Under Fannie Mae's Seniors Housing Product, Hendricks & Partners is able to provide flexible and favorable loan terms for properties that provide independent living, assisted living, or assisted living with Alzheimer’s care, in any combination. Experienced senior housing operators may take advantage of fixed or variable interest rates to finance single assets or multiple properties.

Advantage/Highlights

• Fixed- or variable-rate, balloon or fully amortizing financing
• Single asset or multiple assets, fee-managed or leased properties
• Fast execution
• Tax-exempt financing and bond credit enhancements

Eligibility

• Independent living (IL), assisted living (AL), and assisted living with Alzheimer’s (AL/ALZH), in any combination
• Properties must be built specifically to meet the housing needs of seniors (Must be fully equipped with sprinkler systems)
• Owners and operators must have a minimum of five years of experience in the senior housing industry and a minimum of five stabilized properties
• IL properties must be 90% occupied for 12 months prior to funding; AL and AL/ALZH properties must be 90% occupied for 15 months prior to funding
• Minimum underwritten vacancy and collection loss:
  –– 5% for IL properties
  –– for AL or AL/ALZH properties with more than 60 units
  –– 10% for AL or AL/ALZH properties with 60 units or fewer

Loan structure

• Maximum loan-to-value (LTV): 75% (80% tax-exempt bonds)
  –– 1.30x if the property if 100% IL
  –– 1.40x if the property is 50% or more AL or AL/ALZH
  –– If the percentage of IL units is greater than 50%, then the DSCR is calculated on a weighted average basis based on the mix of unit types
• Loan terms: 5 to 30 years
• 30 to 90 day rate-lock commitments available; Early Rate Lock feature also available, allowing the borrower to lock a rate 45 to 365 days in advance of closing
• 30-year amortization
• Non-recourse except for standard carve-out provisions
• Cash and MBS executions are available
• Assumable, subject to review and approval of the new borrower’s financial capacity and experience with senior housing
• Prepayment provisions:
  –– Yield maintenance
  –– Defeasance
  –– Graduate payment premium (example: 5-4-3-2-1 on a 5-year term)

Requirements/Fees

• Appraisal, environmental assessment, and physical needs assessment required
• Fully-funded replacement reserve, tax, and insurance escrows required
• Consultant’s Report on Management and Operations is required for all properties and a Regulatory Compliance Report may be required for AL and AL/ALZH properties
• Quarterly performance monitoring is required
• Changes in management must be approved

Program terms are subject to change
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** Minimum DSCR is increased by .05 for any transaction having a Mortgage
Loan term of less than 10 years