Loans may be insured to finance the construction of new facilities, the acquisition of existing buildings, or facility expansion, modernization, and renovation. As well, loan guarantees are available for the financing of fixed or moveable equipment needed to operate the facility. As detailed in the Cal-Mortgage Loan Insurance Application Package , the process for obtaining loan guarantee includes several steps. Cal-Mortgage staff conduct a preliminary review of the proposal to assess eligibility and community need for the proposed project. After submission of a formal application for insurance, staff make a preliminary determination as to the eligibility of the applicant.
Next staff assess the financial feasibility of the project.
The application is then reviewed by the Advisory Loan Insurance Committee , a pro bono citizen advisory committee with experts in the field of health facility financing, construction, and operations. This enables the health facility to secure the needed financing, either from financial institutions or by issuing bonds. Financing is then arranged, typically through the sale of bonds, and a contract of insurance and regulatory agreement with the project are executed. Once the financing is completed, Cal-Mortgage staff monitor the financial performance of the insured health facilities in order to assure that timely debt service payments are made.