	RAINMAKER MARKETING CORPORATION 281.537.1200

HUD-Insured Senior Housing Construction Loans...

If you are seeking to develop a rental senior housing community, then HUD-insured senior housing construction loans may be the ticket you are looking for because the program provides loan HUD, senior housing, construction loans, mortgages, Section, 232, 221, 223(f) insurance to approved HUD mortgagees so that the end loan will be non-recourse to the borrower.

But is the HUD-insured senior housing construction loan going to work for you? Here are the key issues:

If the project involves an entry fee or community fee then HUD will not underwrite the loan insurance and the proposal will be dropped by HUD because entry fee transactions are strictly prohibited.
In some markets, the HUD underwriting process means the application will take years to complete with the most likely result being a loss of market opportunity for the borrower. You must be prepared to provide additional working capital to cover the project carrying costs which may not be part of the HUD computed loan basis. This means you will likely experience reverse financial investment leverage as the process unfolds.
The HUD-insured loan requires that a member of the borrowing group have direct experience in the operations of senior housing projects. This means the property manager must be an equity participant in the transaction and you should pick your property manager accordingly.
You need a single-purpose entity to qualify for HUD underwriting. This means that syndications via the condominium real estate investment plan method and fractional tenants-in-common real estate ownership syndications cannot be used to raise the equity you need.

What do you get for putting up with all of this nonsense?

The FHA/HUD Section 232 Loan Insurance Program provides 40-year amortized non-recourse construction financing for projects licensed at the assisted living level or the skilled nursing level. The FHA/HUD Section 221 (d)(4) Loan Insurance Program provides the same terms for age-restricted senior housing apartments (independent living facilities - "ILFs") for for-profit developers while the FHA/HUD Section 221 (d)(3) program is the title that non-profit organizations must use.

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Do You Know The Secret?

When it comes to commercial real estate development finance, it doesn't matter whether you need to raise $5 million or $50 million, the out-of-pocket costs, advance fees and project due diligence costs will always require the same relative investment dollars the promoters have to fund. Do you know what that amount is? Do you know the Secret?

Rainmaker Marketing Corporation can trace its history back all the way to 1989. Incorporated in 1993, Rainmaker Marketing Corporation has evolved over time into a full-service business to business consulting firm. Rainmaker Marketing Corporation’s initial specialization was in issues and documentation needs corresponding to the capital funding cycle for commercial real estate development projects with a primary focus on senior housing and health care related properties. Today, Rainmaker Marketing Corporation serves all types of commercial income-producing property development program financing requests with a combination of feasibility studies, due diligence services, structured finance consulting and a focus on commercial real estate syndication services. Rainmaker Marketing Corporation’s service area includes all of the continental United States, Canada, Mexico and the Caribbean Basin.

281.537.1200

Email: consultants@rainmakermarketing.com

Commercial Real Estate Development Finance, Due Diligence Documentation, Syndication & Project Management Consulting

15519 Dawnbrook Drive, Houston, Texas 77068.