Dealmaker: Sims Mortgage Funding Closes $45M Hospital Loan

Sims Mortgage Funding, Inc., Montvale, N.J. closed a $45 million HUD-insured hospital loan in Baton Rouge, La.

Baton Rouge General Medical Center is a 591-bed not-for-profit community hospital. It wanted to build a neighborhood hospital seven miles from its main campus in a fast-growing section of the Baton Rouge metropolitan area. It also wanted additional medical office space adjacent to its main campus. But because its existing HUD-insured loan had a favorable interest rate BRGMC did not want to refinance it for the new project.

Sims Mortgage Funding originated a second HUD-insured loan for $45.4 million under the Section 242/241 Supplemental Loan program to build the neighborhood hospital and purchase a medical office building. By including an appraisal of the hospital with the mortgage insurance application, Sims demonstrated the combined primary HUD-insured and proposed supplemental loan would be less than 90 percent of the hospital’s value. As a result, the supplemental loan covered 100 percent of project costs.

In addition, by aligning prepaid project development costs into the loan application, Sims Mortgage Funding helped BRGMC maximize its reimbursement at closing. The Section 242/241 Supplemental Loan enhanced BRGMC’s liquidity and complemented their existing low interest rate HUD loan.