# Mortgage Insurance for Hospitals 

**Directive Number:** **4615.1**

[Mortgage Insurance for Hospitals 1](#mortgage-insurance-for-hospitals)

[CHAPTER 1. GENERAL FEATURES OF THE HOSPITAL INSURANCE PROGRAM
5](#chapter-1.-general-features-of-the-hospital-insurance-program)

[1-1. INTRODUCTION 5](#__RefHeading___Toc173136087)

[1-2. PROGRAM AUTHORIZATION 6](#__RefHeading___Toc173136088)

[1-3. ELIGIBLE HOSPITALS 6](#__RefHeading___Toc173136089)

[1-4. ELIGIBLE MORTGAGORS AND SPONSORS 7](#__RefHeading___Toc173136090)

[1-5. HUD SUPERVISION 8](#__RefHeading___Toc173136091)

[1-6. MORTGAGE FINANCING 8](#__RefHeading___Toc173136092)

[1-7. MORTGAGE TERMS 10](#__RefHeading___Toc173136093)

[1-8. FINANCING CHARGES 11](#__RefHeading___Toc173136094)

[1-9. PHYSICAL GUIDELINES 12](#__RefHeading___Toc173136095)

[1-10. EVALUATION AND PROCESSING OF PROPOSALS
12](#__RefHeading___Toc173136096)

[CHAPTER 2. HEW PROCESSING AND PROCEDURES
12](#chapter-2.-hew-processing-and-procedures)

[2-1. INFORMATION TO BE FURNISHED 12](#__RefHeading___Toc173136098)

[2-2. PROJECT DESCRIPTION AND PRELIMINARY INFORMATION
13](#__RefHeading___Toc173136099)

[2-3. REVISED APPLICATION: THE AGREEMENT
23](#__RefHeading___Toc173136100)

[2-4. REVISED APPLICATION OR EQUIPMENT: COMPLETION OF PROJECT
23](#__RefHeading___Toc173136101)

[2-5 DESIGN OF THE PROJECT AND CONTRACT REQUIREMENTS
23](#__RefHeading___Toc173136102)

[2-6. BIDS, AWARDS, CONTRACTS, AND MODIFICATIONS
30](#__RefHeading___Toc173136103)

[2-7. PROPRIETARY FACILITIES 31](#__RefHeading___Toc173136104)

[2-8. CONSTRUCTION OF THE BUILDING 31](#__RefHeading___Toc173136105)

[2-9. PRECONSTRUCTION CONFERENCE 31](#__RefHeading___Toc173136106)

[2-10. ALLOWABLE AND NONALLOWABLE COSTS
32](#__RefHeading___Toc173136107)

[2-11. LABOR STANDARDS 32](#__RefHeading___Toc173136108)

[2-12. COMPLETION DATE 32](#__RefHeading___Toc173136109)

[2-13. POSTCONSTRUCTION OPERATIONS 33](#__RefHeading___Toc173136110)

[2-14. INCOMPLETE OFF-SITE AND ON-SITE FACILITIES
33](#__RefHeading___Toc173136111)

[2-15. EQUIPMENT 33](#__RefHeading___Toc173136112)

[CHAPTER 3. HUD PROCESSING AND PROCEDURES
36](#chapter-3.-hud-processing-and-procedures)

[3-1. FORMAL APPLICATION 36](#__RefHeading___Toc173136114)

[3-2. HEW FINAL APPROVAL LETTER 37](#__RefHeading___Toc173136115)

[3-3. COMMITMENT 38](#__RefHeading___Toc173136116)

[3-4. INSURANCE OF ADVANCES 40](#__RefHeading___Toc173136117)

[3-5. INSURANCE UPON COMPLETION 46](#__RefHeading___Toc173136118)

[3-6. OPERATION OF HOSPITAL 46](#__RefHeading___Toc173136119)

[3-7. CORRESPONDENCE AND DOCUMENTS 47](#__RefHeading___Toc173136120)

[3-8. COMBINATION FINANCING 47](#__RefHeading___Toc173136121)

[APPENDIX 1 50](#appendix-1)

[APPENDIX 2 52](#appendix-2)

[APPENDIX 3 52](#appendix-3)

[APPENDIX 4 54](#appendix-4)

[APPENDIX 5 59](#appendix-5)

[APPENDIX 6 61](#appendix-6)

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

CIRCULAR 4615.1

January 30, 1973

SUBJECT: Mortgage Insurance For Hospitals Handbook

1\. This Circular Transmits:

HUD Handbook 4615.1, Section 242, Mortgage insurance for Hospitals.

2\. Purpose:

Except for basic underwriting instructions applicable to all mortgage

insurance programs, this handbook contains complete information for

mortgagors, sponsors, mortgagees, HUD and HEW field personnel and

other interested parties.

3\. Applicability:

This Handbook contains rules, regulations and policy matters in

effect as of December 31, 1972.

4\. Cancellations:

The following issuances are cancelled:

Guide - HPMC-FHA G 4447.3 - Mortgage Insurance for Hospitals

(Section 242)

HPMC-FHA G 4447.3 - Revision to Mortgage Insurance for

Change 1 Hospitals

Circular - HPMC-FHA 4447.4 - Appraisal Assistance to HEW under

Section 242 Hospital Program

dated October 5, 1972

1\. This Notice Transmits:

Change to Handbook 4615.1, Mortgage Insurance for Hospitals.

2\. Explanation of Material Transmitted:

Appendix 7 to the Hospital Handbook, dated 1/30/73, was inadvertently

omitted.

3\. Filing Instructions:

Remove Insert

Page ii, Table of Contents, Page ii, Table of Contents,

dated 1/73 dated 3/73

Appendix 7, dated 3/73

1\. This Transmits:

Change to Handbook 4615.1, Mortgage Insurance for Hospitals, dated

12/78.

2\. Explanation of Changes:

Paragraph 3-2h(2) has been changed to effect the changes in the

review and monitoring procedures relative to the Field Offices.

3\. Filing Instructions:

Remove: Insert:

Handbook 4615.1 Handbook 4615.1 CHG

Pages 3-3 & 3-4 dated 1/73 Page 3-3 dated 12/78

Page 3-4 dated 1/73

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Assistant Secretary for Housing

\- Federal Housing Commissioner

W-1, W-2, W-3,W-3-1, W-4, R-1, R-2, R-3, R-3-1 (HM)

R-3-2, R-4, R-4-1, R-4-2, R-5, R-5-1, R-5-2

W-1 Assistant Secretaries, Deputy Assistant Secretaries,

General Counsel, staff offices reporting to the Secretary

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

W-4 Branch Chiefs, multiple copies for staff

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-1 Bulk shipment to Regional Offices for selective

distribution by program area

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

1\. This Transmits:

Changes to Handbook 4615.1, Mortgage Insurance for Hospitals,

dated 1/73.

2\. Explanation of Change:

Paragraph 3-4b(1)(b) has been changed to modify disbursement

procedures under the Section 242 hospital program to allow 100

percent payoff of completed contracts awarded under construction

management procedures pursuant to HEW request.

3\. Filing Instructions:

Remove: Insert:

Handbook 4615.1 Handbook 4615.1 CHG

Page 3-7 and 3-8 Pages 3-7 and 3-7.1 dated 6/80

dated 1/73 Page 3-8 dated 1/73

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Assistant Secretary for Housing

\- Federal Housing Commissioner

1\. This Transmits

Change to Handbook 4615.1, Mortgage Insurance for Hospitals, dated

1/73.

2\. Explanation of Material Transmitted:

Previous paragraph 3-8 re-numbered to 3-9 and a new paragraph 3-8

added. The new paragraph describes combination financing (tax exempt

bonds coupled with GNMA mortgage backed securities) and incorporates

the 1981 statute provision concerning increased mortgage amounts.

3\. Filing Instructions:

Remove Insert

Handbook 4615.1 Handbook 4615.1 CHG

Table of Contents Page i, Table of Contents page i,

dated 1/73 dated 5/82

Table of Contents, Page ii, Table of Contents page ii,

dated 3/73 dated 3/73

Pages 3-13 thru 3-16 dated 1/73 Page 3-13 dated 1/73

Pages 3-14 thru 3-16 dated 5/82

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

General Deputy Assistant Secretary for Housing

\- Deputy Federal Housing Commissioner

1\. This Transmits

Revision to HUD Handbook 4615.1, Mortgage Insurance for Hospitals

(Section 242) dated 1/73.

2\. Explanation of Material Submitted:

Paragraph 2-5(c) 2 has been revised to incorporate new bonding

requirements.

3\. Filing Instructions:

Remove Insert

Handbook 4615.1 Handbook 4615.1 CHG

Pages 2-17 and 2-17 A Pages 2-17 and 2-17A dated

dated 1/77 5/84

Page 2-18 dated 1/73 Page 2-18 dated 1/73

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Assistant Secretary tor Housing

\- Federal Housing Commissioner

MORTGAGE INSURANCE

FOR

HOSPITALS

(SECTION 242)

JANUARY 1973

PROGRAM PARTICIPANTS

AND

HUD STAFF

A HUD HANDBOOK

HOUSING PRODUCTION AND MORTGAGE CREDIT-FEDERAL HOUSING ADMINISTRATION

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, D. C. 20410

O-3, R-1, R-2, R-3, R-3-2, R-4,

R-5, R4FA, W-1, W-2, W-3-1

(Special Distribution to HEW Regional Offices)

R-1 Regional Administrators, Deputy Regional Administrators

R-2 Office Directors, Principal Assistants in Regional

Administrators\' offices

R-3 Bulk shipment to Regional Offices

R-3-2 Directors, Administrative Services Divisions and

Administrative and Management Services Divisions, and

Administrative staffs

W-1 Assistant Secretaries, Deputy Assistant Secretaries,

General Counsel, staff offices reporting to the Secretary

W-2 HQ Office Directors, Special Assistants,

those reporting directly to Assistant Secretaries

W-3-1 Directives Management Officers\--Headquarters and Regions,

library, ACIR (Advisory Commission on Intergovermental

Relations)

Mortgage Insurance for Hospitals

Directive Number: 4615.1

#  CHAPTER 1. GENERAL FEATURES OF THE HOSPITAL INSURANCE PROGRAM

[]{#__RefHeading___Toc173136087 .anchor}**1-1. INTRODUCTION**.
[\<TOP\>](#_top) There are serious demands for increasing utilization

of modern health facilities today. Many existing hospitals

are in need of extensive expansion and modernization. Although

much nonprofit hospital construction has been made possible with

direct Federal assistance under the Hill-Burton Act, and many

nonprofit groups have been able to assist hospitals through fund

raising drives and similar efforts, these sources have been

inadequate to fund all the nonprofit facilities needed. One

source that had not been utilized to its full potential for both

nonprofit or proprietary facilities, until enactment of the

insured mortgage program for hospitals, was long-term financing

at reasonable terms.

a\. This program provides mortgage insurance for loans to qualified

applicants to build new facilities or modernize existing

ones, and can also be used in nonprofit proposals to supplement

Hill-Burton grants or HEW guaranteed loans for the same

purpose.

b\. Inquires concerning HUD mortgage insurance for hospitals

may be made to the Director of the HUD Office; the regional

office of the Department of Health, Education and Welfare,

or the State Hill-Burton Agency, in the area where the

proposed project is to be located (see list of HEW regional

and State Agency offices in Appendices 5 and 6. Advice

on professional and technical matters relating to hospital

plans and proposals may be obtained by writing or visiting

the HEW Regional Office.

[]{#__RefHeading___Toc173136088 .anchor}**1-2. PROGRAM AUTHORIZATION**.
[\<TOP\>](#_top) The Housing and Urban Development Act of

1968 added a new Section 242 to Title II of the National Housing

Act, which authorizes the Secretary of HUD to insure mortgage

loans financing the construction or rehabilitation of, and the

purchase of major movable equipment for, nonprofit hospital

facilities. The Housing and Urban Development Act of 1970 amended

Section 242 to allow proprietary facilities. The Secretary has

delegated to the Assistant Secretary for Housing Production and

Mortgage Credit-Federal Housing Commissioner (HPMC-HUD-FHA) the

authority to administer the program. By formal agreement between

the Secretaries of HUD and HEW, the responsibility for making a

determination as to the feasibility of a proposal, as well as

inspections during the construction of a facility, has been

delegated to HEW, which is acting as an agent of HUD.

[]{#__RefHeading___Toc173136089 .anchor}**1-3. ELIGIBLE HOSPITALS**.
[\<TOP\>](#_top)

a\. Type of hospital. Under this program hospital refers to a

facility:

\(1\) Which provides community service for inpatient medical

care of the sick or injured;

\(2\) Which has not more than 50 per centum of the total

patient days during any year assignable to the categories

of chronic convalescent and rest, drug and alcoholic,

epileptic, mentally deficient, mental, nervous and

mental, and tuberculosis, and;

\(3\) Which is a proprietary facility, or facility of a

private nonprofit corporation or association, licensed

or regulated by the State (or if there is no State law

providing for such licensing or regulation by the State,

by the municipality or other political subdivision in

which the facility is located).

b\. Certificate of Need. The law does not permit the Assistant

Secretary-FHA Commissioner to insure a mortgage under this

program unless he has received from the State agency

(Appendix 6) designated in accordance with Section 604(a)(1)

of the Public Health Act for the State in which the hospital

is to be located a Certificate of Need, FHA Form 2576

(Hospital) (Appendix 2).

c\. Group practice. The law provides that encouragement shall be

given to group practice sponsors seeking mortgage insurance

for hospitals as defined in a. above.

[]{#__RefHeading___Toc173136090 .anchor}**1-4. ELIGIBLE MORTGAGORS AND
SPONSORS**. [\<TOP\>](#_top) The mortgagor (borrower) is

the organization or entity that owns the property which is the

Security for the mortgage insured by HUD. The sponsor is the

organization or entity that initiates and promotes the development

of the facility. The sponsor, if it meets the nonprofit

requirements, may qualify as the mortgagor, or it may set up a

separate entity for the purpose of qualifying as a mortgagor.

a\. Types of mortgagors. Two types of mortgagors may qualify

for a HUD insured mortgage under the program.

\(1\) A proprietary (profit-motivated) mortgagor may be a

corporation, partnership, trust, individual, or any

other qualified legal entity. It is expected that such

hospital will have a board of directors or trustees to

include community and consumer participation.

