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Catalog of Federal Domestic Assistance

Program Descriptions

14.128:  Mortgage Insurance: Hospitals

Popular Name:  242 Hospitals

Objectives:  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.

PROGRAM AND AWARD	FINANCIAL AND INFORMATION CONTACTS
ELIGIBILITY REQUIREMENTS	FINANCIAL AND ADMINISTRATIVE INFO.
APPLICATION AND AWARD PROCESS	INFORMATION CONTACTS
RELATED PROGRAMS	ASSISTANCE CONSIDERATIONS
PROGRAM ACCOMPLISHMENTS	POST ASSISTANCE REQUIREMENTS

14.128 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.

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

Credentials/Documentation:  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, or alternative study if there is no State Agency requirement, is necessary. This program is excluded from coverage under OMB Circular No. A-87.

14.128 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  An applicant is required to furnish detailed information about the proposed hospital including State Certificate of Need to the Central Office of the Division of Facilities Loans, Department of Health and Human Services. This program is excluded from coverage under OMB Circular No. A-102. This program is eligible for coverage under E.O. 12372," Intergovernmental Review of Federal Programs."

Application Procedure:  The sponsor submits a formal application through the local HUD Field Office to the Department of Health and Human Services. This program is excluded from coverage under OMB Circular No. A-110.

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

Deadlines:  None.

Range of Approval/Disapproval Time:  Processing time depends upon the complexity of the proposal and the degree of preparation by the sponsor.

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

Renewals:  The term of a commitment to insure advances is effective for 180 days from the date of issuance and may be extended for good cause.

Criteria for Selecting Proposals:  Not applicable.

Examples of Funded Projects:  Not applicable.

Range and Average of Financial Assistance:  $360,000 to $591 million, average is $29 million.

14.128 RELATED PROGRAMS:

• 14.129 Mortgage Insurance: Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities;
• 14.116 Mortgage Insurance: Group Practice Facilities.

14.128 PROGRAM ACCOMPLISHMENTS:

Six new project mortgages totaling $274 million. Tax exempt bond refundings: 2 totaling $19 million. Tax exempt equipment leasing programs: 3 totaling $23 million. Mergers: 2 totaling $410 million.

14.128 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Type of Assistance:  Guaranteed/Insured Loans.

Obligations:  (Mortgage insurance commitments) FY 99 $230,000,000 FY 00 est $1,030,000,000 and FY 01 est $1,030,000,000.

Budget Account Number:  86-4077-0-3-371.

Authorization:  National Housing Act, as amended, Section 242; 12 U.S.C. 1715z-7; Public Law 90-448, Public Law 92-609; Public Law 93-383, 82 Stat. 476; Public Law 95-128, and Public Law 96-183.

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.

14.128 INFO CONTACTS:

Regional or Local Office:  None.

Headquarters Office:  Office of Insured Health Care Facilities, Department of Housing and Urban Development, Washington, DC 20410. Phone: (202) 708-0599. Division of Facilities Loans, Department of Health and Human Services, Rockville, MD 20857. Phone: (301) 443-5317.

(See Appendix IV for more contact info.)

14.128 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 $3 per $1,000 of the mortgage amount. The HUD inspection fee may not exceed $5 per $1,000 of the mortgage amount.

Length and Time Phasing of Assistance:  The maximum mortgage term may extend for 25 years.

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.

14.128 POST ASSISTANCE REQUIREMENTS:

Reports:  Any change of the mortgagor during the period of mortgage insurance must be approved by HUD. Defaults in meeting the mortgage terms must be reported. Mortgagors are required to submit annual audited financial statements to HHS. Approved mortgagors must furnish copies of their latest financial statements upon request by HUD or HHS.

Audits:  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.

Records:  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.