Executive Summary—Substantial Rehabilitation Initial Submission FHA number: Project name: Project location: <<street address, city, county, state, and zip code>> Lender’s name: Lenders UW: UW trainee: Borrower: Operator: Parent of operator: Management agent: General contractor: License holder: Borrower Operator Management agent Residents will contract with: <<Entity with whom residents will contract for services>> Section 38 of the Regulatory Agreement shall apply to the following individuals and/or entities (list name(s)): Type of Facility As Is: Licensed Operating Licensed Operating Skilled Nursing (SNF): beds units Assisted Living (AL): beds units Memory Care (AL): beds units Board & Care (B&C): beds units Independent Living (IL): beds units Total: beds units Type of Facility As Rehabilitated: Skilled Nursing (SNF): beds Assisted Living (AL): beds Memory Care (AL): beds Board & Care (B&C): beds
Independent Living (IL): beds Total: beds Mortgage Amount: $ Loan-to-value: % Loan to transaction cost: % Term: years Interest rate: % Principal & interest: (without MIP) $ DSCR (with MIP): % Market value per bed/unit*: $ Underwritten market value: $ Cap rate: % Mortgage amount per bed/unit*: $ *Use per bed for SNF, or facilities with multiple care types (e.g., SNF/ALF). Use per unit for ALF only. Mortgage Criteria: Sensitivity Analysis: Criterion A: Requested loan amount: $ A 1.0 debt service coverage is still realized if: Average rental drops $ per month. Occupancy rate decreases %. Operating expenses increase % per year. Annual net operating income (NOI) decreases $ or %. Medicaid Rate could decrease by $ or %. Medicaid Census could decrease %. Criterion C: Amount based on replacement cost: $ Criterion D: Amount based on loan-to-value: $ Criterion E: Amount based on debt service coverage: $ Criterion F: Amount based on estimated cost of rehabilitation plus: $ Criterion L: Amount based on deduction of grant(s), loan(s), LIHTCs, and gift(s) for mortgageable items: $ As-Is: As rehabilitated:
Initial Operating Deficit: Absorption rate/no. units per month: No. months to cover shortfalls: Breakeven Occupancy %: Working Capital: $ Cash Investment: $ Debt Service Reserve Escrow: $ No. months of principal & interest payments: Offsite Escrow: $ Minor Movable Equipment Escrow: $ Demolition: $ Other: $ TOTAL Without Land Equity: $ % of total project cost: %* TOTAL With Land Equity: $ % of total project cost: %* *Total project cost is the total uses on the Form HUD-92264a-ORCF. Land Equity (Calculation of Warranted Price of Land): <<Describe whether land is currently owned or will be acquired, purchase price, date of purchase, part of larger parcel or planned unit development, etc.>> Front Money Escrow (Total Cash Requirement minus Escrows): Cash requirement will be met by: <<pre-paids, letter of credit, sponsor, etc. Example: “Borrower’s cash and letters of credit.”>> Based on a review of the principals <<identify principal(s)>> their net worth is estimated at $ ; their liquidity meets/exceeds $ . Estimates at Initial Submission Construction contract: $ Offsites $ Demolition $ Total construction costs: $ Construction contingency: $ Relocation escrow: $ Construction period: # of months: Architectural contract: $ Multiple AIA Agreements Year FTE’s As reported on Form Operating Revenues SWB As reported on Form Operations – Base year $ $ Operations – Post construction $ $ ORCF
appraiser’s due to requirements (e.g., specific reserve requirements, tax abatements that the appraiser was not allowed to recognize, or unusual management fees) will be used for loan sizing based on debt service coverage. >> Capitalization Rate – As Rehabilitated <<The selection of the capitalization rate should be based primarily on recent sales rather than from investment models. Ideally, these rates would come from the Building Sales Comparables. However, these are often chosen by location before sale date. Recent cap rate data should be included every time, even if an additional set of cap rate comps or a survey needs to be introduced. In the table below, please add columns or duplicate the table as needed to accommodate additional comps.>> (Double click inside the Excel Table to add information) <<Provide narrative discussion as necessary. An equivalent analysis of the information provided above is required. For continuum of care facilities (e.g., skilled and assisted living), it may be appropriate to provide a separate schedule for each care type. Additional analysis can be provided at the lender’s option to support its conclusion Sales Comparison Approach – As Rehabilitated <<If large adjustments are required in the sales comparison approach, extra attention and explanation are required to support the determination of the adjustments. Generally, those sales that require the smallest adjustment are the most desirable.>> (Double click inside the Excel Table to add information) Price per Unit/Bed – As Rehabilitated <<Provide narrative discussion. An equivalent analysis of the information provided above is required. For continuum of care facilities (e.g., skilled and assisted living), it may be appropriate to provide a separate analysis for each care type. Include a general discussion of adjustments made to the sales and which comparables best represent the subject facility. Additional analysis can be provided at the Lender’s option to support its conclusion, as appropriate.>> Effective Gross Income Multiplier (EGIM) – As Rahabilitated <<Provide narrative discussion. An equivalent analysis of the information provided above is required. For continuum of care facilities (e.g., skilled and assisted living), it may be appropriate to provide a separate analysis for each care type. Additional analysis can be provided at the lender’s option to support its conclusion, as appropriate.>>
commitment requiring the lease payment be revised to meet or exceed this minimum.” If the lease payment does not need to increase, add the following language: “The current lease payment is sufficient. The recommended annual lease payment also provides the operator with an acceptable profit margin.”>> Responsibilities <<Provide a description of the responsibilities of the lessor and lessee under the terms of the lease with regard to the following: payment of real estate taxes, maintenance of building, capital improvements, replacement of equipment, property insurance, etc.>> Master Lease Program Guidance: Handbook 4232.1, Section II Production, Chapter 13. It is the lender’s responsibility to read the handbook chapter and provide HUD with a full set of documents for review of the proposed master lease or alternative master lease structure. Key Questions Yes No Are three or more projects (or two projects with an aggregate total mortgage loan amount greater than $15 million) being submitted to HUD that are under common control or have the same ownership? Have projects under common control or with the same owernshipapplied for mortgage insurance within the past 18-months OR will projects under common control or with the same owernship apply for mortgage insurance or TPA within the next 18 months? N/A Is the parent of the operator the same for all of these projects? N/A If you answered “yes’ to all three questions, a master lease or master lease alternative is required. Yes No Is a new master lease proposed for the subject project? Will the subject project be joined to an existing HUD master lease? Do the borrower principals currently participate in any other HUD master leases? Does the parent of the operator currently participate in any other HUD master leases? <<Provide a narrative describing the terms and conditions of the master lease proposed payments to and from the master tenant, , lease agreements between borrower, master tenant and subtenants, the flow of funds from the subtenants to the master tenant and the borrower (including the AR lender if applicable), and any waivers or requests for modification to standard requirements. .