The primary focus of the program is to help those hospitals that have seen the cost of borrowing increase as a result of the demise of AAA bond insurance, downgrades of commercial bank and the disappearance of financing alternatives, according to the release.
Previously, hospitals could only get FHA insurance on loans that included a substantial construction component such as replacing, rebuilding or renovating existing structures.
Since 1969, the FHA has insured 367 loans to hospitals totaling $14.9 billion. Currently, there are 87 active loans with a total principal balance of $7.3 billion. The average loan size is $96 million, and the principal balances of individual loans in the portfolio range from $1.9 million to $756 million, according to the release.
HUD will begin accepting accept refinancing applications immediately and anticipates that full applications will start to be received in August and, following application review, insurance commitments for refinancing will start to be issued in October.
Read the HUD release on the FHA hospital refinancing insurance.
