Dealmaker: HHC Finance Closes $81M HUD Loan in New York

Housing & Healthcare Finance LLC, Chevy Chase, Md., closed HUD’s largest refinance of a single-asset skilled nursing facility loan: $80.7 million for The Riverside Premier Rehabilitation & Healing Center on Manhattan’s Upper West Side.

The Section 232/223(f) HUD loan refinanced existing conventional bank debt at the 520-bed facility. HHC Finance Director Erik Lindenauer said a member of the CareRite Centers network purchased the facility three years ago and significantly renovated it. “The asset is in a great neighborhood on Riverside Drive; a lot of the rooms have river views,” he said.

Lindenauer said because of the large loan size HHC Finance had to seek approval from multiple levels at HUD including the Office of Risk Management and the Deputy Secretary. “I’ve never gone through a process like this before in terms of levels of approval,” he said.

The 30-year fixed-rate non-recourse loan has flexible prepayment conditions, Lindenauer said. “There is no lockout on it; they could immediate prepay.” The borrower received a rate in the mid-three percent range.

HHC Finance also closed two other transactions in December, bringing its loan amount total for the month to nearly $100 million. It arranged an $8.6 million HUD loan for a 236-bed Tampa, Fla., skilled nursing facility and an $8 million HUD loan for a 118-unit Rochester, N.Y. assisted living community. “Originally a skilled nursing facility that failed, the new owner is converting the facility to low- to middle-income assisted living,” Lindenauer said.