Owners and operators of the healthcare facilities, ranging from nursing homes to acute care hospitals to assisted living facilities, come from a range of backgrounds. Not infrequently, owners and operators have a background in healthcare administration that is invaluable in running the daily operations of a healthcare facility, but owners may sometimes lack a comprehensive understanding of healthcare facility financing. There are also many owners and operators that come from a finance background, but lack familiarity with the unique aspects of healthcare facility financing.
That’s where Cambridge Realty Capital comes in. As senior housing and healthcare property specialists, Cambridge understands and offers a variety of financing options, some of which you may have been previously unfamiliar with. Today, we’ll briefly discuss a few of the popular financing options offered by Cambridge.
HUD232 Lean Financing
Cambridge Realty Capital is one of the country’s leading HUD232 lenders and it is trending to continue this tradition for years to come. Not surprisingly, HUD232 financing is one of the most popular financing options for facilities that Cambridge Realty Capital works with. HUD232 loans are a joint project between the Federal Housing Authority and the Department of Housing and Urban Development, under which the FHA insures mortgage loans for “nursing homes, assisted living facilities, and board and care facilities.” Qualifying facilities benefit from these types of loans, since they incentivize lending because the loans are insured and if the borrower defaults, the lender isn’t left hanging.
The “lean” simply refers to HUD’s new push to follow lean business protocols, which are designed to expedite and streamline business operations, and, in the case of HUD232, loan applications and decisions. The move towards lean processes makes the HUD232 process more transparent and less bureaucratic, which benefits the borrower.
Sale-and-leaseback financing is a popular option for those who prefer to focus on operating their facility rather than what can sometimes be a constant struggle to maintain sufficient working capital. In this structure, Cambridge Realty Capital purchases the property and leases that property to the operator through a long-term agreement. Often, the facility property is purchased from a third-party, which allows the operator to maintain cash-reserves that would otherwise be tied up in a down-payment. Other times, the property may be purchased from an operator that owns the facility, but would rather transition into a lease arrangement in order to free up more capital.
Conventional Debt Mortgage Financing
Variety in financing allows the borrower and Cambridge Realty Capital to work together to find the right option. Sometimes the right option is the simplest one: conventional financing. Conventional mortgages are not insured by the FHA, but are also not beholden to sometimes stringent FHA lending requirements, allowing flexibility in structuring the loan. Cambridge Realty Capital offers conventional mortgage loans as well as refinancing and construction loans.
Let’s Talk About Your Options
Let Cambridge Realty Capital fill in the knowledge gap and help you understand all of your financing options and evaluate which is best for your facility.