Mid-Atlantic Healthcare, a growing chain of skilled nursing facilities purchased Chapel Hill Nursing and Rehabilitation Center in Randallstown, Maryland in June 2008, subject to a HUD guaranteed financing already in place. At that time, HFC had obtained the Transfer of Physical Assets approval from HUD to permit the purchase.
HFC suggested that Mid-Atlantic pursue an (a)7 refinance to lower the interest rate as well as to concurrently gain HUD approval for a proposed $350,000 Line of Credit from their commercial bank. This refinance lowered their interest rate by 163 basis points as well as re-extended their amortization period to 35 years. The result was a $132,405 drop in annual debt service and an addition of $38,452 in loan proceeds into repairs and the building reserve for future improvements.