Case study: Michigan hospital gets $28M to build a new facility

As financing goes, this is small potatoes, but it's good to be reminded that the arteries of healthcare finance haven't completely hardened. This week, our reminder comes from a $28 million loan to Baraga County Memorial Hospital, a small provider in L'Anse, Mich., which plans to use the money to build a new facility.

Baraga County Memorial is getting the loan as part of a HUD program, the FHA's Section 242 Hospital Mortgage Insurance Program, which, along with the Build America Bonds program, is moving a few deals along that might not have happened otherwise. The Section 242 Mortgage Insurance Program for Hospitals offers HUD-insured mortgages--funded by private lenders--to finance construction or renovation of acute-care facilities.

This particular loan is intended to allow the hospital to replace its outmoded current facility, which was built in 1969 and doesn't accommodate current needs, executives said.

The new facility will be a one-story, 71,158 square-foot facility housing 15 acute-care beds, a retail pharmacy and an outpatient center. It will include areas for imaging, labs, pharmacy, physical and respiratory therapy. HUD is estimating that the new project will provide an economic stimulus of $70.5 million to the region.

To learn more about the financing deal:
- read this Healthcare Finance News piece

Related Articles:
Second hospital in a month closes on HUD financing through Lancaster Pollard
HUD makes it easier for non-profit hospitals to refinance debt
HUD to offer new mortgage option for hospitals

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