Dealmaker: Sims Mortgage Funding Closes $20M in FHA Loans

Sims Mortgage Funding, Montvale, N.J., closed $19.8 million in FHA LEAN Loans for two Rhode Island skilled nursing facilities.  

Sims Executive Vice President Kerrie Tomasiewicz served as LEAN underwriter for both transactions. She said both loans were insured under FHAs’ Section 232/223(f) program and underwritten at 100 percent of the cost to refinance. 

A $14.6 million loan refinanced Orchard View Manor, a 166-bed facility in East Providence, R.I., and a $5.8 million loan refinanced Heatherwood Nursing and Rehabilitation Center, a 114-bed Newport, R.I. facility.  

“Proceeds from the two loans also paid swap termination fees and fund reserves and capital expenditures,” Tomasiewicz said. The 35-year loans’ debt service coverage ratios equaled 3.16 and 2.92, respectively.  

Tomasiewicz said the regional healthcare company turned to Sims to refinance well in advance of existing debt maturity “because they wanted to eliminate refinancing risk and take advantage of current low, long-term and fixed interest rates for FHA-insured loans.” 

The National Investment Center for Seniors Housing and Care, Annapolis, Md., said senior housing occupancy approaches 90 percent nationwide. “The data suggest a slow, steady climb in asking rents amidst a plateauing senior housing and care market across many regions of the country,” NICSHC CEO Robert Kramer said.  

NICSHC said senior housing monthly rental rates average more than $3,500.

Tomasiewicz noted that because the client already had two other FHA-insured projects in Rhode Island that Sims financed in 2014, they were able to include the Orchard View and Heatherwood loans in the same master lease structure established two years ago.  

Heatherwood and Orchard View represent the seventh and eighth FHA-insured financing Sims completed for this client since 2013, Tomasiewicz said.