The Process

Expert guidance and continued customer care throughout the application, closing and servicing of your loan.

Underwriting

One of the keys to success for any transaction reviewed by Capital Funding Group is the time spent up-front completing a thorough underwriting to ensure that the HUD financing is accomplished smoothly.

The following information is requested for the initial underwriting:

• 3 years and YTD financial statements.
• 3 years and YTD occupancy and payor mix information.
• Current budget.
• Current rate letters.
• In the case of a refinancing, evidence of debt to be refinanced and prepayment penalty, if applicable.
• In the case of an acquisition, a purchase agreement or letter of intent.
• In the case of a substantial rehabilitation or new construction, an estimated budget and financial projections for the project.
• Evidence of professional liability insurance including amount of coverage, deductible and number of properties covered by policy and the cost of the coverage.
• Resume and experience summary of key officers.
• Land survey, if available.
• A facility information form will also be completed, providing location and physical description of the property.

Additional information may be requested depending on the project and transaction including, but not limited to, professional liability and health surveys.

Expenses

Application Fee - a non-refundable fee of 0.3% of the requested mortgage amount is payable to HUD at the time of the application.

Inspection Fee - The greater of $30.00 per bed or 1.0% of the required repairs on a refinance or acquisition, or 0.5% of the new construction amount is collected at loan closing.

Financing and Placement Fee - up to 3.5% of the mortgage amount.

MIP - Mortgage Insurance Premium is 1% up-front on a refinance or acquisition, or 0.5% on a new construction project (included in the Mortgage Amount), and 0.5% on the declining balance of the mortgage.

Title & Recording Costs - varies by state.

Legal Expenses  - Capital Funding Group's special counsel fee is estimated at $20,000 per closing.

Organizational Expense - This expense item represents approximately $25,000 for third-party report preparation (Appraisal, Market Study, Property Condition Report and Environmental Assessment) and approximately $10,000 is to cover additional closing expenses such as the client's attorney fees.

Reserves & Escrows

Initial Deposit to Reserves - For the submission of the application to HUD, this amount is determined based on a review of the Property Condition Report. For initial underwriting purposes, this amount is estimated at $1,500 per bed.

Annual Deposit to Reserves - An annual deposit to reserves is required as determined by Capital Funding Group and approved by HUD, based on the information provided in the Property Condition Report. This amount is collected monthly as part of the monthly mortgage payment.

Property Taxes and Property Insurance - These items are collected as part of the monthly mortgage payment.

Processing

When the appropriate loan structure is determined, Capital Funding Group will provide an agreement outlining the terms of the loan. Upon receipt of the signed contract, work will immediately begin on the preparation of the HUD loan application. The appropriate third parties will be engaged. The third-party reports that are required for the application include an appraisal, a market study, a property condition report and a PHASE I. Depending on the location of the property, a seismic report may also be required.

Capital Funding Group has specialists who are experts in the preparation of the loan application. A conference call or site visit will be arranged with the Capital Funding staff. This call will provide the opportunity to discuss the application requirements and necessary forms to be completed. Capital Funding Group will work with you to complete the information and advise you regarding the information that requires your input.

Closing

Capital Funding Group will work with your legal counsel to ensure a timely and efficient closing. Closings typically occur within 60 days of receiving a firm commitment from HUD. During the period of document preparation, the interest rate on the loan will be locked in.

Servicing

All loans originated and closed by Capital Funding Group are maintained in-house for servicing for the life of the loan. Your relationship with Capital Funding Group will extend beyond the processing of your loan. As you transition from the application processing phase to the servicing aspect of your loan, you will be teamed with a servicing assistant who will handle all aspects of your loan.