Nursing home financing can be required for a number of different applications including financing a purchase, a facility expansion, new construction, or refinancing and existing nursing home mortgage that may or may not require incremental capital for debt consolidation.
For each type of nursing home financing application and geography, there are going to be different lender solutions potentially available in the market place.
As an example, a well established nursing home with solid cash flows can acquire mortgage financing directly from “A” lenders provided that the loan to value fits within their criteria.
Some “A” lenders will require the nursing home owners to acquire mortgage insurance to help cover off the risk of loss for deals up to 85 loan to value.
When nursing home properties cannot quite cover off the debt servicing requirements of “A” lenders, there is also a secondary market that can be available to the borrower to secure financing at slightly higher rates.
In cases where there may be slightly lower cash flow, the lending risk can be offset by larger equity in the property, further protecting the lender from any potential future loss.
With respect to construction, depending on the specific requirements for the project and funds available to invest, nursing home construction financing solutions can come from bank or institutional lenders, sub prime lenders, and private mortgage lenders.
The key in all cases is to clearly understand the requirements of the borrower and the project and then match them up with the most relevant nursing home financing options available on the market.
The best way to do this in most cases is to work through a commercial broker who has access to variety of different lenders that would potentially be interested in debt financing for a nursing home property.
If you’re starting the process to look for nursing home financing, or are in the middle of a project and have an immediate need, I suggest that you give me a call so we can go through your requirements together and discuss potential nursing home mortgage loan financing options available to you for your consideration and review.
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel