WASHINGTON, DC – August 10, 2009 – (RealEstateRama) — The U.S. Department of Housing and Urban Development today announced a commitment to insure a mortgage loan to Fall River Health Services (FRHS) in Hot Springs, South Dakota, to construct a 10-bed addition to the 15-bed replacement hospital currently under construction. The $2.4 million loan to FRHS, a critical access hospital, is made possible through the Federal Housing Administration’s Section 242 Hospital Mortgage Insurance Program.
In September 2008, HUD issued a $16.7 million mortgage insurance commitment to Fall River Health Services to build a replacement hospital and rural health clinic. The commitment announced today provides for construction of additional beds to accommodate anticipated volume increases in the future. By insuring the mortgage loan, FHA is enabling Fall River Health Services to obtain lower cost financing, saving the hospital almost $800,000 in interest expense over the life of the loan.
“By lowering the cost of credit, FHA is helping to build state-of-the-art health care facilities all across the country,” said Federal Housing Commissioner David Stevens. “This support will allow Fall River Health Services to use more of its resources to provide quality medical care.”
The new construction will enable the hospital to provide services in modern space and to maximize the efficiency of patient care. The facility is the only hospital within its primary service area. It is located 45 miles from the nearest inpatient healthcare facility and 60 miles from the next closest medical facility. Since 2003, HUD has issued commitments to 15 different critical access hospitals all across the United States.
The Fall River Health Services construction project will create approximately 240 full-time jobs and provide an estimated economic stimulus of $49.3 million to the community. Once completed, the project will provide an annual economic benefit of approximately $6.9 million and support 32 additional jobs throughout the community.
FHA’s Section 242 Mortgage Insurance Program for Hospitals provides HUD-insured mortgages made by private lending institutions to finance construction or renovation of acute care hospitals including major equipment needed to operate the facility. Eligible applicants include public, proprietary, or nonprofit hospitals certified by the responsible State agency.
HUD is the nation’s housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.