SIMS MORTGAGE FUNDING (SMF) HELPS PENNSYLVANIA NURSING HOME CUT COST OF CAPITAL ALMOST IN HALF

FAIRFIELD, CT– Sims Mortgage Funding (SMF), a subsidiary of HJ Sims, a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the loan closing in the amount of $3,980,000 for Naamans Creek Country Manor (Naamans), a 90-bed skilled nursing facility located in Boothwyn Township in the greater Philadelphia, PA – Wilmington, DE metropolitan area.

Naamans is owned by an affiliate of The Guardian Foundation (Guardian), a not-for-profit organization that owns and/or operates nursing homes in PA and FL through related companies. Namaans had high-coupon, 30-year tax-exempt bonds that could be prepaid with a slight penalty, however interest rates for HUD-insured loans were attractive, and the fixed-rate structure would enable Guardian to lock-in savings over the long term, despite a penalty on the bonds.

SMF secured the loan under the Section 232/223(f) program to refinance the bonds and fund capital reserve and repair escrows. Because the LTV ratio was approximately 50%, the HUD loan committee approved the transaction without any risk mitigation after there was a short-term drop-off in net operating income between the time the loan application was filed and it was placed in review. At Guardian’s request, the loan featured a 30-year maturity and had a debt service coverage ratio of approximately 3.40.

SMF obtained a key exemption for Namaans’ management agent from HUD’s requirement for the agent to be a party to a HUD Regulatory Agreement. The exemption enabled the refinancing to move forward under the structure in place before the refinancing. SMF seamlessly coordinated the closing of the HUD-insured loan with the notice of redemption of the tax-exempt bonds, resulting in minimal payment of double interest.

Because of the HUD-insured refinancing loan, Naamans lowered its annual debt service by approximately $130,000. With over $360,000 in a reserve fund for replacements, Guardian can address future capital needs that will maintain Namaans’ competitiveness.

“We are pleased with the outcome of the HUD financing arranged by Sims Mortgage Funding. As a result of their efforts, our cost of capital was reduced almost in half, and we expect to save approximately $130,000 annually in debt service,” said Gregory Grove, President, The Guardian Foundation.

For more, please contact Kerrie J. Tomasiewicz at ktomasiewicz@simsmortgage.com.

ABOUT SIMS MORTGAGE FUNDING: Established in 1984, Sims Mortgage Funding, Inc. (SMF), a subsidiary of HJ Sims (a privately held investment bank and wealth management firm founded in 1935), originates, underwrites, and funds loans for healthcare and housing projects insured through the Federal Housing Administration (FHA). SMF is an approved lender under the following programs: LEAN for skilled nursing; assisted living and specialized use facilities; Multifamily Accelerated Processing for market-rate and subsidized rental housing; and Office of Hospital Facilities for hospital transactions. SMF arranges loan funding through the sale of GNMA Mortgage Backed Securities or tax-exempt bonds underwritten by HJ Sims. HUD Plus, a program offered exclusively through HJ Sims, provides significant advantages to healthcare borrowers by increasing their debt capacity. SMF is based in Montvale, NJ. Visit: http://www.simsmortgage.com. Follow SMF on LinkedIn.