\(2\) A nonprofit mortgagor must be a nonprofit corporation

or association. The law specifically requires that no

part of the net earnings of the mortgagor shall inure

to the benefit of any private shareholder or individual.

The sponsor, if different from the mortgagor, must also

be a bona fide nonprofit entity which meets the same

test.

b\. Continuity of Mortgagor. The mortgagor must show that it

has the continuity of organization needed for this long term

mortgage program. For new organizations, or those whose

continuity is necessarily dependent upon an individual or

individuals, broad community participation will be required.

A proposal in which the mortgagor is controlled in any

manner by the professionals practicing in the hospital will

not be eligible.

[]{#__RefHeading___Toc173136091 .anchor}**1-5. HUD SUPERVISION**.
[\<TOP\>](#_top) The operation of the project will be supervised

by HUD through a regulatory agreement. A complete annual

financial statement will be required to be submitted to HEW at

the end of each fiscal year. Mortgagors owning other health

facilities in addition to the hospital, with a central purchasing

system, may prorate expenses for materials, supplies, salaries,

etc. Although no specific form of accounts is required, it is

suggested that the Chart of Accounts for Hospitals, which is

published by the American Hospital Association, be used as a

guide.

a\. The mortgagor will be required to operate the project as a

hospital as long as the property continues to be subject to

a HUD insured mortgage. The mortgage shall not be prepaid

in full prior to its maturity except under such terms and

conditions as may be approved by HUD. In granting approval

for such prepayment, HUD may require assurances from the

mortgagor of continued operation of the project as a

hospital for a specified period of time.

b\. The regulatory agreement with the mortgagor (FHA Form 2466

or 2466GP) requires that neither the use of the property nor

the services of the professional or other personnel shall be

denied to anyone on the basis of race, color, creed or

national origin. The mortgagor will be required to comply

with local laws and ordinances prohibiting discrimination.

c\. Operating fund. The mortgagor must be financially able to

meet the expenses of the project for such period as HEW

estimates is necessary to establish a self sustaining operation.

HEW may require the establishment of an operating fund

to meet an anticipated operating deficit. The need for, and

size of the fund will be determined by HEW based on the

specific proposal being considered. HEW will indicate to

HUD the amount of the operating fund (if any) under the

remarks section of the HEW Final Approval Letter.

d\. Leasing of a hospital in its entirety is not contemplated

under this program. Any proposal in which leasing of the

entire facility is a factor will be handled on a case-by-case

basis. Any leasing or contractual arrangements must be

stated in detail and approved prior to filing application

for mortgage insurance. Leasing of a nonprofit facility to

a proprietary entity will not be considered.

[]{#__RefHeading___Toc173136092 .anchor}**1-6. MORTGAGE FINANCING**.
[\<TOP\>](#_top) The sponsor is responsible for locating a

source for the required mortgage funds (both for construction

financing and permanent investment). It is important that

tentative arrangements for financing be made during the early

development of the proposal in order to avoid the unnecessary

expenditure of time, effort and money in the event mortgage funds

are not available. It is suggested that, immediately upon a

decision being made to use this program, the sponsor communicate

with the HUD office for a list of approved mortgagees (lenders).

a\. Although HUD may not recommend a specific source of mortgage

funds, its local field offices may assist sponsors to the

extent of providing lists of HUD-FHA approved mortgagees

(lenders) in the area who make loans of the type and amount

desired. In the nation there are approximately 25,000

financial institutions, including branch offices, approved

by HUD-FHA for the insurance of loans under its various

programs. These approved lenders include national banks,

state banks, mortgage companies, insurance companies, savings

and loan associations, and savings banks.

b\. FNMA participation. Permanent loans under this program are

eligible for purchase by the Federal National Mortgage

Association under its regular secondary market operations for

multifamily housing mortgages. Upon execution of a commitment

for advances by HUD, FNMA will consider participating

up to 95% in construction advances as they are insured by

HUD.

FNMA will also enter into a preliminary commitment of

funds contract upon issuance of a feasibility letter

from HUD. Therefore, upon being advised by the HEW

regional office of its approval of the sponsor\'s initial

application to HEW, and after receipt of the initial FHA

application, Form 2013-HOSP, with fee, (plus for

proprietary facilities Previous Participation Certificate,

FHA Form 2530) the HUD office will issue a feasibility

letter to the sponsor, using the following format:

\"We have been advised by the HEW regional office in

(city and state) of its approval of your initial

application for an insured mortgage under Section 242

of the National Housing Act. We have also received a

formal application, FHA Form No. 2013-HOSP from (mortgagee)

in the amount of \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
with the

required fee.

By agreement between HEW and HUD, the responsibility

for the processing of Section 242 applications has been

delegated to HEW. Based on such approval, this proposal

is considered feasible subject to HEW\'s review and

approval of the revised HEW application.\"

c\. The sponsor will be dealing directly with the State Hill-Burton

agency as well as the HEW regional office during the

processing of a proposal. However, the formal application

for a HUD-FHA firm commitment must be submitted to the HUD

office through the HUD-FHA approved lender who has agreed

to make the loan.

[]{#__RefHeading___Toc173136093 .anchor}**1-7. MORTGAGE TERMS**.
[\<TOP\>](#_top) The maximum mortgage amount is governed by a

dollar limitation of \$50,000,000, and a loan limitation of 90%

of the estimated replacement cost of the property, including

major movable equipment, covered by the mortgage.

(1-7) a. Special limitations, in addition to those prescribed in the

previous paragraph, are imposed when the project involves

\"rehabilitation,\" as defined in b. below. The character of

the limitations depends upon whether the property is already

owned by the sponsor or mortgagor or is to be purchased or

otherwise acquired. (See 3-3.c.)

b\. Rehabilitation involves alteration, repair, modernization,

or addition to an existing hospital (or to an existing

structure by an established hospital) including appropriate

alteration and landscaping of the grounds. Rehabilitation

may also include the installation of technical or professional

equipment to be used in the hospital. However, the cost of

rehabilitating the existing building and grounds (together

with the cost of purchasing and installing technical equipment)

must represent at least 20% of the total mortgage

amount, with at least one half of such 20% applied to the

rehabilitation of the buildings and grounds. No more than

one half of such 20% may be applied to equipment for an

existing building.

c\. Joint Hill-Burton, HUD insured, and HEW guaranteed financing

is eligible for nonprofit mortgagors under this program under

the following conditions:

\(1\) If a Hill-Burton grant and a HUD insured loan are

involved, the total of the grant and loan cannot exceed

the total cost of the project and the required major

non-realty (movable) equipment includable under the

mortgage and grant.

\(2\) If an HEW guaranteed loan is involved, it may be used in

conjunction with a HUD insured loan. The total HUD-FHA

insured mortgage and the HEW guaranteed loan cannot

exceed 90% of the estimated replacement cost of the

property including major movable equipment.

d\. The maximum mortgage term is 25 years from the date of

beginning of amortization. Payments will be on the level

annuity monthly plan. Approved terms for monthly payments,

including curtail rates for reducing the principal amount of

the mortgage, will be prescribed by HUD.

(1-7) e. The mortgage may bear interest at a rate not in excess of

the maximum rate prescribed by FHA regulations.

f\. Mortgage insurance premium. The mortgagor\'s monthly mortgage

payments include an amount equal to one-twelfth of the annual

mortgage insurance premium which the mortgagee is required to

pay HUD-FHA. (Note: During the construction period, on

projects involving insurance of advances, the annual premium is

approximately one percent of the average outstanding principal

obligation of the mortgage).

g\. In addition to making monthly payments covering the principal,

interest and mortgage insurance premium due under the

mortgage, the mortgagor will be required to include in the

monthly payment an amount sufficient to provide for the payment

of taxes (if any), property insurance and any special

assessments and ground rents. Proprietary facilities in

addition will be required to make deposits to a replacement

reserve fund for the replacement of equipment

h\. The HUD insured mortgage must be the first mortgage on the

hospital to be constructed or rehabilitated. Generally,

this will be the only mortgage on the property.

\(1\) In certain instances, secondary financing is allowable

for nonprofit facilities as follows:

\(a\) If an HEW guaranteed loan is involved;

\(b\) If second mortgage money is supplied at a lesser

rate than the HUD-FHA insured mortgage, for

example, by a State or municipal body.

\(2\) In either instance, HEW must give its prior approval

to the second mortgage, after making a determination

that income will be available to meet required payments

on both the first and second mortgages. The mortgagee

must also give its approval to the second mortgage, as

required by the mortgage document. The HUD mortgage

must include a mutual default provision requiring that

a default on the second mortgage constitutes a default

on the first mortgage.

i\. Initial processing of an application will proceed only when

accompanied by evidence of site acquisition in the form of

fee simple title, an option to purchase, contract of sale,

a 99-year renewable lease, or a lease which has at least 50

years to run from the date of the insured mortgage. The

lease must include the provisions of FHA Form No. 2070,

Lease Addendum.

[]{#__RefHeading___Toc173136094 .anchor}**1-8. FINANCING CHARGES**.
[\<TOP\>](#_top) The mortgagee is permitted to obtain

reimbursement from the mortgagor for the application, commitment and

inspection fees paid to HUD-FHA. In addition, it may collect

from the mortgagor an initial service charge not to exceed two

percent of the principal amount of the mortgage, as reimbursement

for the cost of closing the loan transaction. This initial

service charge is included in computing the total estimated

replacement cost. Also included in computing total estimated

replacement cost is the one and one half percent FNMA commitment

and purchase and marketing fee. If the permanent lender is other

than FNMA, the one and one half percent is permissible. Financing

charges approved by HUD as reasonable, over and above the two

percent service charge and one and one half FNMA fee, may be

collected from the mortgagor and either turned over to the

permanent lender or retained by the construction lander, but may

not be included in computing estimated replacement cost.

[]{#__RefHeading___Toc173136095 .anchor}**1-9. PHYSICAL GUIDELINES**.
[\<TOP\>](#_top) The guidelines published by HEW in Public

Health Service Publication No. 930-A-7, General Standards of

Construction and Equipment for Hospital and Medical Facilities,

and in Public Health Service Publication No. 930-D-4, Hospital

and Nursing Home Equipment Planning Guide, will be used in this

program.

[]{#__RefHeading___Toc173136096 .anchor}**1-10. EVALUATION AND
PROCESSING OF PROPOSALS**. [\<TOP\>](#_top) The sponsor will be

dealing exclusively with the HEW regional office during the

feasibility processing of a proposal. Therefore, the initial

contact should be with the HEW regional office. If the initial

contact is made with the HUD office, the sponsor will be furnished

with a copy of this handbook and referred to the HEW regional

office. Because of the divided responsibilities in this program,

a liaison man will be designated by both the HUD and HEW regional

offices to coordinate proposals in process, initial and final

closings, etc.

On proprietary facilities the sponsors initial contact should

be with the HUD Field office as the Previous Participation

procedure, FHA Form 2530 is required. Proprietary sponsors

prior to filing the HEW application will submit a completed FHA

Form 2530 to the local HUD office with a covering letter stating

that the proposal is a proprietary hospital. Upon clearance of

the sponsors the HUD office will notify the sponsor that he may

file the initial application with the HEW Regional Office.

#  CHAPTER 2. HEW PROCESSING AND PROCEDURES

[]{#__RefHeading___Toc173136098 .anchor}**2-1. INFORMATION TO BE
FURNISHED**. [\<TOP\>](#_top) An applicant for Federal assistance

under this program will be required to furnish specific information

about the proposed project so that eligibility and conformity

with requirements on the program can be determined. This

information will be furnished on an HEW application form hereinafter

discussed. In addition, there are certain required assurances

which the applicant must agree to carry out. Processing procedures

will differ somewhat on nonprofit facilities, depending on

whether the project is to be constructed with Federal assistance

under both the HUD mortgage insurance program and the Hospital

and Medical Facilities Construction (Hill-Burton) Programs or

whether it will be constructed without Hill-Burton assistance.

a\. When the project is to be constructed without Hill-Burton

assistance, the applicant should submit the initial HEW

application to the State Hill-Burton agency which will issue

the certificate of need for the facility. All revisions

of the HEW application will be submitted directly to the

HEW regional office serving the applicant\'s area.

Simultaneously with the submission of each HEW application to

the HEW regional office, a copy will be sent to the State Agency

by the applicant. (If the project is a proprietary facility,

Previous Participation Clearance, FHA Form 2530 must be

obtained from the HUD office prior to submitting HEW initial

application.)

b\. When a nonprofit project is to receive Federal assistance

under the Hill-Burton Program, the applicant should proceed

in accordance with Hill-Burton program instructions, using

the appropriate forms and submitting all procedures through

the State Agency (Appendix 6).

\(1\) Application form and guide material. The Project

Construction Application (HEW 537) with instructions

is available from the HEW Regional Office or the

State Hill-Burton agency. The Public Health Service

publishes General Standards of Construction and

Equipment for Hospital and Medical Facilities (PHS

Publication No. 930-A-7) and other guide material for

planning hospitals and other health facilities. The

HEW Regional Office or the State Agency will provide

copies of this material to assist in planning and

constructing projects.

\(2\) Application format. The application is divided into an

initial application and necessary revisions. Final

approval of an application is given only after

application and the plans and specifications have been

submitted and approved.

[]{#__RefHeading___Toc173136099 .anchor}**2-2. PROJECT DESCRIPTION AND
PRELIMINARY INFORMATION**. [\<TOP\>](#_top) The primary

purpose of the initial application is to elicit information to

determine the eligibility of the proposed project. Before a

project can be approved by HEW, a narrative description of the

program must be developed as an integral portion of the application.

The program narrative should comprise a general or brief review

of the scope of services, as outlined below. It should be a

summary of the facility\'s program, and as such should be as

brief as possible, yet sufficiently detailed to adequately describe

the program of services. Details of the site, to include

its location, size and boundaries should be included. The program

narrative should also prove useful to the project sponsor in that

it can, through a step-by-step expansion, provide a basis for an

organizational plan for the administration of the program of

services, as well as provide valuable assistance and guidance to

the project architects and engineers in the development of design

drawings and specifications.

Since this program narrative guide was developed to assist in

the preparation of a narrative for all types of health care

services, and not restricted to one type of health care facility,

it is not expected that each proposed project contain all of the

health services listed; however, where appropriate and feasible,

the project sponsor should consider ways by which needed community

health services, when not a part of a proposed project, can in

fact be provided, such as through formal patient transfer

agreements, or through service sharing agreements with other

facilities.

a\. Applicant Eligibility and Need for Facility.

