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| $85,000,000
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| FHA 242 Insured Ginnie Mae Loan |
| Replacement Community Hospital |
InnoVative Capital's Role:
FHA Mortgage Banker and
Financial Advisor |
Meadows Regional Medical Center
Vidalia, GA |
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FHA 242 Mortgage Lending
We are proud of our HUD/FHA 242 underwriting approval rate. |
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InnoVative Capital FHA 242 Development Services
(FHA 242 Pre-Assessment and FHA 242 Pre-Application)
Upfront, InnoVative Capital works to assess the financial wherewithal of its client and determine its debt capacity, optimal capital budget and project size, required capital contribution, necessary liquidity reserves and any time-related or political constraints. By modeling the initial financing parameters within the limits of each borrower’s balance sheet and income statement, InnoVative Capital can determine each client's preliminary debt capacity and maximum project size. When reality falls short of expectations, InnoVative Capital works to develop supplemental revenue sources and security enhancement. This can take the form of municipal tax support, government grants, municipal funding, corporate partnerships and operational modifications. By generating in-house analytics with credit narratives, and working with external consultants, InnoVative Capital produces internal and external-use reports for FHA underwriting reviews, hospital management and board meetings.
+ InnoVative Capital Development Highlights
| Successful voter initiative, which pledged annual tax levies of $1.8 million for the thirty year life of the loan. |
| Lobbied and received approval of County Commissioners for a dedicated annual mill levy of $3.6 million to provide supplemental operating revenue and bolster debt capacity. |
| Assisted in conversion of community hospital to critical access hospital status. |
| Determined maximum debt capacity and capital contribution requirements upfront, which served as the basis for the project development. |
InnoVative Capital FHA 242 Structuring Services
(FHA 242 Application and HUD Underwriting)
Upon receipt of HUD’s invitation to submit an FHA 242 mortgage insurance application, InnoVative Capital serves as the FHA team leader, directing the FHA underwriting process and project development. By submitting the FHA 242 Application along with InnoVative Capital’s internal analytics and overseeing the feasibility and market review, we serve as our client’s compass with a single goal of securing an FHA 242 mortgage insurance commitment with preferred terms and conditions. Throughout this process, InnoVative Capital directs financing meetings, calls and correspondence, while serving both the project and legal teams.
+ InnoVative Capital Structuring Highlights
| Negotiated the inclusion of off-campus properties to bolster HUD security package and eliminate hospital cash contribution. |
| Bifurcated hospital campus into FHA 242 mortgaged and non-mortgaged properties. |
| Developed hybrid financial ratio analysis for HUD underwriting review to incorporate municipal revenue support. |
| Established upfront liquidity and equity requirements with HUD for start-up hospital. |
| Aided internal management in the production of physician recruitment and retention reports. |
| Assisted in the development of economic impact studies of hospital impact on community commerce. |
| Benchmarked requisite levels of tax support for hospital financing by analyzing consolidated annual financial reports of municipality. |
InnoVative Capital FHA 242 Financing Services
(Issuance of HUD Commitment, Financing and Closing the Loan)
Due to expiring guaranteed maximum price contracts, project inflation, certificate of need deadlines, uncertain capital markets and client expectations, time is of the essence. InnoVative Capital’s 24/7 approach advances the FHA underwriting process and eventual issuance of HUD’s commitment. InnoVative Capital is proud of its record of timely commitments and loan closings, even when confronted with the most challenging circumstances. As FHA 242 mortgage banker, InnoVative Capital works with hospitals in consultation with HUD to optimize security pledges, financial and operational covenants and any required cash contributions. Upon issuance and acceptance of the HUD commitment, InnoVative Capital may employ a variety of financing structures to fund a hospital loan. In a sharply spiked yield curve, FHA 242 mortgage insured Ginnie Mae collateralized taxable loans eliminate negative arbitrage by disbursing funds pursuant to each construction draw requisition. For refinancings, Ginnie Mae loans offer a taxable funding source for the defeasance of higher interest rate muncipal bonds. FHA 242 mortgage insurance may be used to securitize municipal bond issues for either public sale or private placement. InnoVative Capital’s client representation does not end with the loan closing, as we remain in a servicing capacity through cost-certification and loan repayment.
