Sims Mortgage Funding, Inc., our mortgage banking subsidiary, closed a $5,890,000 HUD-insured loan for the Jewish Home for the Aged. The loan was insured under the Section 232 program and was funded through the sale of Government National Mortgage Association (GNMA) mortgage-backed securities. The taxable securities have a 40-year fully amortizing term and a fixed rate of interest at 6.18%.

background

The Jewish Home for the Aged (JHA) is a not-for-profit organization that has been providing healthcare and housing for the elderly in Portland, Maine for over 70 years. Its Cedars campus includes the Cedars Nursing and Rehabilitation Center, a 102-bed skilled nursing facility, and the Atrium, a 61-unit entrance fee independent living community. The nursing home had been financed in 1990 with HUD-collateralized, tax-exempt bonds underwritten by Herbert J. Sims & Co.; the HUD insurance was obtained by Sims Mortgage Funding. JHA wanted to expand the Cedars campus – and complete its continuum of care – by building a 30-unit assisted living project.

Proposed Assisted Living Facility

challenge

Our pre-application for mortgage insurance was first met with skepticism by HUD. Their economic forecast indicated that there would be insufficient demand for new assisted living units. HUD also had some negative experiences with assisted living projects they had approved elsewhere in the state. HUD initially turned down our proposal but offered us an opportunity to appeal their decision. Sims carefully analyzed HUD’s information and worked closely with JHA to obtain current data on the condition of the Portland assisted living market. We also provided HUD with an in-depth look at the complex, interdependent relationship of the Cedars campus and how that would benefit the assisted living proposal.

implementation

Sims and JHA made a formal, joint presentation of our findings to HUD at the local and regional level. Within approximately two weeks, HUD ruled in our favor and issued a preliminary approval of a $5,890,000 mortgage.

result

Sims’ abilities to effectively and positively interact with HUD after it initially turned down the proposal and to articulate a clear, concise response to HUD’s concerns enabled JHA to secure the financing it needed to complete the continuum of care on its Cedars campus.