\(1\) Describe the method for determining the need in the

community for the facilities and services to be provided.

Include information about the results of any local

studies which reflect a need for such facilities and

services.

(2-2) (2) Describe the geographic and/or political subdivisions

now being served by the facility, and describe, as

measured in travel time, the accessibility of the

facility to the population.

\(3\) Describe the efforts that have been made or are being

made in area wide or interfacility planning to meet the

needs of the community in the most effective and

economical manner.

b\. Description of Programs to be Conducted in Facility.

\(1\) Describe the broad categories of health services to be

offered. Where applicable include services such as

medical, surgical, obstetrics, pediatrics, psychiatrics,

long-term care or extended care and also include:

\(a\) Overall bed complement.

\(b\) Bed distribution by services (e.g., medical,

surgical, intensive care, psychiatric, long-term

or extended care).

\(c\) Allocation of beds by nursing units.

\(d\) Allocation of beds by patient rooms.

\(e\) The number of operating rooms, obstetrical delivery

rooms, labor rooms, nurseries, etc.

\(f\) Outpatient and emergency services. Is a formally

organized outpatient service planned? If so, will

the outpatient service be a satellite, noncontiguous

unit organized into clinics? If so, give the types

of clinics proposed.

\(g\) Other diagnostic and treatment services \-- e.g.,

dental, radiology, laboratory, physical medicine

and rehabilitation, hemodialysis, cardiopulmonary

function, etc.

\(h\) Describe the social service and home care programs;

the extent of the services to be provided and

facilities required.

(2-2) (i) Describe any preventive medicine programs, such as

prenatal and well-baby clinics, TB detection,

nutrition and obesity clinics, and inoculation

programs.

\(2\) Educational and Research Programs.

\(a\) What programs are proposed for clinical and basic

biomedical research, and research in medical care

administration?

\(b\) Describe any formal educational programs for nurses,

interns, residents, technicians, therapists, and

others. State briefly the scope of the programs

and levels of preparation by professional category.

\(1\) Indicate services and facilities \-- e.g.,

teaching spaces, laboratories, offices, library,

student living quarters, recreational facilities

and supporting areas. (2) Give the approximate

size of the student body and faculty.

\(c\) Describe the health education programs for patients,

community and personnel.

\(3\) Identify all Individual Departmental Functions (as

physical and organizational units) \-- e.g.,

administration, medical records, central services, dietary,

pharmacy, general stores, housekeeping. These may be

grouped by functional similarities suitable to

organizational structure and administrative prerogatives,

such as diagnostic and treatment services, service

departments, nursing services. (Indicate if any of these

will receive unusual emphasis or otherwise be specially

designed as a result of sharing services with other

facilities, or modifications of program through

cooperative agreements.)

\(4\) Staffing Requirements.

\(a\) Show the existing and proposed staffing by position

and number of employees for each service.

\(b\) Give the approximate number of physicians who will

serve on the medical staff indicating general or

special practice.

(2-2) (5) Working Relationships with Other Facilities.

\(a\) Describe in detail existing and proposed plans for

coordinating services with other facilities; and

any existing or proposed formal working agreements

with health or other organizations providing

services to the general public.

\(b\) Include a description of any plans to share services

or facilities with other institutions. (Existing

and proposed referral services should also be

included.)

\(6\) Physical and Environmental Requirements.

\(a\) Interdepartmental relationships.

1 Describe the functional relations between

services and program areas, and the general

locations of these for maximum effectiveness of

interdependent activities.

2 Give the approximate gross square footage of the

proposed project and of each functional area,

and the total for each department or major

division of the facility.

3 Determine the rooms and separate work areas by

type and number necessary for the performance

of programmed functions.

\(b\) Describe the transportation and distribution

systems for moving people, equipment, food, records

and waste.

\(c\) Describe the electrical and communication systems

to be installed \-- e.g., nurse call, paging, central

dictation, radio and television, and emergency

power.

c\. Initial Application should also Indicate the Proposed financing

of the applicant\'s share of the cost of a project, and

the financial responsibility of the applicant for maintenance

and operation of the project for a two-year period following

(2-2) construction, establish the proprietary or nonprofit status

of the applicant\'s project, and present a preliminary estimate

of the number of square feet in the project, the cost per

square foot, the cost of equipment and other estimated costs.

Schematic drawings of the proposed project should also be

included. The financial capability of the applicant (mortgagor)

to amortize a HUD-FHA insured mortgage will be determined

for each project by the HEW Regional Office, after review of

analyses and recommendations submitted by the State Hill-Burton

Agency and supporting documents which will be submitted

with the initial Application. These supporting documents

will include the following data and other information:

1(a). Provide the following data for the past three years:

Admissions or

\(1\) Accommodation No. of Beds Discharges Total Pt. Days

Yr. Yr. Yr. Yr. Yr. Yr. Yr. Yr. Yr.

Private \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_

Semi-Private \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_ \_\_\_\_

Ward \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_

TOTALS \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_

\(1\) Accommodation No. of Beds % Occupancy

Yr. Yr. Yr. Yr. Yr. Yr.

Private \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

Semi-Private \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

Ward \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

TOTALS \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

Admissions or

\(2\) Clinical Serv. No. of Beds Discharges Total Pt. Days

Yr. Yr. Yr. Yr. Yr. Yr. Yr. Yr. Yr.

Medicine & Surgery \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_ \_\_\_\_

Obstetrics \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_ \_\_\_\_

Pediatrics \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_ \_\_\_\_

Psychiatry \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_ \_\_\_\_

Other (specify) \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_ \_\_\_\_

TOTALS \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_
\_\_\_\_ \_\_\_\_

\(2\) Clinical Serv. No. of Beds % Occupancy

Yr. Yr. Yr. Yr. Yr. Yr.

Medicine & Surgery \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

Obstetrics \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

Pediatrics \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

Psychiatry \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

Other (specify) \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

TOTALS \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

1(a). Provide the following data for the past three years:

\(3\) Source of Payment % of Gross Revenue

Yr. Yr. Yr.

Blue Cross \_\_\_\_ \_\_\_\_ \_\_\_\_

Other Insurance \_\_\_\_ \_\_\_\_ \_\_\_\_

Medicare \_\_\_\_ \_\_\_\_ \_\_\_\_

Medicaid \_\_\_\_ \_\_\_\_ \_\_\_\_

Self-Pay \_\_\_\_ \_\_\_\_ \_\_\_\_

Free Care \_\_\_\_ \_\_\_\_ \_\_\_\_

Other (specify) \_\_\_\_ \_\_\_\_ \_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

TOTALS 100 100 100

Note: In (3) above, exclude bad debts;

include both inpatients and outpatients

\(4\) Revenue and Units of Service by Income Category (Use American

Hospital Association (HAS) Definitions.)

Year\_\_\_\_\_ Year\_\_\_\_\_

Service (Use Gross Revenues) Units \$ Units \$

Daily Patient Services \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Delivery & Labor Rooms \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Operating Rooms \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Central Services & Supply \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Laboratory \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Blood Bank \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Radiology \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Pharmacy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Inhalation Therapy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Physical Therapy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Occupational Therapy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Outpatient Clinics \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Emergency Department \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

Cafeteria \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Miscellaneous \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_
\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_
\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_
\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

TOTALS \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Less Discounts, Allowances,

Bad Debts, Etc. \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Net Revenues \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

\(5\) SSA-1562 \"Reimbursable Cost on the Combination Method\"

\(6\) SSA-1563 \"Hospital Statement of Reimbursable Cost\"

\(7\) Audits performed by Blue Cross

\(8\) Annual financial and statistical reports submitted to Blue Cross

and Medicaid

\(9\) Audited annual financial statements

1(b). Provide the following:

\(1\) Schedule of current charges

\(2\) Monthly financial and statistical reports submitted

to the facility board during the current year.

\(4\) Revenue and Units of Service by Income Category (Use American

Hospital Association (HAS) Definitions.)

Year\_\_\_\_\_

Service (Use Gross Revenues) Units \$

Daily Patient Services \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Delivery & Labor Rooms \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Operating Rooms \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Central Services & Supply \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Laboratory \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Blood Bank \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Radiology \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Pharmacy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Inhalation Therapy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Physical Therapy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Occupational Therapy \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Outpatient Clinics \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Emergency Department \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Cafeteria \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Miscellaneous \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

TOTALS \_\_\_\_\_\_\_\_\_

Less Discounts, Allowances,

Bad Debts, Etc. \_\_\_\_\_\_\_\_\_

Net Revenues \_\_\_\_\_\_\_\_\_

\(5\) SSA-1562 \"Reimbursable Cost on the Combination Method\"

\(6\) SSA-1563 \"Hospital Statement of Reimbursable Cost\"

\(7\) Audits performed by Blue Cross

\(8\) Annual financial and statistical reports submitted to Blue Cross

and Medicaid

\(9\) Audited annual financial statements

1(b). Provide the following:

\(1\) Schedule of current charges

\(2\) Monthly financial and statistical reports submitted

to the facility board during the current year.

1(c). Provide the following data projected for the first two

years of operation:

\(1\) Budget to include:

a\. Data called for in A (1) through (4) above.

b\. For each source of inpatient payment, specify:

Number of Average Total % of Total Net

Patient Daily Gross Gross Patient

Source of Payment Days Charge Charges Revenue Income

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_

Blue Cross \_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_ \$\_\_\_\_\_\_
\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_

Other Insurance \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

Medicare \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

Medicaid \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

Self-Pay \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

Free Care \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

Other (specify) \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

TOTALS \_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_ 100 \$\_\_\_\_\_\_\_\_

Number of Total Total Net

Patient Gross Patient Net Average

Source of Payment Days Charges Income Per Diem

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_

Blue Cross \_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_

Other Insurance \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_

Medicare \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_

Medicaid \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_

Self-Pay \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_

Free Care \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_

Other (specify) \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_ \_\_\_\_\_\_
\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

TOTALS \_\_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_

c\. Other projected income such as endownments, fund

drives, etc.

d\. Total operating budgets, with individual

departmental expenses to include salaries and

wages, supplies and other expenses. Salary

and wage detail should show the following

departmentally: position(s), unit salary, number

of staff in category, and total salary and wages.

e\. Provide detailed proposals supporting proposed

expenses for major contractual services. (e.g.,

laundry, food service, housekeeping, etc.)

f\. Debt service per patient day.

g\. Statement of existing indebtedness.

h\. Where applicable, such as in the case of

for-profit hospitals, provision for real estate,

income and other taxes.

i\. Reserve for replacement (proprietary only).

Note: Provide statements setting forth basis for assumptions and
rationale

for projections.

1(d). Attach the following:

\(1\) Facility organization chart.

\(2\) Listing of board of directors and committees,

to include credentials and qualifications of members.

\(3\) Composition of planning and development committee,

to include credentials and qualifications of members.

\(4\) Amortization schedule showing principal and interest

payments for mortgage period at the projected interest

rate.

\(5\) Tables showing projected annual depreciation for

buildings, fixed equipment and movable equipment.

Indicate projections for purchase of equipment.

(2-2) d. The Project Construction Application (HEW 537) includes

certain assurances to be signed by the applicant.

THE APPLICANT SHOULD READ CAREFULLY ALL THE REQUIRED

ASSURANCES IN THE APPLICATION BEFORE SIGNING.

e\. Determination of tentative amount of maximum insurable

mortgage. In its processing of the initial application the

HEW regional office can determine the tentative amount of

the maximum insurable mortgage as follows:

\(1\) Using the Guide Form of the HEW Final Approval Letter

add Items 5, 7 and 9.

\(2\) Divide the total amount by the factor shown in Column 3

below, which is based on a 7% interest rate mortgage:

\(1\) (2)\* (3)\*

Construction Period Carrying Charges and Factor

(Months) Financing (%) (100 - Col. 2)

12 8.3 91.7

15 9.3 90.7

18 10.3 89.7

21 11.3 88.7

24 12.3 87.7

27 13.3 86.7

30 14.3 85.7

33 15.3 84.7

36 16.3 83.7

\*Note for nonprofit facilities each percentage in Column 2

should be increased by 2.0 and each percentage in Column 3

reduced by 2.0 to reflect AMPO in nonprofit proposals where

applicable (or a lesser percent if so desired by the applicant).

(To compensate for any change in the maximum interest rate

the above columns 2 and 3 may be adjusted either up or down

by .0625 for each 3 month interval cumulatively for each 1/2

of 1% change in the interest rate - Increased interest rate

\- column 2 would be increased and column 3 decreased;

Decreased interest rate - column 2 would be decreased and

column 3 increased.)

The percentage figure in Column 2 includes mortgage interest,

mortgage insurance premium, HUD-FHA application, commitment

and inspection fees, the FNMA commitment, purchasing and

marketing fee, and Allowance to Make Project Operational

(AMPO) (where applicable). Not included are real estate

taxes, fire and hazard insurance (usually in the construction

contract) and title and recording expense.

Upon publication of any change in the maximum interest rate,

a new table of factors will be issued based upon the new

rate.

f\. Approval of Initial Application. After approval of HEW

initial application, the Regional Office advises the

applicant to submit formal application, FHA Form 2013-HOSP.

to HUD through approved lender, at the same time advising the

State Agency that it is in order to issue a Certificate of

Need to the sponsor.

[]{#__RefHeading___Toc173136100 .anchor}**2-3. REVISED APPLICATION: THE
AGREEMENT**: [\<TOP\>](#_top) Certain cost and other

information must be submitted after bids have been opened and

approved and before the construction contract is awarded. In

straight-loan projects, this information replaces the revised

application. In combined projects this information is submitted

with the Revised Application. This information establishes a

basis for initial mortgage insurance approval and an agreement

whereby the applicant agrees to construct the project in accordance

with the approved application. After this approval, the

applicant will be notified concerning the procedure of making an

amended application to HUD for mortgage insurance.

In addition to cost figures shown on this part of the application,

carrying charges and financing during construction will be added.

These later costs will be calculated precisely by the HUD Office

concerned prior to final approval of the loan.

