Tuesday, December 1, 2015

Assisted Living Conversion Program

Dana Halvorson 

In a November 22, 2015, article in Senior Housing News entitled, “Financing Without Fear: Program Expands Senior Housing Lending Options,” author Amy Baxter stated, “Would you convert senior housing units into assisted living, if doing so would lead to refinancing problems down the line?"  Previously, some providers faced this choice in the past. But all that has changed, due to new rules under a U.S. Department of Housing and Urban Development (HUD) program.

The Assisted Living Conversion Program (ALCP) provides grants to nonprofit owners to convert a portion of their units into an assisted living facility. Previously, properties that received ALCP grants were blocked from using FHA mortgage insurance through HUD’s Sec. 223(f) and Sec. 221(d)(4) programs.  "Lenders can now tap into these HUD programs to refinance or rehabilitate properties that have undergone a conversion through ALCP, so long as less than 75% of its units and residents receive assisted living services. They no longer have to fear that if they utilize ALCP to expand assisted living, future renovations or refinancings on the property will have to be financed through non-HUD channels."

To read the full article, please click here. In addition, more on the ALCP can be found on the HUD website, and in this Lancaster Pollard article by Ryan Miles.

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