Senior Housing Financing

The biggest difference among senior housing properties is the level of care. Independent living provides the lowest level of care, with no health care and income generated mostly from unit rental. Assisted living adds services such as meals, housekeeping and help with daily activities and may be state-regulated. Nursing homes provide 24-hour, non-acute medical care, are highly regulated, and commonly rely on government reimbursement. Lenders also weigh the quality, reputation and experience of the facility’s management, staffing, and the condition and location of the facility.

Coverage requirements rise with the level of care: our program requires a minimum DSCR of 1.30x for independent living, 1.40x where assisted living and/or Alzheimer’s care exceeds 50%, and 1.45x for any skilled nursing component, with a maximum LTV of 75% of appraised value.

Government-insured financing is also available: FHA’s Section 232 program provides mortgage insurance for loans on residential care facilities such as nursing homes, assisted living and board and care, and may be used for purchase, refinance, new construction or substantial rehabilitation. When a facility needs short-term funding first, ask about our commercial real estate bridge loans. For conventional apartment buildings, see multifamily property loans, or browse all commercial real estate loans.