, intermediate care facilities and board and care homes).  The most frequently accessed loan types and terms are highlighted below.

232 - New Construction
Description
A Project qualifies as new Construction when all projects and construction elements are installed as part of the construction contact and no work been done prior to the issuance of the HUD firm commitment
Leverage Guidelines
Lesser of:
  • 90% of Total Estimated Replacement Cost
  • 80% of SNF and Existing ALF value, 75% of new ALF value
  • 1.4x DSCR
Terms and Amortization
The maximum loan term is 40 years or 75% of the remaining economic life of the property, whichever is less
Resource
Non-resource
Other
Davis Bacon prevailing wages
​To download a pdf of the Section 232 loan types, please click here.

Section II, Chapter 2 of HUD’s Healthcare Mortgage Insurance Program Handbook (4232.1) offers an in depth description of the Section 232 Loan types and eligibility requirements.

HUD Webinars
​To access HUD webinars on the Section 232 program, please click on the links below.

2021 - ORCF Webinar Presentation Focusing Primarily on Asset Management Matters
This webinar provides a brief overview of the Section 232 program and address some key asset management matters including
·       Understanding participants’ roles and responsibilities
·       Understanding how ORCF works with the Departmental Enforcement Center
·       Understanding Operator financial statement requirements
·       Understanding requirements for a change in Master Lease structure
·       Understanding the requirements for a change in type or level of care
·       Understanding the resumption of REAC inspections
·       Understanding NSPIRE and how it benefits the Borrower/Operator
·       Current event updates and responses to your questions

2020 - Section 232 Program Overview and ORCF's Response to COVID-19

This webinar provides a brief overview of the ORCF and discusses various issues brought on by the pandemic including discussion of relief options, financial treatment of loans and grants and changes in ORCF policy to adapt to the crisis.

2019 - Section 232:  Program Overview and Asset Management Document Updates

This webinar offers an overview about programs offered through ORCF and detailed information related to changes in the required HUD-published documents for use by borrowers and operators in performing asset management functions in their facilities.


To gain a high level understanding of the Section 232 loan process and HUD processing timeline, please click here.
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