DENVER – The U.S. Department of Housing and Urban Development (HUD) today announced a commitment to insure a mortgage loan to Valley Citizen’s Foundation for Health Care, Inc. which is doing business as Rio Grande Hospital in Del Norte, Colorado. It is estimated the refinanced debt will save the hospital more than $168,000 a year in principal and interest and more than $1.6 million over the life of the loan.
The $10.7 million loan is made possible through the Section 223(a)(7) component of the Federal Housing Administration’s (FHA) Section 242 Hospital Mortgage Insurance Program.
“Part of FHA’s core mission is to help healthcare facilities that are struggling with high interest rates and limited credit options,” said Acting FHA Commissioner Carol Galante. “The savings provided through FHA refinancing will help facilities like Rio Grande hold down the cost of healthcare and better serve their community.”
FHA’s Section 223(a)(7) program provides for refinancing of a hospital’s debts without requiring new construction or renovation. The program is designed to help healthcare facilities with existing FHA-insured mortgages reduce the interest rate on their debt. Rio Grande’s two FHA-insured loans were used to construct a replacement facility in 2003 and a rural health clinic in 2007.
“The opportunity for Rio Grande Hospital to refinance debt strengthens its long term ability to continue to provide healthcare services to residents of the Valley. HUD recognizes how vital community and rural hospitals are to providing critical care and I am so pleased that we was able to participate in approving this debt restructuring,” said Rick M. Garcia, HUD’s Rocky Mountain Regional Administrator in Denver.
Since 1968, FHA has insured over 400 mortgage loans totaling over $17 billion to hospitals in 43 states and Puerto Rico. The Section 242 program serves the full spectrum of acute care hospitals, including small rural hospitals, inner-city hospitals, and large academic medical centers.