For Elderly Developments, there are several financing options available. These include government-backed loan programs, conventional loans from banks, credit unions, and other private lenders, and Small Business Administration (SBA) loans.
Government-backed loan programs offer some of the best terms available, such as low interest rates and long amortization periods. Examples of government-backed loan programs include FHA 221(d)(4) loans, HUD 232 loans, and HUD 232/223(f) loans.
Conventional loans from banks, credit unions, and other private lenders are another loan option to consider when financing senior housing properties. However, it is important to keep in mind that because they are not insured by government-backed entities, conventional loans generally have higher interest rates, shorter amortization periods, and more rigid credit score requirements. Nonetheless, conventional loans can close faster, and can offer more flexible loan terms.
The SBA 504 program is an affordable financing vehicle for those who want to improve, build, or acquire an assisted living facility. The SBA 504 program provides long-term, fixed-rate loans, and requires only a 10% down payment. The SBA also offers additional funding for those who wish to become more environmentally friendly through the SBA 504 Green Program. To become eligible, borrowers must cut their facility’s energy use by 10% by implementing green options such as wind, solar or geothermal power, or invest in a new property that uses 10% less energy.
For more information, please visit SBA 504 Loans and Conventional Loans.