[]{#__RefHeading___Toc173136101 .anchor}**2-4. REVISED APPLICATION OR
EQUIPMENT: COMPLETION OF PROJECT** [\<TOP\>](#_top). When

construction of the project is completed, the applicant submits

a revised application and/or substitute information reflecting

final project costs. Total mortgage amount endorsed will be the

original insurable amount, or 90% of the actual total project

cost, whichever is less. After a final inspection of the project

by the HEW Regional Office, HUD will be notified that (final)

endorsement of the mortgage is in order.

[]{#__RefHeading___Toc173136102 .anchor}**2-5 DESIGN OF THE PROJECT AND
CONTRACT REQUIREMENTS**. [\<TOP\>](#_top)

a\. Predesign Conference. The design of a project should begin

with the scheduling of a predesign conference. The conference

should be attended by the applicant, the project architect,

and representatives of the State agency and the Regional

Office. It is recommended that the conference agenda include

a written program which sets forth the requirements of the

facility, specification content, the need for current cost

estimates, and the responsibilities of all concerned with

the project.

b\. Construction standards and minimum requirements. The General

Standards of Construction and Equipment for Hospital and

Medical Facilities are contained in the Public Health Service

Publication No. 930-A-7. A thorough study of these standards

by the applicant and his architect is necessary before the

design of the project is started. These standards constitute

the minimum requirements for construction. Other recommended

design guide material is available from the HEW Regional

Office. Consultation services on the technical and

administrative aspects of the functional program in existing

facilities, or the proposed programs for new facilities, are

available upon request to the HEW Regional Office.

c\. Submission of drawings, specifications, and other material.

To assist the applicant in pursuing an orderly routine in

the development of the project, the drawings and other design

material shall be submitted to the HEW Regional Office in

three stages:

\(1\) First stage - schematics. When the building site has

been selected, the next planning step takes the form of

small scale schematic drawings. The information

contained in the narrative program (described under

paragraph 2-2) will be translated into terms of required

areas and their functional relationship. Based on the

narrative program and studies by the applicant\'s

architect, the results should be a fairly accurate

concept of the final form of the facility. This plan

should be studied in detail by all concerned and

necessary changes should be made at this time. Schematic

drawings are to be submitted with the initial Application.

After the schematic drawings have been agreed upon, a

reasonably accurate estimate of the project cost can

be made. This estimate should include the cost of

construction of the building(s), fixed and movable

(2-5) equipment, architect\'s and consultant\'s fees, inspection

and supervision, parking areas, grading, walks, roads and

landscaping, and contingencies.

\(2\) Second stage - preliminaries. After the schematic

drawings and initial cost estimates have been approved,

the plan should be developed to a larger scale

indicating major items of equipment for the building.

During the preliminary stage, the architect and his

consulting structural, mechanical, and electrical

engineers will have been studying the program requirements

to determine the most economical and practical

systems of foundations, structural framing, plumbing,

heating, electrical distribution, ventilation, and

air-conditioning. They must determine which type of fuel

is most economical, which types of elevators and control

devices will be most satisfactory, which materials are

most suitable from the point of view of economy, function,

and maintenance. These questions must be decided before

proceeding with the third stage (working drawings).

Each floor plan should show the square feet of space

and the number of beds required, and should indicate

the function of each room.

\(a\) The architect should now review the cost estimate

and advise the applicant if adjustments in the

budget are required.

\(b\) During this planning phase, the architect should

have given all those concerned with the project

ample opportunity to study the drawings and to

make comments and recommendations. The design

team may now proceed with the development of

final working drawings and specifications.

\(3\) Third stage - working drawings. The working drawings

are the final stage of the design process. These are

the drawings upon which the contractor will base his

bid. It is of the utmost importance that they represent

in every instance and in great detail exactly what is

to be constructed. This will minimize misunderstandings,

claims for extras, and change orders during the

construction period.

\(a\) The final working drawings should comply with the

requirements contained in Public Health Service

regulations. Separate drawings shall be prepared

for each of the branches of work: (1)

architectural, (2) structural, (3) mechanical, and

\(4\) electrical.

(2-5) (b) The working drawings, together with the

specifications, are the most important documents

constituting the contract. They translate concept

into accomplishment. On their quality depends

exactness in estimating and effectiveness in

building what was planned. Their careful

preparation is the best insurance for trouble-free

execution of the work.

\(c\) Upon completion of the working drawings, a revised

estimate of cost for the work should be prepared

by the architect to alert the applicant on the

amount of financial obligation he must be able

to meet.

d\. Contract Specifications.

Content of specifications. The title sheet shall contain

the name of the project, its location, type of work, name

and address of the owner, the architect, the consultant (if

applicable), the date of specifications, a brief description

of the work, and shall indicate whether public advertisement

or selective bidding is to be used. An index should be

included.

\(1\) Instructions to Bidders. The instructions to bidders

shall include detailed information regarding various

legal or established requirements in connection with

the preparation, submission, and consideration of

proposals, and for the construction of the project. Time

for completion, liquidated damages, if specified, the

handling and return of bid deposits, and details relating

to bidding and contract award shall also be included.

If the Schedule of Drawings is not set forth as a separate

section of the specifications, it should be included

in these instructions.

\(2\) Bid forms. A separate bid form shall be included for

each part of the work for which a bid is requested.

The bid forms shall contain all pertinent agreements

including all addenda relative to the contract which

the bidder should acknowledge when filing his proposal.

When alternate bids and/or unit prices are required,

they should be made a part of the proposal. The amount

and type of bid deposit should also be stated.

(2-5) (3) Form of contractor-owner agreement. For the advance

information and knowledge of bidders, the construction

contract form which must be a \"lump sum\" type shall be

contained in the specifications.

\(4\) Supplemental general conditions. General conditions

should be supplemented when exceptions or additional

information are required in connection with the project

and may include such items as conditions relating to the

geographical area, laws, codes, and regulations of area

in which the building is located.

\(5\) Alternates. A reasonable number of alternate prices

may be requested in the bidding documents. The reason

for requesting alternate prices are (1) to allow a decision

between two materials or methods of different value

and (2) to adjust the bids received so that the contract

sum will fit within the budget.

\(6\) Technical specifications. The technical portions of

the specifications are the requirements and instructions

for all trade sections or divisions of the work describing

the materials, workmanship, and equipment required

for the construction of the project.

\(7\) Addenda. Addenda to the drawings and specifications

consist of notices or bulletins sent to bidders to

notify them of any necessary corrections, interpretations,

or changes in the requirements of the drawings

and specifications. Addenda must have the approval of

the State agency and the regional office and be issued

in time to reach bidders prior to their submission of

bids.

\(8\) Approval and format. The Public Health Service Regulations

\--Part 53, require an assurance that the applicant

will obtain approval of final working drawings and

specifications from the Public Health Service before

the project is advertised or placed on the market for

bidding.

e\. Mandatory Requirements to be Specified.

\(1\) Time for completion. The specifications must stipulate

a time of completion, either in calendar days or as a

fixed date, for each construction contract included in

the project. This is an important item and is used,

among other things, to assure that all bidders are

competing on an equal basis.

(2-5) (2) Labor standards. The Labor Standards which include the

Copeland Act, Anti-Kickback Regulations, the Davis-Bacon

Act, and the assurance of non-discrimination in

contract employment for all contractors, subcontractors,

and vendors as required by Executive Order 11246, dated

September 24, 1965, shall be incorporated in the

specifications without change.

\(3\) Wage determination applicability. Applicants must

obtain wage determinations for inclusion in the bidding

documents. The request should be submitted through the

State agency to the regional office six weeks before

the bid opening date.

\(a\) The request should contain the following

information:

1 Name of facility, project number and location

including county;

2 Type of project, i.e., new hospital, nursing

home;

3 Estimated value of construction contracts;

4 Description of project, type of building, number

of stories, number of elevators, and whether

the building is air conditioned;

5 Name and address of project architect;

6 Approximate date project will be advertised for

bids, bid opening date, and proposed date for

award of contract;

7 Listing of other projects that are under

construction of have recently been constructed in

the area, including type of building, cost and

the contractor\'s name and address.

\(b\) The wage determinations are effective for 120 days

from date of issuance. If not used within that

time period, a redetermination must be requested.

\(4\) General conditions. The Public Health Service General

Conditions, AIA Document 201-/SC, Federal Supplement to

General Conditions, or any other general conditions

(2-5) developed by an acceptable organization are to be

made a part of the specifications. Public Health

Service General Conditions are available from the

State agency. If they are not used, the following

must be incorporated into the general conditions:

\(a\) The paragraph quoted below must be incorporated

into the general conditions and also appear at

the beginning of each section or division of the

specifications:

\"Notwithstanding any reference in the specifications

to any article, device, product, material,

fixture, form, or type of construction by name,

make or catalog number, such reference shall be

interpreted as establishing a standard of quality

and shall not be construed as limiting completion;

and the Contractor, in such cases, may at his option

use any article, device, product, material, fixture,

form or type of construction which in the judgment

of the Architect expressed in writing is equal

to that specified.\"

\(b\) Representatives of the Secretary, HHS, and the

State agency shall have access to the work site.

\(c\) The following requirements apply to the Section

242 Hospital Program:

1 When the estimated cost of construction or

rehabilitation is \$500,000 or less and no

Hill-Burton Grant or HHS guaranteed loan is

involved, the mortgagor shall furnish assurance

of completion of the project in the form of a

personal indemnity agreement (Personal Undertaking

Form FHA 2459), signed by the principal

individual(s) responsible for construction

or rehabilitation of the project.

\* 2 In the absence of personal indemnity agreement

when the estimated cost of construction or

rehabilitation is more than \$500,000 and in

all cases involving Hill-Burton Grants or HHS

guaranteed loans, the mortgagor shall furnish

payment and performance bonds each in the

minimum amount of 100 percent of the accepted

price. The standard forms to be used are No.

2452, Performance Bond-Dual Obligee and No.

2452-A, Payment Bonds. \*

(2-5) (d) The contractor shall obtain and maintain insurance

for himself and all subcontractors to include

coverage for:

1 Statutory workmen\'s compensation and employer\'s

liability.

2 Bodily injury liability (\$300,000/\$500,000).

3 Property damage (\$100,000/\$300,000).

4 Owner\'s protective liability for bodily injury

(\$300,000/\$500,000), property damage liability

(\$100,000/\$300,000).

\(5\) Fire and extended coverage. The contractor shall insure

the building or other work included in the contract

against loss or damage by fire and against loss or

damage covered by the standard extended coverage insurance

endorsement. The policies shall have attached thereto

a standard mortgage clause making loss payable to the

mortgagee and the secretary as their interests may

appear, and certificates of the insurance company as to

the amount and type of coverage, and the terms of policies

shall be delivered to the owner before any partial

payment is made. The policy shall provide for the

inclusion of all other contractors, subcontractors, and

others employed on the premises as named insured.

\(6\) Competitive specifying. All manufacturers of materials

and equipment of comparable quality should have an

opportunity to receive consideration under competitive

bidding conditions that are fair to the manufacturer,

the owner, and the contractor. All bidders must be

offered a definite basis for competitive bidding. The

project specifications shall describe each item of

material and equipment in terms sufficiently clear to

assure that all bids made in compliance therewith will

be for products of substantially the same quality.

Conditions or limitations within the specifications

which are designed to limit bidding to only one of

several known sources of supply may violate the

principles of competition. The HEW regional office should

be consulted for further information regarding acceptable

methods of specifying materials and equipment.

[]{#__RefHeading___Toc173136103 .anchor}**2-6. BIDS, AWARDS, CONTRACTS,
AND MODIFICATIONS**. [\<TOP\>](#_top)

a\. Bidding procedures. Construction contract awards shall be

based on competitive bids. In obtaining competitive bids,

either of the following methods may be used:

\(1\) Open bidding: public advertisement in suitable newspapers

(advertisements must appear prior to the release

of bidding material to any bidder).

(2-6) (2) Selective bidding: selection of and invitation to three

or more competent bidders to submit bids. When bids

are obtained from a selective list, care should be taken

to ensure that each of the invited bidders is willing to

bid.

THERE CAN BE NO IDENTITY OF INTEREST BETWEEN THE SPONSOR/

MORTGAGOR AND THE CONTRACTOR.

b\. Bid openings. Bids shall be opened publicly at the time and

place stated in the invitation for bids, and the owner shall

furnish the HUD Regional Office with three copies of a

tabulation of all bids received.

c\. Inspection of bids. The applicant shall make the original

bidding documents available for inspection by authorized

representatives of the Secretary, HEW.

d\. Low bid exceeds application estimate of eligible costs.

When the bids received are higher than the estimated cost

shown in the approved application, the applicant may:

\(1\) Demonstrate to the satisfaction of the Secretary, HEW,

that additional financial resources are available to

pay the increased cost.

\(2\) On the basis of revised plans and specifications,

solicit bids from the original contractors; however, prior

to readvertising, the revisions must have the approval

of HEW.

\(3\) Negotiate, within reasonable limits; i.e., approximately

five percent with the low bidders on items of construction.

The negotiations can be at the discretion of the

applicant; however, the State agency and the HUD Regional

Office should approve all such negotiations since they

could, if extensive enough, change the project concept.

e\. Contracts. Construction work shall be performed by the \"lump

sum\" (fixed price) method. The work may be let under one

contract, or bids may be received separately for major

branches of the work. In either case, the contract shall

be awarded to the responsible bidder submitting the lowest

acceptable bid.

f\. Submission of bids and contracts for approval. No award of

contract shall be made until the final part of the application

has received the approval of the HUD Regional Office.

g\. Disqualification of certain bidders. Anyone furnishing

design and/or supervisory services on a project must be

disqualified as a bidder on such projects. The acceptance of

such a bid would be in violation of the requirements of

competitive bidding since the firm or individual providing

such service is in a preferred position.

h\. Preaward conference. Prior to award, the low bidder and

known subcontractors may be required to attend a preaward

conference for the purpose of formulating an affirmative

action program relating to equal employment opportunity

during the construction of the project. Applicants are

advised to contact the HEW Regional Office before taking

bids or awarding contracts for any project to determine

whether a preaward conference should be held. This

requirement may be accomplished at the time as the

Preconstruction Conference (Paragraph 2-9 below).

[]{#__RefHeading___Toc173136104 .anchor}**2-7. PROPRIETARY FACILITIES**.
[\<TOP\>](#_top) Proprietary facilities are required to

make payments into a reserve fund for replacements of equipment.

