WASHINGTON, DC – October 15, 2009 – (RealEstateRama) — The U.S. Department of Housing and Urban Development today announced a commitment to insure a mortgage loan to Mendota Community Hospital in Mendota, Illinois. The $34,220,000 loan is made possible through the Federal Housing Administration’s Section 242 Hospital Mortgage Insurance Program.
The existing 25-bed critical access hospital was constructed in 1951 with various building additions added in subsequent years. It has mechanical, electrical, and life-safety systems that are obsolete. It was built primarily to treat inpatients and is no longer suitable for the hospital’s growing outpatient volume. The construction project will replace the existing hospital and relocate a primary care clinic to the new facility.
“FHA is helping to build state-of-the-art health care facilities all across the country,” said FHA Commissioner David Stevens. “By lowering the cost of credit, FHA will allow Mendota Community Hospital to use more of its resources to provide quality medical care.”
By insuring the mortgage loan, FHA is enabling the hospital to obtain lower cost financing, saving an estimated $54.1 million in interest expense over the life of the loan. Since 2003, HUD has issued commitments to 18 different critical access hospitals all across the United States.
The new 79,112 square foot facility will enable the hospital to provide services in modern space and to maximize the efficiency of patient care. The nearest competing hospital is located 24 miles away.
HUD estimates this construction project will support 426 full-time jobs and provide an estimated economic stimulus of $92.2 million to the community. Once completed, it is estimated the project will provide an annual economic benefit of approximately $7.4 million and support 25 jobs.
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. The eligible applicants can be public, proprietary, or nonprofit hospitals certified by the responsible State agency.
HUD is the nation’s housing agency committed to increasing homeownership, particularly among minorities; 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.