HUD Seeks to Codify Hospital Refinancing Rules - February 2, 2010

The Department of Housing and Urban Development (HUD) on January 29 issued a proposed rule to revise regulations under the 242 Hospital Mortgage Insurance Program, permitting hospitals to refinance existing loans without requiring such refinancing to be connected to the expenditure of funds for construction or renovation. In the wake of the economic downturn, the Federal Housing Authority (FHA) has permitted hospitals to make such refinancing arrangements since issuing a notice on July 1, 2009. HUD's proposed rule would codify FHA's implementation of this policy, allowing hospitals to continue to access much-needed capital through refinancing of non-FHA-insured loans. The due date for comments on the proposed rule is March 30, 2010.