|HUD No. 09-203
October 16, 2009
HUD APPROVES $28.3 MILLION FINANCING DEAL TO REPLACE AGING HOSPITAL IN L�ANSE, MICHIGAN
WASHINGTON - The U.S. Department of Housing and Urban Development today announced a commitment to insure a mortgage loan to Baraga County Memorial Hospital in L'Anse, Michigan. The $28,310,000 loan is made possible through the Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program.
The existing hospital was constructed in 1969 and is nearing the end of its useful life. It is not well-suited for today's volume of outpatient activity and does not allow implementation of new inpatient technology and services. The replacement hospital will be a 71,158 square-foot facility housing 15 acute beds with a retail pharmacy and an attached outpatient center. It will contain areas for imaging, laboratory, dietary, pharmacy, physical therapy, respiratory therapy and support departments.
"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 Baraga County Memorial 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 $43.8 million in interest expense over the life of the loan. Since 2003, HUD has issued commitments to 19 different critical access hospitals all across the United States.
HUD estimates this construction project will support 103 full-time jobs and provide an estimated economic stimulus of $70.5 million to the community. Once completed, it is estimated the project will provide an annual economic benefit of approximately $2.4 million.
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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