To calculate the annual payment to the reserve, HEW will take

10% of the amount of the equipment included in the replacement

cost. This figure will be stated to the HUD office in the HEW

Final Approval Letter.

[]{#__RefHeading___Toc173136105 .anchor}**2-8. CONSTRUCTION OF THE
BUILDING**. [\<TOP\>](#_top) The applicant is responsible, for

completing the work in accordance with the approved plans and

specifications and for securing compliance with labor standards.

A full-time applicant\'s (or architect\'s) representative is

recommended; the cost of his service is allowable for Federal

participation.

[]{#__RefHeading___Toc173136106 .anchor}**2-9. PRECONSTRUCTION
CONFERENCE**. [\<TOP\>](#_top) Immediately after signing all building

construction contracts, the applicant should arrange for a

meeting of the Regional Office personnel with the architect,

clerk-of-the-works, consultant, prime contractor, and the principal

subcontractors. This discussion of the responsibilities

of the various parties will help to overcome misunderstandings

and problems which may arise during construction. On joint

projects, representatives of other agencies may wish to attend

the meeting. (The purposes of the Preaward Conference may be

accomplished prior to these Preconstruction Conference items,

at the same meeting.)

[]{#__RefHeading___Toc173136107 .anchor}**2-10. ALLOWABLE AND
NONALLOWABLE COSTS**. [\<TOP\>](#_top) Summarized in Appendix 4.

A necessary modification of Item 12 of this Appendix (Space for

Private Practice of Medicine) to be consonant with a specified

intent of Section 242 of the National Housing Act as added by

Section 1501 of the Housing and Urban Development Act of 1968,

i.e., to encourage the group practice of medicine, is reflected

therein.

[]{#__RefHeading___Toc173136108 .anchor}**2-11. LABOR STANDARDS**.
[\<TOP\>](#_top) Securing compliance with labor standards will

require the applicant to:

a\. Check weekly payrolls to assure that they contain the required

information and that Labor Standards are properly certified

and are accompanied by the required Anti-Kickback affidavits.

b\. Verify that wages are not less than those shown on the wage

determination, that all classifications employed are listed

therein, and that the requirements are met if apprentices

are employed.

c\. Assure that a copy of the wage determination is posted at the

site in a place where it can be easily seen by the workers.

d\. Maintain and preserve all payrolls, affidavits, and other

pertinent data during the life of the contract and for five

years after completion of construction or until a Federal

audit is made.

e\. Withhold sufficient payment from the contractor, in the event

of an alleged labor standards violation, in accordance with

the provisions of the labor standards.

f\. In the case of a violation, submit a report describing the

violation and its settlement to the HEW Regional Office (in

accordance with the labor standards).

[]{#__RefHeading___Toc173136109 .anchor}**2-12. COMPLETION DATE**.
[\<TOP\>](#_top) The date of completion for determination of

actual costs is established by HEW. The mortgagor must submit

to HEW a revised Hill-Burton application reflecting the final,

actual, project costs including all carrying charges, and financing

and discounts up to the date of completion as established by

HEW. These costs will be reviewed by HEW. (See Paragraph 3-4.b.

(2).)

[]{#__RefHeading___Toc173136110 .anchor}**2-13. POSTCONSTRUCTION
OPERATIONS**. [\<TOP\>](#_top) The applicant shall arrange for a

final inspection by submitting a request to the Regional Office

when the construction work is complete.

a\. As-built drawings, showing all changes, deviations, and

corrections, particularly relocations of electrical,

mechanical, and other utility services, should be prepared

and maintained by the applicant.

b\. The applicant shall inspect the project prior to the expiration

of the guarantees contained in construction contracts

so that any defects resulting from the use of inferior

materials, equipment, or workmanship may be corrected.

c\. ATTENTION IS DIRECTED TO THE ASSURANCES SET FORTH IN THE

APPLICATION REGARDING COMPLIANCE WITH MINIMUM STATE STANDARDS

FOR MAINTENANCE AND OPERATION AND FOR THE PROVISION OF

FREE PATIENT CARE TO THE EXTENT FEASIBLE.

[]{#__RefHeading___Toc173136111 .anchor}**2-14. INCOMPLETE OFF-SITE AND
ON-SITE FACILITIES**. [\<TOP\>](#_top) In the case of

incomplete on-site and off-site facilities, approval of the final

advance of mortgage proceeds may be given when the incomplete

items are minor in nature, all off-site utilities such as sewer,

water, electrical and gas facilities are installed and connected,

and adequate facilities for ingress and egress are provided, and

a cash escrow for completion of the facilities is deposited with

the mortgagee under an appropriate agreement. Except for

landscaping and exterior improvements which cannot be completed

because of weather, the amount of the escrow must be at least

twice the HEW Regional Office\'s estimated cost of completion to

assure an incentive to complete the work taking into consideration

a possible rise in cost. The escrow for landscaping and

exterior improvements must not be less than the estimate of cost

of completion by the HEW Regional Office. It is not anticipated

that there will be changes during construction. If the applicant

desires to make a change which constitutes a significant betterment

on HUD insured mortgage projects, the change order must be

reviewed and approved by the HEW Regional Office.

[]{#__RefHeading___Toc173136112 .anchor}**2-15. EQUIPMENT**.
[\<TOP\>](#_top)

a\. Applicant\'s responsibility. It shall be the responsibility

of the applicant to prepare a list of and to select and

purchase all necessary equipment for the complete functioning

(2-15) of all services included in the project. Consumable items,

disposable items, and items of current operating expense

such as fuel, food, and drugs are considered supplies and

shall not be included in the project equipment list.

b\. Classification. Equipment items shall be classified in two

main groups:

\(1\) Fixed (realty) equipment is defined as equipment which

is permanently affixed to the building or which must be

connected to a service distribution system designed and

installed during construction for the specific use of

the equipment. It includes items such as extractors,

walk-in refrigerators, inter-communication systems,

and built-in casework.

\(2\) Movable (nonrealty) equipment is defined as all items

of equipment which are not considered to be fixed

equipment. It includes items such as operating tables,

obstetrical tables, anesthesia apparatus, wheeled

equipment, portable paging systems, etc.

c\. Purchase. Items of fixed equipment not included in the

construction contract are to be purchased competitively,

except where justification is submitted in writing by the

applicant and approved by the State agency and the HEW

Regional Office.

\(1\) Movable equipment may be purchased on the open market,

by securing quotations, or through competitive bidding

procedures.

\(2\) Applicants who do not include all fixed equipment in

the construction contract and let separate contracts

for furnishing and installing certain items of fixed

equipment must include in such separate contracts all

provisions for contract security, insurance, and

compliance with labor standards except that labor

standards need not be included for contracts under \$2,000.

d\. Equipment lists. Separate lists of equipment are to be

submitted by the applicant as soon as possible after the award

of the construction contract for (a) all fixed equipment

purchased outside the construction contracts, and (b) all

movable equipment.

(2-15) (1) Fixed equipment which is not to be included in the

construction contract shall be shown on the preliminary

stage of the plans (second stage) to ensure its

coordination with the architectural, mechanical, and

electrical phases of the work.

\(2\) The purposes of the equipment lists are:

\(a\) To provide the applicant with a mechanism for

systematically determining the equipment needed

for the facility; and

\(b\) To provide the HEW Regional Office with the

information necessary to determine that the

equipment is essential to and adequate for the

services provided by the facility, and that the

items to be purchased are of reasonable cost and

allowable for inclusion in the estimated replacement

cost.

\(3\) The approved equipment lists shall not be used as a

means of policing the selection and purchase of equipment

by applicants. In the purchase of equipment, the

applicant may make substitutions, omissions, or changes

in quantity of items, provided that the nature and

extent of the services are not materially affected by

the changes.

\(4\) The cost of all movable equipment should include equipment

on hand and equipment to be purchased. Costs shall

be shown for all equipment except equipment on hand or

equipment purchased through the construction contract.

\(5\) When rooms, such as bedrooms, are to be identically

equipped, the equipment list should show the equipment

planned for one room only and identify the additional

rooms which are to be so equipped. Cost estimates

should be projected for equipment to be purchased for

all rooms. A recapitulation for equipment items by

departments should also be submitted.

\(6\) If more than one project is involved in the approved

application, the equipment list should be prepared for

the entire facility under construction. If an item of

equipment will serve more than one project, the total

cost of the item is to be shown, and the amount to be

charged to each project shown in the designated columns.

The applicant shall indicate by attachment to the equipment

list the basis for the proration of the cost among

projects.

(2-15) e. Amending the equipment list. The applicant should amend

the equipment list for either of the following purposes:

\(1\) To add additional items not included on the original

approved list.

\(2\) To reflect a change in the list made necessary by a

change in the scope of the project or a change in the

services to be provided.

Equipment lists may be amended by submitting revised pages

showing the items deleted, changed, or added.

#  CHAPTER 3. HUD PROCESSING AND PROCEDURES

[]{#__RefHeading___Toc173136114 .anchor}**3-1. FORMAL APPLICATION**.
[\<TOP\>](#_top) An initial formal application, FHA Form

2013-HOSP., with a fee equal to \$1.50 per \$1,000 of the mortgage

amount requested, will be submitted to the HUD Office through a

HUD-FHA approved mortgagee, after review and approval of the

feasibility of the proposal by the HEW Regional Office (initial

HEW application). The HUD office will be notified of the HEW

approval either directly or by copy of the HEW feasibility

approval letter to the sponsor.

a\. Nonprofit processing. The application will not be reviewed

by HUD. It will be numbered and the fee deposited as set

out in the fiscal instructions. The fee will be transferred

to HEW by the Office of the Comptroller, HUD-FHA, and is

not thereafter refundable. A feasibility letter, using the

format set forth in 1-6.b.(1) of this handbook, will also be

issued to the sponsor by HUD. Copies of the numbered

application and copies of the feasibility letter will be sent

to the HEW regional office and to the Director, Office of

Unsubsidized Insured Housing, HUD-FHA, for their files. FHA

form 2530 Previous Participation Procedure is not applicable

to nonprofit facilities in this program. Approval of non-profit

sponsors or mortgagors has been delegated to HEW.

b\. Proprietary (Profit-motivated) processing. FHA Form 2530,

Previous Participation Procedure is required on proprietary

proposals. Proprietary sponsors prior to filing initial HEW

application will submit a completed FHA Form 2530 to the

local HUD Field Office with a covering letter stating that

the proposal will be for a proprietary hospital. Upon

clearance of the sponsors the HUD office will notify the

sponsors by letter that they may file application with the

HEW Regional Office. (A copy of this letter will be sent to

the HEW Regional Office.) During the HEW processing of the

initial application, communication between HEW and HUD may

have been made on proprietary facilities. (HEW will, if

necessary, have communicated with the HUD office to determine

the amount of real estate taxes during construction and the

amount after completion to be used in processing the proposal.)

The initial formal HUD-FHA application will not be

processed by HUD. The application will be numbered and the fee

deposited as set out in the fiscal instructions. The fee

will be transferred to HEW by the Office of the Comptroller,

HUD-FHA, and is not thereafter refundable. A feasibility

letter, using the format set forth in 1-6.b.(l) of this

Handbook, will be issued to the sponsor. Copies of the

numbered application and copies of the feasibility letter

will be sent to the HEW regional office and to the Director,

Office of Unsubsidized Insured Housing, HUD-FHA, for their

files.

NOTE: In some instances, HEW may desire assistance from the

local HUD office in making their determination as to the

market values of land. If HEW requests assistance from

a HUD office, the HUD office will provide such technical

consultation and advice on the valuation of the site as

may be necessary. (The final determination as to value

remains the responsibility of HEW.)

[]{#__RefHeading___Toc173136115 .anchor}**3-2. HEW FINAL APPROVAL
LETTER**. [\<TOP\>](#_top)

a\. This letter will furnish:

\(1\) The individual dollar amounts applicable to all estimated

replacement cost items including land.

\(2\) The maximum mortgage amount (debt service mortgage) that

can be amortized from the estimated hospital income.

HUD will not issue a commitment in excess of this

amount. (HEW will indicate this maximum mortgage amount

if HEW determines that debt service is the controlling

criterion.)

\(3\) Land at the appraised \"as-is\" value. Off-site

construction is usually included in the construction

contract and covered by the payment and performance

bonds. If not included in the construction contract,

it will be shown under Item (3) Other Costs, and

completion assured in accordance with current HUD-FHA

requirements.

b\. Prior to issuing the final approval letter, the HEW Regional

Office will:

\(1\) If applicable, have reported to the areawide planning

group as required by Section 204 of the Demonstration

Cities and Metropolitan Development Act of 1966.

\(2\) Have checked for ineligible contractors and subcontractors.

Normal HEW procedure provides for review as

to ineligibility as designated by the Comptroller

General of the United States. The HEW Regional Office

\* will communicate with the Director Office of Multifamily

Housing Development in Headquarters to see if contractors \*

or subcontractors are on the HUD ineligible list.

\(3\) On proprietary facilities determine the amount of the

annual deposit to the Reserve Fund for Replacement.

\(4\) Indicate the amount of real estate taxes, if any, during

construction and upon final completion. (On proprietary

facilities real estate tax figures will be calculated by

HEW during the HEW feasibility processing, if necessary,

they may ask assistance of the HUD Field Office in

determining the amount of real estate taxes.)

\(5\) Operating deficit, if any, during the period of initial

operation will be determined by HEW. If such a deficit

is contemplated a provision for such contingency will

be set forth in the HUD commitment.

\(6\) The amounts, if any, determined by HEW for (3), (4), and

\(5\) will be entered on the HEW Final Approval Letter.

[]{#__RefHeading___Toc173136116 .anchor}**3-3. COMMITMENT**.
[\<TOP\>](#_top) Upon receipt of the final approval letter and the

amended HUD application, the case will be processed by the

Mortgage Credit staff of the HUD office. Upon completion of

processing, a firm commitment to insure a mortgage will be issued

to the mortgagee. The commitment will require the mortgagor to

provide assurance of completion and prevailing wage certifications.

It will also include a statement of the financial requirements

to be met by the mortgagor and will specify conditions

under which advances of the mortgage proceeds will be made.

