In the search for viable financing options to meet the ever-increasing demand of senior housing projects, a somewhat unknown program is beginning to get attention, allowing many senior housing project developers, especially in the non-profit space, to exponentially increase their impact on senior housing.
The Assisted Living Conversion Program (ALCP) “provides grants to nonprofit owners to convert a portion of their units into an assisted living facility. Previously, properties that received ALCP grants were blocked from using FHA mortgage insurance through HUD’s Sec. 223(f) and Sec. 221(d)(4) programs.”
In other words, the Assisted Living Conversion Program allows for lenders to “tap these HUD programs to refinance or rehabilitate properties that have undergone a conversion through ALCP, so long as less than 75% of its units and residents receive assisted living services.” The benefit to those seeking conversions is that “they no longer have to fear that if they utilize ALCP to expand assisted living, future renovations or refinancings on the property will have to financed through non-HUD channels.”
The economic benefits of the Assisted Living Conversion Program cannot be understated, especially since 2000, HUD has provided 125 ALCP grants to more than 80 seniors housing properties, disqualifying them all for FHA insurance programs. Many notable non-profits have greatly benefitted
where, “National Church Residences, a nonprofit provider of affordable housing for seniors ranked No. 30 on the 2015 LeadingAge Ziegler 150, received its first ALCP grants in 2008 [and] these were to convert 34 units into assisted living at Hopeton Village in Chillicothe, Ohio and 32 units at Portage Trail Village in Cuyahoga Falls, Ohio. National Church Residences went on to apply for and receive two more ALCP grants in 2009 to incorporate more assisted living at each of the Ohio properties.”
For non-profits in this development sphere, the ongoing availability of the Assisted Living Conversion Program remains an important aspect of senior housing development and its continued vitality. As such, the ALCP remains a highly-watched program among senior housing developers, investors, and managers alike, with the hope and expectation that the U.S. Congress will continue to allow developers the ability to benefit and otherwise use such program.
Senior Housing providers are at a pivotal moment in time. Cambridge Realty Capital is versed in a variety of investments in the senior housing market. Our experience and expertise make us a leader in the investment world.