Pocketing $756M for Construction, Hospital Nabs Largest Ever FHA Loan
- Apr 14, 2009
Capital Health System Inc. has just broken a record with its obtainment of a $756 million construction loan from the Federal Housing Administration for the development of its new hospital on a 165-acre site in Hopewell Township, N.J. The financing, arranged through FHA’s Section 242 Hospital Mortgage Insurance Program, is being funded by TIAA-CREF and marks FHA’s biggest loan yet.Ground broke in October 2008 on the new state-of-the-art hospital (pictured), which will consist of a 540,000-square-foot six-story hospital structure connected via an atrium to a six-story medical office building with 320,000 square feet of space. TIAA-CREF will buy high-quality, low-risk securities to fund the loan to Capital Health, which will also use some of the proceeds for the $45 million expansion of its hospital in nearby Trenton. Prudential Huntoon Paige, the FHA-lending business of Prudential Mortgage Capital Company, arranged the loan on behalf of Capital Health. “A key part of the financing project started last year when Prudential Huntoon Paige was working with FHA to approve the loan,” David Durning, senior managing director with Prudential Mortgage Capital, told CPN. “We’re in the midst of a credit crisis; in general, there’s less credit availability so government programs are often the best avenue of financing for hospitals than in environments where credit financing is flowing more freely.” Work on Capital Health’s new hospital is scheduled to reach completion in 2011.