October 12, 2004
HUD ISSUES SECOND LARGEST INSURANCE COMMITMENT IN FHA HISTORY
$401 Million Commitment to Update & Expand Historic South Carolina Hospital
WASHINGTON - The U.S. Department of Housing and Urban Development today issued a commitment to insure a $401 million mortgage loan for Medical University of South Carolina (MUSC), in Charleston. The mortgage, insured under the Federal Housing Administration (FHA) Section 242 Hospital Mortgage Insurance program, is the second largest commitment ever for FHA's mortgage insurance program. It will support the construction of a new four-story diagnostic and treatment center, state-of-the-art cardiology center, and a seven-story patient tower.
"The HUD mortgage insurance will save MUSC approximately $110 million over the life of the loan and enable this new Medical Center to better serve the surrounding community, in addition to creating more than 400 construction jobs," said Assistant Secretary for Housing-Federal Housing Commissioner John C. Weicher.
The 775-bed hospital has served South Carolina continuously since its founding in 1823, except for the period during the Civic War. Originally a private medical college, the hospital became part of the state's higher education system in 1913. Ownership was transferred to the Medical University Hospital Authority in 1999.
FHA helps hospitals all over the nation access affordable financing for capital projects like this one in South Carolina. Clients range from small rural facilities to some of the nation's top urban teaching hospitals. FHA insurance enables hospitals to enhance their creditworthiness because the United States Government backs their debt.
The Section 242 program had a record year in 2004, issuing $1.3 billion in insurance commitments, more than in any year since the program began in 1969. The $970 million in commitments in the month of September alone is more than in any complete year in program history. The program also assisted more hospitals than it has in 20 years.
The Section 242 mortgage insurance program does not cost the taxpayers any money. In fact, in fiscal year 2004 the program generated more than $23 million in fees and paid no claims. An FHA loan sale in March resulted in the sale of the sole HUD-held hospital mortgage note, meaning that for the first time in 25 years FHA holds no hospital notes as a result of insurance claims.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 as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.