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HUD 232 loans are used to finance existing and new construction of residential care facilities, such as assisted living and memory care facilities. These loans are available through Howell Investment Finance.

What Kind of Properties Are Eligible?

Because the definition of residential care facilities is rather broad, those applying for section 232 loans must meet specific guidelines. The facility must provide continuous care to residents with a minimum of 20 beds per facility. Care homes must also be properly licensed by the appropriate entity. For states with Certificate of Need programs, which are necessary to approve the building of new healthcare facilities, approval must be gained before a HUD 232 loan is provided.

What Are the Features of These Loans?

HUD 232Section 232 loans can be used for new construction as well as refinancing and the improvement of existing facilities. Borrowers may be approved for a fixed rate loan with terms ranging from 35 years up to 40 years (new construction). Additionally, eligible borrowers could receive as much as 80 Loan to Value (LTV) or up to 90% of the Loan to Cost (LTC) when applying for these loans. As a non-recourse loan, borrowers do not sign personally for the loan and there is no need for tax returns or global finances.

What Can I Expect During the Application Process?

The positive news is that HUD 232 loan terms are not competitive. However, borrowers do need to undergo an exhaustive application process — the first step of which is pre-application. After this process, it will be determined whether the minimum requirements are met. If so, borrowers must complete and submit the total application, along with other documentation. Several factors will be considered, including community resources, whether there is a genuine need for such a facility in a given area, and zoning issues. 

With their considerable knowledge, Howell Investment Finance located in Ames, IA,  will help you make sense of the many complexities involved with HUD 232 loans. They will also help you secure funding for many other commercial properties, including multifamily structures and hotels. They offer more than two decades of experience and have been integral in negotiating contracts from $1 million to over $30 million. If you need help with financing investment properties, call (515) 233-8228 for assistance. You can also learn more about loan types by visiting them online

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