Hospitals (Section 242)
Federal mortgage insurance to finance construction
or rehabilitation of public or private nonprofit and proprietary
hospitals, including major movable equipment.
Nature of Program:
HUD insures mortgages made
by private lenders to facilitate the construction or renovation of
acute care hospitals. Clients range in size from large urban
teaching hospitals to small rural hospitals. Critical Access
Hospitals (hospitals with 25beds or less which have received
designation by states and the Department of Health and Human
Services) are also eligible. Facilities must be properly licensed,
provide primarily acute patient care, and be able to demonstrate
the need for the project. Key program criteria include a maximum
loan-to-value of 90 percent, a loan term of 25 years, and funding
of a mortgage reserve fund. The term of the HUD-insured mortgage
for hospitals cannot exceed 25 years.
proprietary, and nonprofit acute care hospitals licensed or
regulated by the state.
Section 242 of the National Housing Act
(12 U.S.C. 1715z-7) and the Hospital Mortgage Insurance Act of
2003 (12 U.S.C. 1701). Regulations are at 24 CFR part 200, subpart
A, and part 242.
Assistant Secretary for Housing-Federal
Housing Commissioner, U.S. Department of Housing and Urban
Development, Washington, DC 20410-8000.
Office of Insured Health Care Facilities (202
On the Web:
Current Status: Active.
of HUD (2006)
For more information on how Danter and Associates can assist you
with the due diligence necessary for a loan application through
this program, please contact Terry Hall at (614) 221-9096
or at via email at