Mortgage Insurance_Hospitals

To facilitate the affordable financing of hospitals for the care and treatment of persons who are acutely ill or who otherwise require medical care and related services of the kind customarily furnished only or most effectively by hospitals.

Agency - Department of Housing and Urban Development

The Department of Housing and Urban Development's mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. HUD fulfills this mission through high ethical standards, management and accountability, and by forming partnerships with community organizations.

Program Accomplishments

HUD issued 9 insurance commitments for acute care hospitals in FY 2007. It is expected that approximately 7 new mortgages will be insured in FY 2008 through Section 242 and 241.

Uses and Use Restrictions

HUD insures lenders against loss on mortgages.

The loans may be used to finance the construction, modernization, equipment, or refinancing of acute care hospitals.

Eligibility Requirements

Applicant Eligibility

Qualified applicants can be either profit or not-for-profit hospitals licensed or regulated by the State, municipality, or other political subdivision.

At least 50 percent of the care must be for general acute patients (this requirement has been eliminated for hospitals specifically designated as Critical Access Hospitals as part of Public Law 108-091).

Beneficiary Eligibility

Persons needing the services of these hospitals benefit by using the modernized facilities supported by the insured mortgages.


Documentation regarding the characteristics of the property and the qualifications of the mortgagor are assembled by the mortgagee and submitted with the application. A Certificate of Need from the appropriate State agency is needed if that State has a Certificate of Need process. This program is excluded from coverage under OMB Circular No. A-87.

Aplication and Award Process

Preapplication Coordination

Interested parties should contact the program office with information about the proposed project before preparing an application.

This program is excluded from coverage under OMB Circular No.


This program is eligible for coverage under E.O.

12372," Intergovernmental Review of Federal Programs." Recipients should consult the office or the official designated as the single point of contact in its respective State for more information on the process the State requires to be followed when funds are used for the planning or the construction (reconstruction or rehabilitation) of water or sewer facilities.

Application Procedures

The sponsor submits a formal application to the Office of Insured Health Care Facilities, Room 9224, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedures

The Federal Housing Commissioner makes final decisions to approve, hold, or reject individual projects.




National Housing Act, as amended, Section 242; 12 U.S.C. 1715z-7; Public Law 108-091.

Range of Approval/Disapproval Time

Processing time depends upon the complexity of the proposal and the degree of preparation by the sponsor.


If an application for mortgage insurance is refused, the reasons for the refusal will be stated. The applicant may reapply.


The term of a commitment to insure advances is typically effective for 90 days from the date of issuance and may be extended for good cause.

Assistance Considerations

Formula and Matching Requirements

The maximum mortgage amount may not exceed 90 percent of the estimated replacement cost of the hospital including the installed equipment. The mortgage insurance premium is based on one-half percent of the average monthly amortized unpaid principal balance for the forthcoming year. The combined HUD application and commitment fees are 0.3 percent of the mortgage amount. The HUD inspection fee may not exceed 0.5 percent of the mortgage amount.

Length and Time Phasing of Assistance

The mortgage term is 25 years.

Post Assistance Requirements


Defaults in meeting the mortgage terms must be reported.

Mortgagors are required to submit annual audited financial statements to HUD.

Approved mortgagors must furnish copies of their latest financial statements upon request by HUD.


The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor in order to determine their compliance and conformance with HUD regulations and standards.


Mortgagees and mortgagors are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and FHA regulations. Records must be kept in accordance with State and Federal Regulations during the construction phase.

Financial Information

Account Identification



(Mortgage insurance commitments) FY 07 est $846,348,500; FY 08 est 825,000,000; and FY 09 est $1,100,000,000.

Range and Average of Financial Assistance

$1,950,000 to $278,500,000; $71,911,778.

Regulations, Guidelines, and Literature

Code of Federal Regulations (Housing and Urban Development) Part 200; Mortgage Insurance for Hospitals, (HUD Handbooks 4615.1; 4615.2) no charge.

Information Contacts

Regional or Local Office


Headquarters Office

Office of Insured Health Care Facilities, Department of Housing and Urban Development, 451 7th Street, Room 9224, Washington DC 20410. Paul Giaudrone, Senior Financial Analyst. Telephone: (202)708-0599; E-mail:

Criteria for Selecting Proposals

Not applicable.

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