Sims Mortgage Funding Closes FHA-Insured Loan for Hebrew Hospital Home of Westchester

Hebrew Hospital Home of Westchester - Valhalla, NY

On September 29, 2009, SMF closed a $17,384,389 loan for the Hebrew Hospital Home of Westchester. The financing was structured as a note modification and consolidation of the Home’s two existing FHA insured obligations: an $18,432,000 Section 232 loan issued in 1996 to finance construction of a skilled nursing facility in Valhalla, NY and a $2,698,000 supplemental loan issued in 2005 to finance additional construction costs incurred in connection with the 1996 project. Herbert J. Sims & Co. was the senior manager of the 1996 tax-exempt bond issue that funded the $18,432,000 loan, and Sims Mortgage Funding, Inc. structured and placed the 2005 taxable debt. The blended interest rate on the FHA-insured notes was 6.59%

Sims Mortgage Funding, Inc. acted as financial advisor to the Home by: 1) conducting an analysis of the feasibility of prepaying the 1996 and 2005 debt; 2) making formal proposals to HUD and the 1996 and 2005 debt issuer to modify and consolidate the FHA-insured loans and to transfer the underlying “collateral” for the 1996 and 2005 debt (the FHA-insured notes) to the new loan upon prepayment; and 3) arranging for the new loan funding, a taxable GNMA mortgage-backed security. HUD approved our note modification request in 7 days!

Proceeds from the modified loan were used to prepay the 1996 tax-exempt bonds and 2005 taxable debt, cover all transaction costs and new loan placement fees, and fund a 6.5 month debt service escrow that will be used to reimburse the Home for its debt service. As a result of the note modification, total interest costs were reduced by approximately $4.3 million.