KC Peterson of PM Advisors successfully closed a HUD refinance of a 30-unit/36-bed assisted living community in Sutherlin, Oregon. Built in 1996 and in good condition, the community was owned and operated by an established group in the state. They had originally financed the community with bonds that contained an affordability period for 20% of the resident population through 2032. Those units could be occupied by Medicaid residents as well as private pay residents who had spent down their wealth. In addition, ownership had two additional layers of IOI promissory notes on the property.
However, the bonds came with a high interest rate of 7.375%, leaving the owners to look for a refinancing solution. So, Mr. Peterson secured a 35-year, fully amortizing loan with an interest rate around 3%. In addition to refunding the original municipal bonds and promissory notes, the refinance allowed the borrowers to install a new generator and re-floor the community.