Within 30 days from the date of the commitment, a commitment fee

must be paid which, when added to the application fee, will

aggregate \$3.00 per \$1,000 on the amount in the commitment. The

commitment fee is retained by HUD.

a\. HUD underwriting processing is limited to the estimation of

carrying charges, financing expense, title and recording

expense; establishing the maximum insurable mortgage amount

and financial requirements for closing; and processing

requests for advances of mortgage proceeds. (On proprietary

facilities, in addition to the foregoing, the HUD Field

Office will handle the Previous Participation Certificate,

Form FHA 2530 and may assist HEW in determination of real

estate taxes.)

(3-3) Mortgage Credit procedures and analysis are to be completed

in accordance with the following instructions, using Forms

FHA 2264 (Hosp) 2283 (Hosp) 2448 (Hosp), 2403, 2451, and

2580\. (See reference (1) of the Foreword for instructions.)

b\. Amount and amortization period of loan. The mortgage shall

involve a principal obligation in an even multiple of \$100

and a term not in excess of 25 years from the commencement

of amortization. Monthly payments to principal and interest

shall be based on the Level Annuity Monthly Payment Plan.

c\. Amount of loan.

\(1\) New construction - not involving rehabilitation or

reconstruction of existing structures. The insurable

mortgage amount shall not exceed the lowest of:

\(a\) \$50,000,000.

\(b\) 90% of the total estimated replacement cost including

mortgageable equipment and furnishings. (Less

90% of value of the leased fee, if leasehold, and/

or 100% of the principal amount of special

assessments if applicable.)

\(c\) 100% of the total estimated replacement cost

including mortgageable equipment and furnishings,

minus the amount of any loans, grants or gifts

from other sources which are of a nature that is

intended to offset cost and mortgage financing.

(Less value of the leased fee, if leasehold, and/

or 100% of the principal amount of special

assessments, if applicable.)

\(2\) Rehabilitation - Defined in paragraph 1-7.b. The

insurable mortgage shall not exceed the lowest of:

\(a\) The amounts set forth under new construction

\(b\) Property owned. 100% of the estimated current cost

of rehabilitation plus the lesser of (a) principal

amount of existing indebtedness against property,

if any, or (b) 90% of the estimated market value of

property before rehabilitation (less 90% of value

of leased fee, if leasehold, and/or 100% of the

principal amount of special assessments, if any).

(3-3) NOTE: When the hospital involves an expansion

primarily of existing facilities requiring

additional land, the mortgage shall not

exceed the sum of:

\(1\) The lesser of the amount of the existing

indebtedness against property, or 90% of

the \"as is\" value of the existing

facilities (less 90% of value of the leased

fee, if leasehold, and/or principal

amount of special assessments, if

applicable), plus

\(2\) The cost of new improvements (including

the cost of mortgageable items of

equipment) closing charges, fees, etc.,

plus

\(3\) 90% of the lesser of cost of additional

land or \"as is\" value of additional land.

\(c\) Property to be acquired. 90% of the estimated cost

of rehabilitation and new mortgageable equipment,

plus the lesser of (a) 90% of the actual purchase

price of property, or (b) 90% of the market value

of property before rehabilitation (less 90% of

value of leased fee, if leasehold, and/or 100% of

the principal amount of special assessments, if

any).

\(d\) Five times the sum of the cost of new improvements

and cost of mortgageable equipment which is not in

excess of the cost of new improvements.

NOTE: The word \"property\" as used in the foregoing

limitations means both real estate and mortgageable

items of equipment, And the word \"indebtedness\"

means an indebtedness against the real

estate and mortgageable items of equipment.

\(3\) If the maximum insurable mortgage is higher than the

amount approved by HEW, the commitment shall be issued

in the lower amount. When HEW approves a higher amount

than arrived at as shown above, it must be resolved

between the HEW Regional Office and HUD office.

d\. Over and above money for nonprofit hospitals. Because

nonprofit hospitals traditionally receive gifts and donations

during construction and, in the case of existing hospitals

which are being rehabilitated, income during construction,

in this program it is permissible, as set out in the FHA

Regulations, for the mortgagee to accept an unconditional,

irrevocable letter of credit in lieu of cash for over and

above money. (See paragraph 3-4. b.) (This provision is not

applicable to proprietary facilities, over and above money

on proprietary proposals must be in cash.)

[]{#__RefHeading___Toc173136117 .anchor}**3-4. INSURANCE OF ADVANCES**.
[\<TOP\>](#_top)

a\. Initial closing. If the project involves insurance of

advances during construction, there will be an initial

closing of the loan prior to beginning of such construction.

In cases where the parties cannot go to initial endorsement

immediately, the HUD office director may grant permission

to start construction prior to initial endorsement (after

receiving clearance from the HEW regional office) upon

execution of FHA Form No. 2415, Request for Permission to

Commence Construction Prior to Initial Endorsement for

Mortgage Insurance. This permission may be given upon a

showing that there are valid reasons why an immediate closing

is not practicable; there is every reasonable assurance that

closing will take place in the near future; and early start

of construction will not act to the detriment of the

Assistant Secretary-FHA Commissioner\'s interest.

FHA Form No. 1022, FHA Legal Requirements for Closing is used

to show the required documents. As required by the commitment,

a prior review of the documents will be made by HUD

and HEW to assure that they will be in order at initial

closing. A representative of HEW will attend the closing to

approve any document involving HEW participation. The

designated HUD HEW liaison man will coordinate in setting

the closing date. When all financial and other requirements

called for in the commitment have been met, HUD will initially

endorse the mortgage for insurance.

b\. Construction. Construction of the project may begin

immediately after initial closing.

(3-4) (1) Advances of mortgage proceeds will be requested on

Form FHA-2403, Application for Insurance of Mortgage

Proceeds, and processed in the same manner as under

other programs with the following exceptions:

\(a\) When the mortgagee accepts a letter of credit

in lieu of a cash deposit for over and above

money on a nonprofit project, all mortgage

proceeds may be approved for advance prior to

any demand being made under the letter of credit

for additional funds necessary to complete the

project.

\* (b) Requests for construction advances from either

mortgage proceeds, the mortgagor\'s cash deposit,

or letter shall reflect a 10 percent holdback.

In those instances where a construction manager

administers the construction contract, the

requirement for a 10 percent holdback may be

modified as follows:

1 Where a subcontractor has completed work, and

the supervisory architect so certifies, the 10

percent holdback for such work may be released

with the surety\'s consent. The portion of the

holdback attributable to the construction

manager\'s fee may not be released. \*

2 Under a Hill-Burton Grant, payments are made

to the mortgagor by the Hill-Burton State

agency. The mortgagor retains 10% of the

amounts advanced until final completion and

acceptance of all work covered by the construction

contract(s); provided, however, that the

architect may at any time after 50% of the

work has been completed, if he/she finds that

satisfactory progress is being made and written

consent of the surety has been obtained,

recommend that any of the remaining partial

\* payments be paid in full. Upon written advice

from the Department of Health, Education and

Welfare Regional Office that 50% or more of \*

construction has been satisfactorily completed;

that the surety\'s written consent has been

received; and that the remaining Hill-Burton

(3-4) payments (if applicable) will be made to the

contractor in full without a 10% deduction,

the HUD office will also approve advances

from the remaining mortgage amount without

a 10% holdback. See Form FHA-2403 (Hosp.)

Contractor\'s Requisition.

3 Timing of Hill-Burton payments. Hill-Burton

payments are usually made at the

10%-25%-50%-75%-95% and 100% completion stages,

after an inspection by the Hill-Burton State

agency.

(3-4) This method of payment and inspection will not

affect approval of mortgage advances on the

usual monthly basis by HUD, nor the method of

computing the pro-rata HEW and HUD share of the

amount requested by the contractor on Form

FHA-2448 (Hosp.).

\(c\) Non-realty equipment included in mortgage proceeds.

1 Not delivered to mortgagor by date of substantial

completion. Any equipment item not delivered

by date of substantial completion shall

be treated as \"incomplete on-site\" and included

in Form FHA-2456, Escrow Deposit Agreement, as

revised. The required cash escrow will be the

dollar amount applicable to the undelivered

items.

2 When an advance is requested only for mortgageable

equipment not included in the construction

contract, the request will be made separately

on Form FHA-2403 without an accompanying Form

FHA-2448 and without a 10% holdback being

required.

\(d\) During the construction period, an HEW Regional

Office representative will visit the site from time

to time to inspect the work being done. The

commitment may provide for payment of an inspection

fee of \$5.00 per \$1,000 of the mortgage amount set

forth in the commitment which must be paid to HUD

at the time of initial endorsement. The inspection

fee will be transferred by the Office of Finance

and Accounting, HUD to HEW

\(e\) Any discrepancies on Form FHA-2403 must be

satisfactorily explained before approval of the

advance by HUD. If problems arise during

construction, the HEW Regional Office, assisted by

the HUD office to the extent possible, will try to

resolve the matter. If the problem results in a hold

up of advances, or a work stoppage, the Director,

Office of Multifamily Housing Development, HUD, and

the Director, Health Care Facilities Service, HEW,

will be immediately advised by their respective

offices.

(3-4) (f) Construction changes. The insurable amount is set

at initial endorsement. Therefore, construction

changes are expected to be held to a minimum. All

construction changes must be reviewed and approved

by HEW. Generally, it is expected that the mortgagor

will pay for any change order resulting in an

increase in cost. If the cumulative net effect of

approved changes is in excess of \$2,500, the mortgagor

must show proof of payment or deposit the

necessary funds with the mortgagee.

1 Mortgage increase due to construction changes.

There may be some instances where a change

will involve a significant betterment, as

determined by HEW. If the mortgagor requests

an increase in the insurable mortgage because

of a significant betterment, which has the

approval of HEW, the HEW Regional Office will

advise HUD of its approval of the mortgage

increase, giving the new construction contract

amount and/or equipment cost, and increase in

architect\'s fee if any. The HUD office will

recompute the maximum insurable mortgage amount,

and advise the mortgagor and mortgagee, in

writing of the amount of increase that will be

recognized, and that the increase will be

disbursed at final endorsement. When construction

has been substantially completed, and no further

changes are anticipated, the mortgagee may submit

an amended application, and the HUD office

issue a Letter Agreement Authorizing Reopening

of Mortgage Transaction. (See reference (2)

of the Foreword.) Approval of the increase is

subject to payment of the usual application,

commitment and inspection fees on the increase.

a Upon return by the mortgagee of the letter

agreement, endorsed to evidence its acceptance,

one copy shall be forwarded to the HEW

Regional Office and one copy to the Director

of Unsubsidized Insured Housing Programs.

(3-4) b The mortgage increase will be accomplished

with no change in the interest rate or

amortization plan or in the maturity date of

the mortgage.

\(g\) AMPO (Allowance for Making Project Operational)

for nonprofit projects. This fund, as set out in

the Mortgagee\'s Certificate, FHA Form No. 2434, is

primarily for accruals during the course of

construction for mortgage insurance premiums, taxes,

ground rents, property insurance premiums and

assessments, when funds available for these purposes

under the Building Loan Agreement have been

exhausted; and also for allocation to such accruals

after completion of construction if the income from

the hospital at that time, is insufficient to meet

such accruals. This fund may also be used for such

other purposes as approved by HEW. Any balance

remaining unused in the fund at final endorsement

will be released to the mortgagor for deposit in

its general funds.

\(h\) Working Capital - Proprietary. Working capital

deposit not to exceed 2% of the amount of the

mortgage is required at initial endorsement to

provide a contingency fund to protect against

delay in completion of the project. It is to cover

costs which may accrue due to taxes, mortgage

insurance premiums, and assessments required by the

mortgage during the period between initial endorsement

and final endorsement of the mortgage for

insurance, which costs were not included in the

proceeds of the mortgage. (This deposit required

only in cases of insurance of advances. It is not

required in cases of insurance upon completion.)

\(2\) Completion of Construction. When construction is

completed, as determined by HEW, a completion date will

be established by HEW. The mortgagor must submit a

revised Hill-Burton application reflecting the final,

actual, project costs including all carrying charges

and financing and discounts. If a straight loan project

is involved, the information will be submitted by

certified statement from the mortgagor.

(3-4) (a) The HEW regional office will advise the HUD office

of completion of construction, together with the

date of completion, the actual project costs (in

the same format as the final approval letter) and

the dollar amounts of any incomplete on-site and

off-site items. Normal HUD-FHA cost certification

procedures are not applicable to this program.

1 The maximum insurable mortgage to be finally

endorsed by HUD will be the lesser of the

mortgage amount initially endorsed (committed

upon in insurance upon completion cases) or:

a New construction. 90% of the actual costs.

b Rehabilitation.

\(i\) Property owned. The actual cost of

the new work plus the lesser of

outstanding indebtedness or 90% of the

fair market value of the property

before rehabilitation.

\(ii\) Property to be acquired. 90% of the

actual cost of the new work plus the

lesser of 90% of the purchase price

or 90% of the fair market value of

the property before rehabilitation.

2 Incomplete off-site and on-site facilities will

be covered by a cash deposit with the mortgagee

under FHA Form 2456, Escrow Deposit Agreement

Except for landscaping and exterior improvements

which cannot be completed because of weather,

the amount of the escrow must be at least two

times the HEW Regional Office\'s estimate of the

cost of completion. The escrow for landscaping

and exterior improvements must be not less than

the estimate of cost of completion.

\(3\) Final advance. The final advance on nonprofit projects

will include any unused AMPO funds. These unexpended

funds will be released to the mortgagor for deposit in

its general funds. The sum to be approved for advance

is the balance of the mortgage proceeds based on the

maximum insurable mortgage as redetermined (FHA Form

2580\) in accordance with the limitations set forth above

under Completion of Construction.

c\. Final closing. FHA Form No. 1022, Legal Requirements for

Closing shows the documents required for final endorsement

of the mortgage note for insurance. A representative of HEW

will attend the closing to approve any document involving

HEW participation. The designated HUD-HEW liaison men will

coordinate in setting the closing date. Among other things,

the mortgagor will provide HUD and the mortgagee with a survey

showing the completed project, and a title insurance

policy, showing that the insured mortgage is a valid first

lien on the mortgagor\'s property and that the mortgagor\'s

title is free of all other liens (except any approved secondary

financing). If the non-realty items necessary for the

operation of the project are not covered by the lien of the

real estate mortgage, the mortgagor will furnish the mortgagee

with an appropriate chattel security instrument covering

such items. When all required closing documents have been

submitted and all commitment conditions met, the FHA will

place its final endorsement on the mortgage note showing

the amount approved for insurance.

d\. Supplemental Certifications - FHA Forms Nos. 2023 and 2455.

