WASHINGTON, DC – September 23, 2010 – (RealEstateRama) — The U.S. Department of Housing and Urban Development (HUD) today announced a commitment to insure a mortgage loan to Hayes Green Beach Memorial Hospital in Charlotte, Michigan. The $36.6 million loan is made possible through the Federal Housing Administration’s (FHA) Section 242 Hospital Mortgage Insurance Program.
The loan will be used to expand and relocate certain outpatient healthcare services to a new site and to refinance $22.6 million of long-term debt on the existing 25-bed Critical Access Hospital. Expanded and relocated services will include a women’s resource center and a mammography service clinic. Funds will also be used for the purchase of new equipment and related charges.
“FHA is helping health care facilities like this all across the country,” said FHA Commissioner David Stevens. “By helping to make these projects possible, FHA also contributes to the financial well-being of communities by creating jobs to stimulate local economies.”
HUD estimates the Hayes Green Beach Memorial Hospital construction project will support 230 full-time jobs and provide an estimated economic stimulus of more than $37.8 million to the community. Once completed, it is estimated the project will support 138 full-time jobs and provide an annual economic benefit of more than $20 million.
Existing operations of the Hospital include: 24-hour emergency room, urgent care, homecare, gastroenterology, internal medicine, laboratory services, inpatient medical and surgical care, outpatient medical and surgical care, radiology, respiratory services, rehabilitation (physical, occupational and speech therapies) and a wellness center.
Approximately $22.6 million of the new mortgage proceeds will be used to refinance Series 2004 variable rate demand bonds. The purpose of the 2004 issue was to replace a large portion of the Hospital’s physical plant (including the medical/surgical unit, OB department, radiology department, emergency room, and reception/registration area), purchase equipment, and refinance debt (a 2003 bond issue, also used for capital projects).
By insuring the mortgage loan, FHA is enabling the hospital to obtain lower cost financing that will save an estimated $14 million in interest expense over the life of the loan. Since 1968, FHA has insured 386 mortgages to hospitals throughout the nation, 45 within the past five years.
FHA’s Section 242 Mortgage Insurance Program for Hospitals provides HUD-insured mortgages made by private lending institutions to finance construction or renovation of acute care hospitals including major equipment needed to operate the facility. Eligible applicants can be public, proprietary, or nonprofit hospitals certified by the responsible State agency.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.