What are the requirements for a HUD loan on a nursing home?
To get a HUD loan on a nursing home, the facility must support at least 1.45x debt service coverage on the new loan, with leverage up to 80% of value for for-profit owners and 85% for nonprofits under HUD's Section 232/223(f) program. HUD's Office of Residential Care Facilities also reviews the operator, its licensure, staffing and survey history, CMS star ratings, census and payor mix, professional liability insurance and the lease between owner and operator. A lender with HUD LEAN approval underwrites and submits the loan.
Requirements at a glance
| Requirement | Section 232/223(f) purchase or refinance | Section 232 new construction or substantial rehab |
|---|---|---|
| Max loan-to-value | 80% for-profit, 85% nonprofit | 80% skilled nursing, 75% assisted living |
| Max loan-to-cost | 85% acquisition for-profit (90% nonprofit) | 90% |
| Min debt service coverage | 1.45x | 1.45x |
| Term | Up to 35 years, fixed, fully amortizing | Construction period plus up to 40 years |
| Mortgage insurance premium | 1% at closing, then 0.65% a year | 0.77% at closing and annually |
| Recourse | Non-recourse, standard carve-outs | Non-recourse, standard carve-outs |
What HUD reviews beyond the building
- Operator: experience, licensure, staffing, financial capacity and survey history
- Care quality: CMS star ratings, state surveys, deficiencies and complaints
- Operations: census, occupancy, payor mix (Medicare and Medicaid exposure), revenue and labor-cost trends
- Structure: the owner and operator entities and the operating lease between them
- Insurance: professional liability coverage
- Property: appraisal, environmental report, Capital Needs Assessment and replacement reserves
Faster path: qualifying 232/223(f) refinances at 70% loan-to-value or less, with an operator that has run the facility for at least two years, can use HUD's Express Lane, which targets a firm commitment in about 10 to 15 days. See Does my Section 232 deal qualify for Express Lane?
What to check or ask a lender
- Are you LEAN approved, and how many skilled nursing loans have you closed?
- Which of my operator or survey items will HUD focus on?
- Does my facility qualify for Express Lane?
- If the facility needs time to stabilize or change operators, can you provide a bridge loan first?
Bravo Capital's record
Since September 2025, Bravo Capital has received six Section 232/223(f) skilled nursing commitments in Virginia and West Virginia totaling $143.2 million, and all six have closed, including Blue Ridge Therapy Connection in Stuart, VA ($41.7 million) and Wyndhurst Health and Rehabilitation in Lynchburg, VA ($34.2 million). Across all programs, Bravo has closed 26 of 26 HUD firm commitments.
Program guide: HUD Section 232 loans. Related: Skilled nursing HUD loans in Virginia and West Virginia, Section 232 new construction, Skilled nursing acquisition loans.
Talk to a healthcare underwriter Check Express Lane eligibility
Questions borrowers ask
Can a nursing home get a HUD loan?
Yes. HUD's Section 232/223(f) program finances the purchase or refinance of existing skilled nursing facilities, and Section 232 new construction finances new or substantially rehabilitated ones.
What debt service coverage does HUD require on a nursing home loan?
A minimum 1.45x on Section 232/223(f) acquisition and refinance loans, and on Section 232 construction loans.
How much can I borrow on a skilled nursing facility?
Up to 80% of value for for-profit owners and 85% for nonprofits on a Section 232/223(f) loan, subject to 1.45x coverage and HUD's review. Section 232 construction loans go up to 80% of value and 90% of cost for skilled nursing.
What documents does HUD need for a nursing home loan?
Facility financials, census and occupancy history, payor mix, operator materials, licensure, survey history, existing debt, property tax and insurance information, ownership and operator structure, capital-expenditure and repair history.
About the author
Aaron Krawitz is the founder and CEO of Bravo Capital, a HUD-approved MAP and LEAN lender in New York City. He founded Bravo in 2021 after serving as president of Dwight Capital. Bravo and its affiliate, Bravo Property Trust, have closed more than $2.5 billion in financing, and Bravo closed every HUD firm commitment it received in 2025.
