|HUD No. 09-232
December 18, 2009
HUD APPROVES $25.9 MILLION FINANCING DEAL TO REPLACE AGING HOSPITAL IN EDGERTON, WISCONSIN
WASHINGTON - The U.S. Department of Housing and Urban Development today announced a commitment to insure a mortgage loan to Edgerton Hospital and Health Services in Edgerton, Wisconsin. The $25.9 million loan is made possible through the Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program.
The existing hospital was constructed in 1923 and is in deteriorating condition. Although various buildings were added over the years, the hospital has inadequate space to meet current needs and much of its equipment needs to be replaced. The replacement hospital will be an 18-bed facility that will provide space for new and expanded outpatient services and the development of a common nursing station for centralized management of acute, emergency, and observation services. Areas of expansion include emergency/urgent care, imaging, laboratory, and rehabilitation departments. New equipment will include purchases for radiology, operating room, laboratory, and telemetry.
"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 Edgerton Hospital and Health Services 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 $37.5 million in interest expense over the life of the loan. Since 2003, HUD has issued 22 commitments to critical access hospitals all across the United States.
Unlike the aging hospital, the location of the new facility will be highly visible and easily accessible, allowing ambulances to enter the site directly from the state highway. Construction is scheduled to be completed in January 2011.
HUD estimates this construction project will support 453 full-time jobs and provide an estimated economic stimulus of $70 million to the community. Once completed, it is estimated the project will support 149 full-time jobs and provide an annual economic benefit of approximately $21.4 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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