The supplemental certifications on these two forms concerning

the submission of evidence of unpaid items need not be

furnished in this program.

[]{#__RefHeading___Toc173136118 .anchor}**3-5. INSURANCE UPON
COMPLETION**. [\<TOP\>](#_top) If the project involves insurance

upon completion, construction of the project may begin when

approved in accordance with the commitment conditions. Prior to

the approval of the commencement of construction, the payment of

an inspection fee in the amount of \$5.00 per \$1,000 of the amount

of the mortgage set forth in the commitment must be paid on new

construction (on rehabilitation or modernization, the inspection

fee is \$5.00 per thousand on the cost of rehabilitation or

modernization).

a\. Over and above money. In an insurance upon completion case,

mortgage advances during construction are not insured. The

mortgage is insured when the project is satisfactorily

completed, free and clear of all liens, (except any approved

secondary financing). Therefore, there is no requirement

for a deposit of cash or irrevocable letter of credit for

the difference between total project cost and the mortgage

amount. However, assurances in a form satisfactory to HEW

may be required to show that the mortgagor has the financial

capacity to meet this difference.

b\. Construction changes. The procedure set out in paragraph

3-4.b.(1) will be followed except that, in lieu of the

Letter Agreement authorizing Reopening of Mortgage

Transaction, an amended commitment will be issued.

c\. Completion of construction. The procedure set out in

paragraph 3-4.b.(2) will be followed.

d\. Closing. The procedure set out in paragraph 3-4-c. will be

followed. The first mortgage insurance premium of 1/2 of 1%

of the mortgage amount must also be paid at this time.

[]{#__RefHeading___Toc173136119 .anchor}**3-6. OPERATION OF HOSPITAL**.
[\<TOP\>](#_top) Unless a default occurs, the HUD office

will have no servicing function. The annual financial report

will be requested from the mortgagor by HUD Central Office in

the usual manner, for submission to the HEW regional office.

HUD will not receive or file a copy of this report.

a\. In the event of a default, the HUD office will immediately

call upon the HEW regional office for a joint review of the

causes of default and for assistance in suggesting to the

mortgagor possible ways to cure the default.

b\. Releases from Reserve Fund for Replacements (proprietary)

will be handled by the HUD Field Office. On any unusual

request for release the office may ask advice of the HEW

Regional Office.

[]{#__RefHeading___Toc173136120 .anchor}**3-7. CORRESPONDENCE AND
DOCUMENTS**. [\<TOP\>](#_top) Plans and specifications, and

copies of the HEW processing documents will be maintained by the

HEW Regional Office. However, all other pertinent correspondence

and forms, whether originated or received by HEW or HUD will be

furnished each office. This will include copies of all approved

significant construction changes and construction inspection

reports being furnished to HUD, and copies of the application,

commitment and related processing documents, and each FHA Forms

No. 2403 and 2448 (Hosp) being furnished to HEW. In the event

of assignment or foreclosure, the plans, specifications and

processing documents will be made available to HUD.

[]{#__RefHeading___Toc173136121 .anchor}**3-8. COMBINATION FINANCING**
[\<TOP\>](#_top)

The Housing and Community Development Amendments of 1979 prohibit

the use of combination financing (FHA mortgage insurance, GNMA

mortgage-backed securities and tax exempt bonds) with certain

limited exceptions. Instructions for dealing with those limited

number of applications which may fall under either of the

exemption categories are contained in the following paragraphs.

a\. Eligibility for exemption to the prohibition of combination

financing can be met in two ways:

1\. An application for combination financing was submitted to

HEW (now HHS) prior to March 29, 1979, or

2\. The hospital is a nonprofit entity; and

\(a\) Prior to June 7, 1979 written notification was made

to HHS or HUD of the hospital\'s interest in

combination financing; and

\(b\) Prior to June 7, 1979 the hospital had engaged an

investment banker for, or had undertaken or arranged

for, the undertaking of a market or feasibility

study with respect to the advisability of

combination financing; and

\(c\) The hospital receives from Medicare or Medicaid a

percentage of its total revenue which is greater

than 125 percent of the national average for

hospitals.

b\. Applications for approval of combination financing under the

above exemptions will be processed by the HUD Field Office

having jurisdiction. In addition to the documentation

normally required for such approvals, the following material

shall be submitted:

1\. A financial comparison of the current and proposed

financing plans, showing the nature and amount of the

savings to the hospital to be achieved by the

conversion.

2\. For applicants under exemption number 2 above,

documentation demonstrating that prior to June 7, 1979,

the borrower engaged an investment banker or undertook or

arranged for a market or feasibility study of combination

financing.

c\. After receipt of an application for restructuring, properly

documented, the HUD field office shall request written

verification of the hospital\'s eligibility under the

statutory exemptions from the Director, Office of Multifamily

Housing Development, in Headquarters.

d\. After receipt of an application and written verification from

Headquarters indicating that the hospital proposal is

eligible, the field office will determine that:

1\. There is in fact a savings to the hospital.

2\. Fees in the restructuring are not excessive.

3\. Fees are to be paid from an acceptable source; i.e.,

cash, bond proceeds, or discounts realized on purchase of

existing GNMA securities.

4\. The amount of the tax exempt issue does not exceed the

outstanding mortgage balance.

e\. If the proposal meets all of the above, the HUD Office will

advise the mortgagor/mortgagee that we will approve the

restructuring provided the bond rate does not exceed that

rate stated in the application for restructuring.

f\. If the nonprofit applicant requests permission to modify the

mortgage to prohibit prepayment for the first 10 year period

in order to facilitate the bond transaction, such request may

be approved. Language changes must be reviewed and approved

by the Area Counsel.

g\. Upon completion of the tax exempt bond issue, the applicant

shall submit for HUD review a copy of the bond counsel

opinion and a copy of the No Arbitrage Certificate. Field

Offices shall review such documents to verify the fees,

charges, and other costs previously approved with respect to

the debt restructuring. Any instance where the information

disclosed in the aforementioned opinion and certificate

varies significantly from that contained in the application

shall be reported to the Director, Office of Multifamily

Housing Development for such action as may be necessary.

h\. To satisfy GNMA processing requirements, once the above

findings are made, the mortgagee of record (GNMA issuer)

shall be furnished with a letter which provides the revised

interest rate and states that the application satisfies the

Section 315 requirements as set forth in the Housing and

Community Development Amendments of 1979.

i\. Additional Requirement. Any excess proceeds realized from

the repurchased CLC\'s or PLC\'s after payment of expenses

shall be placed in the Sinking Fund which was required to be

established by HHS in conjunction with the initial

financing. Funds in this sinking fund, required by HHS, can

only be used for purposes approved by HHS and HUD.

j\. Increase in Mortgage Amount with Combination Financing.

Section 242 of the National Housing Act was amended in 1981

and provided that where combination financing was involved,

the Secretary has authority to approve an increase in the

mortgage amount at any time prior to final endorsement of the

loan. However, no increase in the mortgage amount may be

approved for the cost of constructing any improvements not

included in the original plans and specifications approved by

HHS unless approved by the Secretary of Health and Human

Services and the Secretary of HUD. If an increase is applied

for by the mortgagee for construction costs which were not

covered under the original plans and specifications, the

request must be sent to the Director, Office of Multifamily

Housing Development, in Headquarters in order to obtain the

approval of the Secretary of HHS and the Secretary of HUD.

Increases of this type are for minor cosmetic changes only.

No increases will be considered for structural changes,

additions, etc., nor for any increase in refinancing costs.

k\. GNMA Requirements. The mortgagee also must satisfy any

requirements established by GNMA.

l\. Departmental Processing. While HHS is the primary processing

agency in the Section 202 proposals, combination financing

processing will be handled by HUD since the proposals will

previously have been found feasible by HHS and the debt

service will be reduced. \*

# APPENDIX 1

[\<TOP\>](#_top)

#  

INSTRUCTIONS FOR PREPARATION OF

FHA FORM 2013-HOSP.

A. Indicate whether a Commitment for Insurance of Advances or a

Commitment to Insure Upon Completion is desired.

B. Indicate the total number of beds that will be in the proposed

hospital when completed.

B.8. A \"Proposed\" hospital is a completely new project, including

complete replacement of an existing hospital. An \"Existing\"

hospital is one that is to be rehabilitated (modernized)

including additions thereto.

C.4. Insert the cost of major movable equipment and furnishings.

C.6. Include interest, real estate taxes (if any) and insurance (fire

and extended coverage, public liability and other property

insurance) during the construction. Do not include any insurance

paid for by the contractor and included in the construction

contract.

In new construction cases, interest is estimated based on one-half the

mortgage amount requested for the number of months contemplated in the

construction period. In rehabilitation cases, interest is estimated on

2/3rd the mortgage amount requested because of the large initial advance

of mortgage proceeds to pay any outstanding indebtedness. If there is

no outstanding debt to be paid from mortgage proceeds use 1/2 the

mortgage amount as in new construction.

Financing expense (service charge) not to exceed 2% of the mortgage

amount may be included to compensate the construction lender for its

services during the construction period, plus a 1 1/2% FNMA fee (or

placement fee). Do not include any mortgage discount which may be

required.

AMPO (Allowance to Make Project Operational) of up to 2% of the
mortgagee

amount may be included on new nonprofit proposals.

Under Title and Recording Expense, include only the estimated actual

cost of the title search and title insurance, surveys, tax stamps and

other mortgage and recording fees.

Legal expenses shall include only necessary fees to legal counsel for

services in connection with the project and necessary expenses paid by

counsel for the account of the mortgagor, through final endorsement.

Do not include any items properly belonging under Title and Recording

Expense.

Organization expense shall include only reasonable expenses not
otherwise

classified and which are necessary for the creation of the mortgagor.

Consultant\'s fee is allowable only for nonprofit hospitals and then

only to the extent that it involves work in connection with plans and

specifications and the selection and purchase of equipment. Not
allowable

is the cost of conducting feasibility studies to determine need for

construction or modernization of a facility.

Land (Appraised Value) is the as-is value of the land (new construction)

or existing hospital (rehabilitation project) as determined by an

approved appraiser.

D.4. Enter the lower of the mortgage amount requested (plus

Hill-Burton and other grants, if any) or 90% of Item C.10, Total

Estimated Replacement Cost of Project.

D.6. Insert amount of permanent loan discount.

D.7. On proprietary proposals insert 2% of the mortgage amount. On

proprietary proposals a working capital deposit of 2% of the

mortgage amount is required.

On proprietary facilities delete the word NONPROFIT from the

title of the form and put PROPRIETARY.

NONPROFIT HOSPITAL - SECTION 242

APPLICATION FOR PROJECT MORTGAGE INSURANCE

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# APPENDIX 2 

[\<TOP\>](#_top)

[CERTIFICATE OF NEED FOR
HOSPITAL](http://www.hudclips.org/sub_nonhud/cgi/pdfforms/46151x02.pdf)
AND

ASSURANCE OF ENFORCEMENT OF STATE STANDARDS

# APPENDIX 3 

[\<TOP\>](#_top)

DEFINITIONS

1\. CONSTRUCTION

The term construction includes projects for the construction of new

buildings, and additions, expansion, remodeling, and alteration of

existing buildings, and initial equipment of any such buildings

(including medical transportation facilities).

A hospital complex of more than one individual building is eligible

for consideration, provided the entire complex is under the one

HUD-FHA insured mortgage.

2\. REHABILITATION

In the HUD-FHA insured program the term \"rehabilitation\" includes:

a\. ADDITION TO EXISTING FACILITIES. Projects for additions are

those which consist of additions to eligible facilities.

b\. MODERNIZATION. The term modernization includes replacement,

major repair, remodeling, alteration, and renovation of buildings

which are functionally or structurally obsolete (including

initial equipment) and replacement of obsolete built-in

equipment of existing buildings.

c\. REPLACEMENT. The term replacement means the replacement of an

obsolete hospital or any portion thereof, on the same site or

in the same service area. In the FHA program, replacement of

the entire facility will be treated as a new facility.

d\. MAJOR REPAIR. Projects for major repair are those which consist

of repairs to an existing building, excluding maintenance, which

restore the building to a sound state.

When a project involves rehabilitation, the addition, or remodeled,

altered or renovated building shall comply with the safety requirements

(fire, structural, electrical, etc.) of the General Standards, PHS

Publication No. 930-A-7, and applicable State and local codes. The
safety

provisions will apply only to the addition, or that portion or wing of

the existing building which is being rehabilitated except that a fire

wall extending the full height of the building shall be used to separate

the remaining areas of the existing building which do not conform to the

safety provisions of the General Standards.

DEFINITIONS (Continued)

3\. NONPROFIT

The term \"nonprofit\" as applied to any facility means a facility

which is owned and operated by one or more nonprofit corporations

or associations no part of the net earnings of which inures, or

may lawfully inure, to the benefit of any private shareholder or

individual.

4\. TITLE

The term \"title\" when used with reference to a site for a project,

means a fee simple, an option to purchase, or a leasehold interest

for not less than 50 years from the date the mortgage is executed,

or a 99 year renewable lease.

5\. SITE

The site is the tract or plot of land on which the facility is or

will be located and which is defined in the approved application.

6\. STATE AGENCY

The single State agency designated for the administration of the

Hill-Burton program, including the formulation and revision of the

State plan for health facility construction.

7\. FIXED EQUIPMENT

Any major equipment fixed to or any integral part of the building

structure (this is realty equipment under HUD-FHA).

8\. MOVABLE EQUIPMENT

Readily movable major items not fixed to the building structure

(non-realty equipment under HUD-FHA).

9\. PROPRIETARY FACILITY

The term \"proprietary\" as applied to any facility means a facility

which is owned and operated by a corporation, partnership, trust,

individual or any other qualified legal entity which is licensed

and regulated by the State and is not a nonprofit corporation.

# APPENDIX 4 

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ALLOWABLE AND NONALLOWABLE COSTS

1\. Advertising Costs:

Allowable Advertising costs incurred in obtaining

competitive bids.

2\. Insurance Coverage:

Allowable The cost to the mortgagor of insurance coverage

during the construction of the project,

including the following:

\(1\) The cost of the mortgagor\'s liability

insurance.

\(2\) The cost of insurance covering construction

in the event the insurance is carried

by the mortgagor rather than the contractor.

\(3\) The cost of insurance carried by the

mortgagor to protect equipment purchased by

the mortgagor against loss or damage.

