Massive HUD Loan

Medical breakthrough? We might say that given the new Dallas office of Walker & Dunlop just closed the largest HUD 242 loan  ever on behalf of a for-profit  borrower to build a hospital. It marks HUD's first non-replacement hospital construction loan in five years.
 
The loan finances almost $167M for a hospital in Lakeway, northwest of Austin, Walker & Dunlop VP Jeffrey Jones tells us. The deal closed Friday after months of effort, much of it resulting from health care reform issues. The project had a two-year history before his firm got involved, Jeff says. After several financing efforts failed, the hospital began working with Walker & Dunlop, and would've closed late fall had the health care reform legislation not kinked efforts. The hospital was going to be physician-owned, a problem under the new legislation. “We spent four months  renegotiating and restructuring the organization to be eligible for financing,” Jeff says.
 
 
The loan was granted to a for-profit general acute care hospital (an eight-story, 270k SF medical facility with a multi-story, 52k SF parking structure) in Travis County. It was financed with taxable Ginnie Mae securities under the FHA 242 mortgage insurance program. Jeff says the 242 program has historically been for non-profits, but HUD's been pursuing a more diverse and larger market outside of the northeast (where most deals have been done.) Jeff has three other for-profit hospital deals in the works.

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Related Topics: Ginnie Mae , Travis County
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