|HUD No. 09-078
May 29, 2009
HUD APPROVES $29.9 MILLION DEAL TO CONSTRUCT 17-BED REPLACEMENT HOSPITAL IN MOAB, UTAH
WASHINGTON - The U.S. Department of Housing and Urban Development today announced a commitment to insure a mortgage loan to Moab Valley Healthcare, Inc. in Moab, Utah to construct a new 17-bed hospital to replace an existing 52-year-old facility. The $29.9 million loan is made possible through the Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program.
The new construction will replace the current facility, which was designed for inpatient care and can no longer support the hospital's current volume of outpatient activity. By insuring the mortgage loan, FHA is enabling Moab Valley Healthcare to obtain lower cost financing, saving the hospital an estimated $9.6 million in interest expense over the life of the loan.
The new construction will enable the hospital to provide services in modern space and to maximize the efficiency of both inpatient and outpatient care. The hospital is located more than 50 miles from the nearest inpatient healthcare facility, and provides critical services and access to care for its community. Since 2003, HUD has issued commitments to 15 different critical access hospitals all across the United States.
"FHA's hospital mortgage insurance will allow this important facility to provide higher levels of service to the community by replacing and upgrading the current structures," said HUD Secretary Shaun Donovan. "By lowering the cost of credit, FHA will allow Moab Valley Healthcare to use more of its resources to provide quality medical care."
This construction project alone will create approximately 490 full-time jobs and provide an estimated economic stimulus of $80.6 million to the community. Once completed, the project will provide an annual economic benefit of approximately $6.9 million and support 69 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. The eligible applicants can be public, proprietary, or nonprofit hospitals certified by the responsible State agency.
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