WASHINGTON, DC – December 7, 2010 – (RealEstateRama) — The U.S. Department of Housing and Urban Development (HUD) today announced a commitment to insure a mortgage loan to the Coquille Valley Hospital District in Coquille, Oregon. The $22 million loan is made possible through the Federal Housing Administration’s (FHA) Section 242 Hospital Mortgage Insurance Program.
The existing hospital was constructed in 1969 and was designed primarily for inpatient care. Though there have been various building additions and improvements in subsequent years, it is no longer suitable for the hospital’s growing outpatient volume. The FHA-insured mortgage loan will be used to construct a new three-story, 18-bed, critical access hospital adjacent to the existing facility. The loan will also be used to refinance a 2005 loan related to expansion of the Coquille Medical Clinic.
“FHA financing is helping to expand access to medical care in this part of Oregon,” said FHA Commissioner David Stevens. “By helping to make these projects possible, FHA also contributes to the financial well-being of communities by creating jobs to stimulate local economies.”
HUD estimates the Coquille Valley Hospital construction project will support 383 full-time jobs and provide an estimated economic stimulus of more than $55.2 million to the community. Once completed, it is estimated the project will support 40 full-time jobs and provide an annual economic benefit of $6.2 million. HUD’s estimates are based on results from an economic model used by public and private institutions to examine a variety of economic development issues.
By insuring the mortgage loan, FHA is enabling the hospital to obtain lower cost financing that will save an estimated $1.5 million in interest expense over the life of the loan. Since 1968, FHA has insured 394 mortgages to hospitals throughout the nation.
FHA’s Section 242 Mortgage Insurance Program for Hospitals provides HUD-insured mortgages made by private lending institutions to finance construction or renovation of acute care hospitals including major equipment needed to operate the facility. Eligible applicants can be public, proprietary, or nonprofit hospitals certified by the responsible State agency.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.