3\. Architects Fees:

Allowable The cost of architectural services rendered

in connection with the project as approved,

including the cost of plans and specifications

prepared by State or political subdivisions,

where such agencies are the sponsors of

approved projects. The architect\'s fee may

be based on a contract between the architect

and the mortgagor setting forth the services

to be provided and the manner in which the

total fee will be determined. Regardless of

the manner in which the fee is determined,

Federal participation is limited to an amount

which is commensurate with accepted fees

within the area.

Not Allowable Payments to the architect for work which is

not a part of the approved project, abandoned

work, or work not put under contract and any

payment to the architect which is not provided

for in the architectural contract.

4\. Consultant Fees:

Allowable Consultant fees to the extent that they

(Non-profit only) involve work in connection with plans and

specifications and the selection and purchase of

equipment.

Not Allowable The cost of conducting feasibility studies to

determine need for construction or modernization

of a facility.

Not Allowable Consultant fees on proprietary facilities.

5\. Inspection:

Allowable The cost of supervision and inspection

provided by the architect or an employee of the

applicant at the site to ensure that the

completed work conforms with approved plans and

specifications.

6\. Equipment:

Allowable The actual coat of all essential initial

equipment purchased for the approved project

after filing the application with the regional

office. Such costs include the cost of

transportation, storage, and placement of

equipment and the cost of reconditioning

equipment which will be used in the project.

Essential initial equipment may include equipment

made necessary by the expansion, remodeling,

alteration, and modernization of an existing

building, even though the equipment may not

be located in expanded, remodeled, altered,

or modernized areas, except that equipment may

not be located in areas that do not comply

with the General Standards in PHS Publication

No. 930-A-7.

Not Allowable The cost of equipment which is purchased

through a conditional sales contract except

where the applicant can demonstrate that the

contract has been completed and title

transferred to the applicant.

7\. In Reserve.

8\. Bonus Payments to

Contractors:

Not Allowable Bonus payments made by the mortgagor to the

contractor for completing work in advance of

a specified time.

9\. Liquidated Damages:

Allowable Any amounts collected by mortgagors on bid

bonds of defaulting bidders or as liquidated

damages for failure of a contractor to

complete the work on time shall be disregarded

in determining the cost of construction.

10\. Damage Judgments

Against Sponsor:

Not Allowable Expenses incurred as damages arising out of

the construction or equipping of the project,

whether established by judicial determination,

arbitration, negotiation, or otherwise.

11\. Sales Tax:

Allowable The nonrefundable sales tax and Federal excise

tax which a mortgagor pays in connection with

constructing and equipping an approved project.

12\. Space for Private Practice

of Medicine:

Allowable The cost of office space intended for the

conduct of the private practice of medicine

or dentistry, where such space is owned by the

hospital and it is advantageous to both the

hospital and the community when judged on an

individual basis.

Allowable The cost of construction of office space

specifically for the use of a medical, dental or

optometric group practice plan which qualifies

under the provisions of Title XI of the

National Housing Act, is an allowable cost

when such space is located in a project

financed in whole or in part under Section 242

of the National Housing Act, \"Mortgage Insurance

for Nonprofit Hospitals.\"

13\. Space to be Leased to

Radiologist or

Pathologist:

Allowable The cost of space to house the radiology and

pathology services of the hospital and the

equipment therein Which is to be leased for

operation to a radiologist or pathologist.

The hospital must retain authority to control

the activities for which the space is utilized

to ensure that services to be provided in such

space are consistent with the needs and

requirements of the hospital.

14\. Space for Revenue

Purposes:

Not Allowable Cost for office and other space constructed

solely for revenue purposes or for the

convenience of the occupants as contrasted with

the operation of the facility.

15\. Space and Equipment for

Religious Activities:

Allowable The cost of space and equipment for the

provision of spiritual or religious services to

patients and staff in eligible medical facilities

where such services are appropriate to

the type of facility involved and reasonable

in amount.

Not Allowable Costs of any distinctly sectarian or

denominational features of construction or the

cost of equipment characteristic of, or peculiar

to, any sect or denomination.

16\. Fund Raising Expenses

\-- Memorial Plaques:

Not Allowable Costs incurred by the sponsor in raising the

non-Federal share of the cost of the project.

This includes memorial plaques inscribed with

the names of persons, business firms, or

other organizations, or book or remembrances

used to give recognition to contributors.

17\. Public Health Facilities in

Private Nonprofit Hospitals:

Not Allowable The cost of constructing and equipping facilities

in a hospital which are intended for the

provision of public health services by State

or local health departments.

18\. Gift Shops, Flower Shops,

and Snack Bars:

Allowable The cost of space and equipment providing

gift shop, flower shop, and snack bar services.

The need for and size of such space is to be

reviewed in the light of patient needs and

operation of the facility.

19\. Unfinished Space:

Not Allowable The cost of unfinished or partially finished

space. No proposal will be approved for a

facility containing unfinished space if the

projected use of the unfinished space will

exceed projected needs.

20\. Television:

Allowable The cost of purchasing and installing television

systems, including the antenna system.

The cost of a closed circuit television system

where the program of the facility justifies

such a system.

The cost of television sets for day-rooms for

short-term care facilities and a reasonable

number of sets for patient rooms. In arriving

at the \"reasonable number\", the length of

patient stay and occupancy rate as well as

other pertinent factors should be considered.

The cost of television sets for day-rooms for

long-term care facilities and one set for each

patient room.

The cost of television sets for the main

lounge of nurses\' dormitories.

21\. Fallout Protection:

Allowable Costs in providing reasonable radiation

fall-out protection including the cost of space

necessary to the establishment of a radiation

monitoring station.

22\. Housing Staff for Nursing

Home:

Allowable The cost of limited quarters for a nurse on

call for 24 hours in an approved project.

23\. Pictures and Murals:

Allowable The cost of pictures to the extent that the

number and cost are reasonable.

Not Allowable The cost of the painting of murals.

24\. Floor Finish Materials:

Allowable The cost of soft flooring materials such as

carpeting and resilient tile having a flame

spread rating of 75 or less when tested in

accordance with American Society for Testing

and Materials (ASTM) Standard No. E 84-61,

\"Method of Test for Surface Burning

Characteristics of Building Materials,\" subject

to the same limitations for Federal participation

that apply to the entire building; i.e.,

those costs which are reasonable and necessary.

[Guide Form - New Final Approval
Letter](http://www.hudclips.org/sub_nonhud/cgi/pdfforms/46151x07.pdf)

# APPENDIX 5 

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HEW REGIONAL OFFICES

REGION STATES

Regional Health Director, PHS/HSMHA Connecticut

ATTN: Acting Program Director Maine

Health Care Facilities Service Massachusetts

DHEW Region I New Hampshire

John F. Kennedy Federal Office Bldg. Rhode Island

Boston, Massachusetts 02203 Vermont

Regional Health Director, PHS/HSMHA New York

ATTN: Program Director New Jersey

Health Care Facilities Service Puerto Rico

DHEW Region II Virgin Islands

26 Federal Plaza, Room 1005

New York, New York 10007

Regional Health Director, PHS/HSMHA Delaware

ATTN: Program Director District of Columbia

Health Care Facilities Service Maryland

DHEW Region III Pennsylvania

401 North Broad Street, Room 420 Virginia

(mailing address - P.O. Box 12900) West Virginia

Philadelphia, Pennsylvania 19108

Regional Health Director, PHS/HSMHA Alabama

ATTN: Program Director Florida

Health Care Facilities Service Georgia

DHEW Region IV Kentucky

50 Seventh Street, N.W., Room 404 Mississippi

Atlanta, Georgia 30323 North Carolina

South Carolina

Tennessee

Regional Health Director, PHS/HSMHA Illinois

ATTN: Program Director Indiana

Health Care Facilities Service Minnesota

DHEW Region V Michigan

226 W. Jackson Boulevard, Room 204 Ohio

Chicago, Illinois 60606 Wisconsin

Regional Health Director, PHS/HSMHA Arkansas

ATTN: Program Director Louisiana

Health Care Facilities Service New Mexico

DHEW Region VI Oklahoma

1114 Commerce Street Texas

Dallas, Texas 75202

Regional Health Director, PHS/HSMHA Iowa

ATTN: Program Director Kansas

Health Care Facilities Service Missouri

DHEW Region VII Nebraska

Federal Office Building

601 East 12th Street

Kansas City, Missouri 64106

Regional Health Director, PHS/HSMHA Colorado

ATTN: Acting Program Director Montana

Health Care Facilities Service North Dakota

DHEW Region VIII South Dakota

9017 Federal Office Building Utah

19th & Stout Streets Wyoming

Denver, Colorado 80202

Regional Health Director, PHS/HSMHA Arizona

ATTN: Acting Program Director California

Health Care Facilities Hawaii

DHEW Region IX Nevada

50 Fulton Street American Samoa

San Francisco, California 94102 Guam

Trust Territories

Wake Island

Regional Health Director, PHS/HSMHA Alaska

ATTN: Program Director Idaho

Health Care Facilities Service Oregon

DHEW Region X Washington

Arcade Building

1321 Second Avenue

Seattle, Washington 98101

#  APPENDIX 6 

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STATE AGENCIES ADNINISTERING THE HOSPITAL AND MEDICAL FACILITIES

SURVEY AND CONSTRUCTION (HILL-BURTON) PROGRAM

Alabama Delaware

State Health Officer Executive Secretary

State Department of Public Health State Board of Health

Montgomery, Alabama 36104 Dover, Delaware 19901

Alaska District of Columbia

Commissioner Director of Public Health

Department of Health and Welfare District of Columbia

Juneau, Alaska 99801 Department of Public

Health

Washington, D. C. 20001

Arizona Florida

Commissioner Director

State Department of Health Division of Community

Phoenix, Arizona 85007 Hospitals and Medical

Facilities

Board of Commissioners of

Arkansas State Institutions

Tallahassee, Florida State Health

Officer

Tallahassee, Florida 32304

State Board of Health

Little Rock, Arkansas 72201 Georgia

Director

California Georgia Department of

Public Health

Director of Public Health Atlanta, Georgia 30334

State Department of Public Health

Berkeley, California 94704 Guam

Colorado Director

Department of Public

Director of Public Health Health and Social

State Department of Public Health Services Territory of

Denver, Colorado 80220 Guam

Agana, Guam 96910

Connecticut Hawaii

Commissioner of Health Director of Health

State Department of Health Hawaii Department of

Hartford, Connecticut 06115 Health

Honolulu, Hawaii 96801

Idaho Maine

Administrator of Health Commissioner

Idaho Department of Health Maine Department of

Boise, Idaho 83710 Health and Welfare

Augusta, Maine 04330

Illinois Maryland

Director of Public Health Commissioner of Health

Illinois Department of Public Health State Department of

Springfield, Illinois 62706 Health

Baltimore, Maryland

21201

Indiana Massachusetts

Secretary, State Board of Health Commissioner of Public

and State Health Commissioner Health Massachusetts

Department of Public Health State Board of Health

Indianapolis, Indiana 46207 Boston, Massachusetts

02133

Iowa

Michigan

Commissioner of Public Health

State Department of Health Director of Public Health

Des Moines, Iowa 50319 Michigan Department of

Public Health

Kansas Lansing, Michigan 48914

State Health Officer Minnesota

Kansas State Department of Health

Topeka, Kansas 66612 Secretary and Executive

Officer Minnesota

Department of Health

Kentucky Minneapolis, Minnesota

55440

Commissioner of Health Mississippi

State Department of Health

Frankfort, Kentucky 40601 Executive Director

Mississippi Commission on

Louisiana Hospital Care

Jackson, Mississippi

Director 39205

Louisiana Department of Hospitals

Baton Rouge, Louisiana 70804

Missouri New Mexico

Director of Health Director

Division of Health New Mexico Department of

Missouri Department of Health and Social

Public Health and Welfare Services

Jefferson City, Missouri 65102 Santa Fe, New Mexico

87501

New York

Montana

Commissioner of Health

Executive Officer and Secretary State Department of

State Department of Health Health

Helena, Montana 59601 Albany, New York 12208

North Carolina

Nebraska

Executive Secretary

Director of Health North Carolina Medical

Nebraska Department of Health Care Commission

Lincoln, Nebraska 68509 Raleigh, North Carolina

27603

Nevada North Dakota

State Health Officer State Health Officer

Division of Health State Department of

State Department of Health, Health

Welfare, and Rehabilitation Bismark, North Dakota

Carson City, Nevada 89701 58501

Ohio

New Hampshire Director of Health

Ohio Department of Health

Director Columbus, Ohio 43215

Division of Public Health

N. H. Department of Health and Welfare Oklahoma

Concord, New Hampshire 03301

Acting Commissioner of

Health

New Jersey State Department of Health

Oklahoma City, Oklahoma

Commissioner, State Department 73105

of Institutions and Agencies

Trenton, New Jersey 08625 Oregon

State Health Officer

State Board of Health

Portland, Oregon 97201

Pennsylvania Utah

Secretary of Public Welfare Director of Public Health

State Department of Public Welfare State Department of

Harrisburg, Pennsylvania 17120 Health

Salt Lake City, Utah

84113

Puerto Rico Vermont

Secretary of Health State Health Commissioner

Puerto Rico Department of Health Vermont Department of

San Juan, Puerto Rico 00924 Health

Burlington, Vermont 05402

Rhode Island Virginia

Director of Health State Health Commissioner

Rhode Island Department of Health State Department of

Providence, Rhode Island 02903 Health

Richmond, Virginia 23219

South Carolina Virgin Islands

State Health Officer Commissioner of Health

State Board of Health Virgin Islands Department

Columbia, South Carolina 29201 of Health

St. Thomas, Virgin

Islands 00801

South Dakota

Washington

State Health Officer

State Department of Health Director of Health

Pierre, South Dakota 57501 State Department of

Health

Olympia, Washington 98502

Tennessee

West Virginia

Commissioner of Public Health

Tennessee Department of Public State Director of Health

Health State Department of

Nashville, Tennessee 37219 Health

Charleston, West Virginia

25311

Texas Wisconsin

Commissioner of Health State Health Officer

State Department of Health State Board of Health

Austin, Texas 78756 Madison, Wisconsin 53702

Wyoming

Assistant Director of Public Health

State Department of Public Health

Cheyenne, Wyoming 82001