Established in 1968, HUD is authorized to provide FHA Section 242 Hospital Mortgage Insurance to urgently-needed hospitals to facilitate affordable loans for nonprofit, government-owned, and for-profit borrowers. HUD views the FHA 242 Program as the government's ultimate tool in facilitating the cost-effective modernization of America's hospitals. To date, over 350 FHA 242 insurance commitments have been issued in 42 states exceeding $13 billion in financing. Beneficiaries have included hospitals of all sizes and geographic locations from rural critical access hospitals to some of the largest urban tertiary care facilities in the country. Currently, the program has over 80 loans outstanding, totaling more than $6 billion. The program may be used for start-up or existing hospitals to finance construction, modernization, equipment, refinancing (limited to 80% of the insured loan amount), remodeling, expansion and acquisition.

Our Commitment to the FHA Section 242 Program

As a firm, InnoVative Capital has been at the forefront of programmatic changes involving the substance and application of the FHA 242 program. Whether by underwriting the first FHA Section 242 transaction secured by a long-term lease rather than a mortgage, obtaining HUD financing for a proprietary start-up hospital, structuring the largest FHA insured loan for a CAH, or by serving as faculty at hospital industry seminars, the results of our efforts support not only current and future clients, but the future of the entire hospital sector.

Underwriting, Mortgage Banking and Lending

Commencing with our CFO HELPER®, InnoVative Capital’s proprietary system of underwriting FHA 242 Applications generates our own analytical reports, credit narratives, market reviews and project adequacy sufficiency studies. This accelerates the HUD process by immediately identifying transactional strengths and weaknesses, with an action plan for a successful deal. We direct all aspects of the FHA loan underwriting, in coordination with the project development team, to help ensure a successful financing.