Egle Nursing Home, a 66 bed skilled nursing facility in Lonaconing, Maryland, had a HUD guaranteed loan in place with a 6.5% interest rate. Given upcoming changes in Maryland’s Medicaid reimbursement system, finding opportunities to reduce costs became critical. HFC suggested HUD’s new, low cost Note Modification program through their existing lender to reset the interest rate without the need for a new appraisal or Physical Needs Assessment analysis. Although their existing note carried a 5% prepayment penalty, Egle was able to fix a rate that yielded enough premium to cover the penalty and still lower their interest rate by 152 basis points. The borrower was able to complete this transaction with no cash contribution toward settlement.
Posted in Recent Transactions.