FHA Says Yes to Hospital Refi Loans

The Federal Housing Administration will now provide mortgage loan insurance on refinanced commercial loans collateralized by hospitals. Previously, hospital owners could only get FHA insurance on loans that included a substantial construction component such as replacing, rebuilding, or renovating existing structures. "This refinance program will help hospitals struggling with skyrocketing interest rates and limited credit options," said HUD Secretary Shaun Donovan. "The savings provided through FHA refinancing should also help hospitals decrease the cost of healthcare, which is a major priority of the Obama Administration." HUD is prepared to accept refi applications as soon as lenders are prepared to submit them. The application process will be similar to that for construction loans, but it is expected to be faster and with fewer required steps. HUD anticipates that full applications will start to be received in August and that, following application review, insurance commitments for refis will start being issued in October.