|HUD No. 11-037
March 25, 2011
HUD APPROVES $66 MILLION DEAL FOR CHICAGO MEDICAL CENTER
Mercy Hospital and Medical Center to save millions while producing hundreds of jobs
WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) today announced a commitment to insure a mortgage loan to Mercy Hospital and Medical Center in Chicago, Illinois. The $66 million loan is made possible through the Federal Housing Administration's (FHA) Section 242 Hospital Mortgage Insurance Program.
The FHA-insured mortgage loan includes $24 million in construction costs to renovate a birthing center, improve a 10-bed Cardiac Care Unit, provide for hospital-wide installation of sprinklers and a fire alarm system, and update the facility's air handing system. The loan will also be used to refinance 2005 bridge loans.
"FHA-insured financing is helping hospitals improve their service and manage their debt," said HUD Deputy Secretary Ron Sims. "By helping to make these projects possible, FHA also contributes to the financial well-being of communities by creating jobs to stimulate local economies."
HUD estimates that the Mercy Hospital and Medical Center construction project will support 277 full-time jobs and provide an estimated economic stimulus of $85 million to the community. HUD's estimates are based on results from an economic model used by public and private institutions to examine a variety of economic development issues.
By insuring the mortgage loan, FHA is enabling the hospital to obtain a low-cost financing that will save an estimated $22.9 million in interest expense over the life of the loan. Since 1968, FHA has insured 396 mortgage loans totaling $17 billion to hospitals in 43 states and Puerto Rico. The Section 242 program serves the full spectrum of acute care hospitals, including small rural hospitals, inner-city hospitals, and large academic medical centers.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.