On September 27, 2019, the Office of Healthcare Programs published Housing Notice 2019-10. This notice offers several incentives to encourage greater development of nursing homes, assisted living facilities, board and care facilities and hospitals located in Opportunity Zones.
Effective immediately, the Federal Housing Administration (FHA) is giving priority to Section 232 applications for facilities located in qualified Opportunity Zones. Most notably, FHA will provide expedited underwriting for Section 232 applications. FHA is also reducing application/exam fees for all Section 242 and Section 232 transactions for facilities in Opportunity Zones.
Investing in specially-designated Opportunity Zones (generally distressed areas nominated by each state’s governor) through Qualified Opportunity Funds can yield substantial additional returns on investment in the form of tax savings. MMM's Litigation, Tax, Real Estate, Finance and Corporate teams work together to stay on top of new developments and provide practical and timely solutions.
The HUD Section 232 loan program may be used toward the financing, the purchase, refinancing, new construction or substantial rehabilitation of an assisted living facility, memory care center, skilled nursing training, intermediate care center and other hospital projects. A combination of these uses is acceptable (e.g., refinance of a nursing home coupled with new construction of an assisted living facility). The 232 loan program provides financing with up to 80% leverage and up to 100% of transaction costs for refinance with up to a 35-year fixed rate term. These loans are non-recourse and assumable.
MMM attorneys have considerable experience in Healthcare and Opportunity Zones, as well as extensive experience handling 232 loans and servicing of such loans on behalf of both lenders/servicers, borrowers and operators of such programs. For additional details, please contact one of the MMM partners listed on the right.