+ InnoVative Capital Financing Highlights
| Employing a bifurcated FHA 242 loan structure for a $37 million construction/refinancing, InnoVative Capital reduced Knox Community Hospital’s blended loan rate by 75 basis points per annum, saving them millions in total interest expense. |
| Accessing Georgia’s year-end 2010 allocation of Recovery Zone Economic Development Bonds, which provided Effingham Hospital with an annual 45% federal interest rebate, InnoVative Capital delivered a net FHA 242 borrowing rate of 3.63% for its CAH modernization loan. |
| An $85 million Ginnie Mae collateralized FHA loan funded Meadows Regional Medical Center’s new hospital project, without the issuance of tax-exempt bonds and avoided negative arbitrage of $5 million and bond-related closing requirements of $10 million. |
| When a flat yield curve eliminated negative arbitrage, FHA 242 mortgage insured, AAA-rated municipal bonds funded Matagorda Regional Medical Center’s replacement facility at a bond rate of 4.76%, saving over 3 percent annually versus non-rated hospital bonds. |
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Develop, Structure
& Finance |
| We manage the entire process |
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| Client Testimonial: |
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| “As our banker and advisor, InnoVative Capital’s judgment was on target before, and throughout, the FHA process. InnoVative Capital’s financial metrics right-sized our project, so we never exceeded our debt capacity limits and, afterward, they financed our FHA 242 insured mortgage loan without a hitch. By educating our Board and the Hospital Authority, InnoVative Capital built a trust that was essential in expediting key decisions.” |
Alan Kent | President and CEO
Meadows Regional Medical Center |
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| OTHERS PROMISE. WE DELIVER. |
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$40,500,000 |
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FHA 223 a-7 Insured
Ginnie Mae Loan |
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FHA 242 Debt Refinancing |
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Morehead Memorial Hospital |
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Eden, NC |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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Joint Management &
Lease Agreement |
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Community Hospital Affiliation |
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Emanuel Medical Center |
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Swainsboro, GA |
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InnoVative Capital's Role: |
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Financial Advisor |
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[ case study ] |
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$85,000,000 |
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FHA 242 Insured Ginnie Mae Loan |
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Replacement Community Hospital |
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Meadows Regional Medical Center |
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Vidalia, GA |
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InnoVative Capital's Role: |
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FHA Mortgage Banker and Financial Advisor |
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[ case study ] |
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$40,000,000 |
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FHA 242 Insured
Ginnie Mae Loan |
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Replacement Critical Access Hospital |
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The Memorial Hospital |
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Craig, CO |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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$46,000,000 |
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FHA 242 Mortgage Insured
Tax-Exempt Bonds |
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Replacement
District Hospital |
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Matagorda Regional Medical Center |
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Bay City, TX |
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InnoVative Capital's Role: |
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FHA Mortgage Banker and
Financial Advisor |
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[ case study ] |
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$18,500,000 |
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FHA 242 Insured
Ginnie Mae Loan |
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Replacement Critical Access Hospital |
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Shoshone Medical Center |
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Kellogg, ID |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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$6,500,000 |
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FHA 241 Insured
Ginnie Mae Loan |
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Skilled Nursing Facility
Renovation |
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Shorefront Geriatric Center |
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Brooklyn, NY |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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$29,000,000 |
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FHA 242 Insured
Ginnie Mae Loan |
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Replacement Critical Access Hospital |
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North Valley Hospital |
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Whitefish, MT |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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$31,000,000 |
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FHA 242 Mortgage Insured
Ginnie Mae RZED Bonds |
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Critical Access Hospital Modernization Project |
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Effingham County Hospital Authority |
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Springfield, GA |
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InnoVative Capital's Role: |
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FHA Mortgage Banker and
Financial Advisor |
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[ case study ] |
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$24,000,000 |
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Hospital Revenue Bonds |
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Community Hospital
Renovation and Expansion |
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Ohio Valley General Hospital |
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McKees Rocks, PA |
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InnoVative Capital's Role: |
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Financial Advisor |
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[ case study ] |
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$3,500,000 |
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FHA 232 Mortgage Insured
Tax-Exempt Bonds & Sub Debt |
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New Assisted Living Facility |
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Somerset at University Place |
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Winston-Salem, NC |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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$50,000,000 |
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Hospital Revenue Bonds |
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Tertiary Care Facility
Renovation and Expansion |
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Memorial Health University Medical Center |
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Savannah, GA |
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InnoVative Capital's Role: |
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Financial Advisor |
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[ case study ] |
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$6,860,000 |
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FHA 232 Insured
Ginnie Mae Loan |
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Skilled Nursing Home
Renovation and Refinancing |
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Citrus Health and
Rehabilitation Center |
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Inverness, FL |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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$19,200,000 |
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Hospital Revenue Bonds |
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Community Hospital
Refinancing and Expansion |
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Daviess County Hospital |
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Washington, IN |
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InnoVative Capital's Role: |
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Financial Advisor |
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[ case study ] |
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$33,000,000 |
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FHA 242 Insured
Ginnie Mae Loan |
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Start-Up For-Profit Hospital |
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Summit Hospital |
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Phenix City, AL |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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$37,000,000 |
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FHA 242 Insured
Ginnie Mae Loan |
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Community Hospital
Debt Refinancing & Expansion |
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Knox Community Hospital |
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Mt. Vernon, OH |
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InnoVative Capital's Role: |
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FHA Mortgage Banker and
Financial Advisor |
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[ case study ] |
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$20,000,000 |
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USDA Direct Loan |
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Community Hospital Renovation |
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DeSoto Memorial Hospital |
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Arcadia, FL |
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InnoVative Capital's Role: |
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Financial Consultant |
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[ case study ] |
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$59,000,000 |
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Doctors’ Hospital
Non-Rated Hospital Revenue Bonds |
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Start-Up Non-Profit Hospital |
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Doctors’ Hospital |
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Bridgeport, TX |
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InnoVative Capital's Role: |
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Financial Advisor |
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[ case study ] |
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$7,675,000 |
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FHA 232 Insured
Ginnie Mae Loan |
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Start-Up Skilled Nursing Facility |
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Stone Oak Care Center |
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San Antonio, TX |
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InnoVative Capital's Role: |
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FHA Mortgage Banker |
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[ case study ] |
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The Tax Support of Independent Community Hospitals
by Alan P. Richman
Healthcare Financial
Management Magazine |
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Increasingly, community hospitals are under pressure to survive. Independence and prosperity are not mutually exclusive for many community hospitals, as long as they receive a little revenue support for new facilities and additional physicians. Dedicated limited taxes can provide the lifeline hospitals need to preserve community healthcare and enhance the local economy.
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