Recent Senior Housing Finance Activity: Love, Ziegler, KeyBank

Love Funding Secures a $4.6 Million Loan Refinance for Illinois ALF

Love Funding announced on Jan. 3 that it closed a $4.6 million refinancing through the Department of Housing and Urban Development’s 232/223(f) loan program for an assisted living and memory care center located in Milan, Illinois.

Avonlea Cottage of Quad Cities is a 46-unit facility, 30 of which are Alzheimer units licensed by the Illinois Department of Public Health, that was built in two stages, with one building completed in 2001 and another finished in 2007.


The loan refinancing was secured by Love Funding vice chairman Harry Cheatham of the company’s St. Louis office. Using the HUD program enabled the property’s owner to obtain a low interest rate, non-recourse loan with a 35-year term, which Love Funding says will generate “substantial debt service savings that will help address nearly $60,000 in needed repairs.”

Love Funding Provides $19.9 Million of Refinancing for Assisted Living Portfolio in Michigan

Love Funding announced on Jan. 5 that it had refinanced five loans totaling $19.9 million for a portfolio of Michigan assisted living facilities. The loans were secured through the U.S. Department of Housing and Urban Development’s Section 232/223(a)(7) LEAN loan program by Bruce Gerhart and Robert Smallwood, from Love Funding’s Cleveland office.


The refinanced properties are Appledorn Living Center in Holland; Seminole Shores Living Center in Muskegon; Edgewood Living Center in Saginaw; Ludington Woods Living Center in Ludington; and Woodlawn Meadows Retirement Village in Hastings. The FHA-insured refinance program allowed the properties’ owners to lock in a low fixed interest rate, saving them a combined $252,000 in annual debt service costs.

All five existing mortgages had been encumbered by prepayment penalties ranging from two to six percent of the outstanding loan amounts, but the interest savings through the refinancing were so substantial that Gerhart and Smallwood were able to make the transaction worthwhile through returning mortgage balances to original amounts and addressing the balances with modest premium adjustments.

Ziegler Finalizes $59 Million Covenant Retirement Communities Financing

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Specialty investment bank Ziegler recently announced the closing of a tax-exempt bank direct purchase for Covenant Retirement Communities (CRC), completed by JP Morgan Chase and structured as two series of bonds: $15.83 million of Series A Bonds, and $43,335,000 Series B Bonds, for a total of $59,165,000 (Series 2011 Bonds).

The CRC financing is the first done through the Illinois Finance Authority, which passed legislation in July 2010 allowing it to serve as a multi-state conduit issuer.

“The IFA multistate legislation provided a very cost effective and efficient process which allowed CRC to issue bonds to refund prior issues in Colorado, Michigan and Illinois and to fund new projects in each of these states as well,” said Don Carlson, managing director and vice chairman at Ziegler, in a statement. “This transaction will further strengthen CRC’s conservative capital structure, which will allow them to continue to provide the highest level of service to their residents. This transaction was truly a success on many fronts.”

Proceeds from the Series 2011 Bonds were used to refund outstanding Series 1999 (MI) and (CO) Bonds, Series 2004 Bonds, and Series 2006 Bonds, in addition to providing CRC more than $6 million of new money to pay for capital improvements for several CRC campuses in Colorado, Illinois, and Michigan.

Ziegler also worked with CRC to replace two letters of credit for Series 1992 and 1995 bonds, which will be secured by letters of credit from JP Morgan Chase.

Love Funding Arranges $2.81 Million Refinancing for Michigan ALF

On Jan. 9, Love Funding announced that it had secured $2.81 million of loan refinancing for a Lawton, Michigan assisted living and dementia care facility. Love Funding First Vice President Robert L. Smallwood of the company’s Cleveland office arranged the loan for White Oaks, a 72-bed facility owned by the Randall family, which owns five other assisted living properties in Ohio and Michigan.

The refinancing was done through the Department of Housing and Urban Development’s Section 232/223(a)(7) LEAN loan program, through which the owners were able to generate approximately $28,500 in annual debt savings and pay off a 6% prepayment penalty through the sale of a Ginnie Mae mortgage-backed security along with proceeds from the loan.

This is the third HUD transaction Smallwood has closed for the Randall family since September, for a total annual debt savings of approximately $119,000.

KeyBank Closes $132 Million of Freddie Mac Refinancing for Five Senior Housing Communities

KeyBank Real Estate Capital recently provided five Spectrum Retirement Communities located in Colorado, Kansas, and Missouri, with $132 million of Freddie Mac financing.

Headquartered in Denver, Colo., Spectrum is a developer, owner, and operator of retirement, assisted living, and memory care communities across the U.S. The financing transaction obtained a 7-year Freddie Mac variable rate loan for each of the five communities.

Lincoln Meadows Senior Living, a 213-unit independent living, assisted living, and Alzheimer community in Colorado, received $39.8 million in refinancing, and $20.7 million of refinancing went toward another Colordo independent living community, the 129-unit Lakeview Senior Living. A 222-unit Kansas independent and assisted living community, Park Meadows Senior Living, got a $35.4 million refinance, while the 124-unit Shawnee Hills Senior Living, also located in Kansas, got $14.9 million. A 132-unit independent living community in Missouri, Crestview Senior Living, obtained a $21.2 million refinancing loan.

Love Funding Closes a $4.34 Million Refinance Loan for Idaho Assisted Living Community

Love Funding announced on Jan. 11 that it had closed a $4.34 million loan refinancing for AarenBrooke Place, a 70-bed assisted living community located in Boise, Idaho.

The loan was secured through HUD’s Section 232/223(a)(7) loan insurance program by Chad Ricks, Love Funding’s first vice president and senior loan originator for the company’s Dallas office. The HUD program allowed the property owner to lock in a low, fixed-interest rate for a 35-year term, which will generate more than $28,000 in annual debt service savings.

AarenBrooke Place is operated by Ashley Manor, LLC.

Written by Alyssa Gerace

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