WASHINGTON, DC – October 5, 2010 – (RealEstateRama) — The U.S. Department of Housing and Urban Development (HUD) today announced a commitment to insure a mortgage loan to the John & Mary E. Kirby Hospital in Monticello, Illinois. The $31.2 million loan is made possible through the Federal Housing Administration’s (FHA) Section 242 Hospital Mortgage Insurance Program.
Over the past 30 years, the 16-bed hospital has undergone several renovations including additions for new medical technology and expansion of essential outpatient services. However, its major limitation is lack of capacity to grow to meet the community’s changing healthcare needs. The FHA-insured mortgage loan will be used to construct a replacement facility on a much larger nearby site and to refinance existing debt.
The new hospital, to be named Kirby Medical Center, will be a one-story brick building with all departments (with the exception of its rural health clinic located in Atwood, Illinois) of the hospital housed under one roof. It will have expanded surgical space and the emergency room will be expanded by three bays, including one dedicated trauma room. In addition, the number of patient exam and procedure rooms in the Kirby Medical Group (KMG), Monticello practice, will expand from 12 to 19. The KMG Atwood Clinic (Kirby’s Rural Health Clinic) will remain in Atwood, Illinois.
“FHA is helping to build state-of-the-art health care facilities like this all across the country,” said FHA Commissioner David Stevens. “By helping to make these projects possible, FHA also contributes to the financial well-being of communities by creating jobs to stimulate local economies.”
HUD estimates the Kirby Hospital construction project will make a tremendous economic impact on the community. Currently the hospital employs 200 people and generates over $8 million in wages and salaries combined. A combination of construction jobs, new employment and secondary impact spending in local businesses is expected to be a stimulus for local economy.
By insuring the mortgage loan, FHA is enabling the hospital to obtain lower cost financing that will save an estimated $4.6 million in interest expense over the life of the loan. Since 1968, FHA has insured 392 mortgages to hospitals throughout the nation, 51 within the past five years.
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 can be public, proprietary, or nonprofit hospitals certified by the responsible State agency.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.