Continuing Care Homes

Occasionally potential borrowers wish to place financing on a residential property that has as its residents’ individuals who are in need of health and/or mental assistance. These are referred to as “continuing care homes” or “continuing care projects”. These communities may also be known by other names such as life-care facilities or assisted living.

In general, continuing care facilities are not eligible for standard financing whether the units in a project that operates, either wholly or partially, as a continuing care community. These communities or facilities are residential projects designed to meet specialized health and housing needs and typically require residents to enter into a lifetime contract with the facility to meet all future health, housing, or care needs. This makes the properties more of a commercial rather than residential project.

Properties or projects that make continuing care services available to residents are eligible for standard residential financing only if the continuing care facilities or services are not owned or operated by the Homeowners Association (HOA) associated with the property or project and the residential unit owners are not obligated to purchase or utilize the services through a mandatory membership, contract, or other arrangement.

One very important point, continuing care communities are not the same as age-restricted projects. Age-restricted projects that restrict the age of residents but do not require residents to enter into a long-term or lifetime contract for healthcare and housing as the residents age are eligible for standard financing as long as certain requirements are met. These requirements will be covered in a future post.

Continuing care homes and projects represent special challenges for financing based on their nature. Contact your Googain Loan Officer today for more information on these unique properties and projects for further information regarding eligibility.