Home Mortgage Financing for Your Adult Care Home and Assisted Living Facility

As our aging population continues to increase, the demand for assisted living facilities is steadily growing as well. Unfortunately, building construction and other costs related to assisted living community units have also seen a significant increase.

Owners and operators of adult care homes, also called group homes, or assisted living facilities, may be pleased to learn that the mortgage they carry on their property may be eligible for Conventional home financing, which is the same type of financing they may currently have on their own personal residences.

If you own an assisted living facility, you may have considered refinancing at some point in order to lower your monthly mortgage payments or to free up cash for renovations or other expenses. Refinancing can be a great way to improve the financial health of your assisted living facility, but it’s important to understand the process and to carefully consider all of your options before moving forward.

Why Refinance?

There are several reasons why you might want to refinance your assisted living facility:

  • To lower your monthly mortgage payments: If you can qualify for a lower interest rate on your mortgage, you may be able to lower your monthly payments and reduce the burden on your facility’s finances.

  • To free up cash for renovations or other expenses: By refinancing your mortgage, you may be able to take out a larger loan, which can give you the funds you need to make improvements to your facility or to cover other expenses.

  • To consolidate debt: If you have other debts in addition to your mortgage, such as credit card debt or a loan for renovations, you may be able to consolidate those debts into a single loan by refinancing your mortgage. This can make it easier to manage your debt and may even save you money on interest.

Does My Care Home Facility Qualify for a Refinance?

Here are some of the general guidelines that determine if your Adult Care Home or Assisted Living Facility qualifies for a mortgage refinance:

  • Care homes are classified as subject properties that are being rented/leased to a business for the long-term care of individuals with disabilities.

  • When the property is being leased to a business entity, it becomes an eligible property style. 

  • When the owner leases the property to a business entity, the client must not plan to occupy the residence for any part of the year if rental income from that lease is being used to qualify. 

  • If the owner also owns the business that is renting out the care home, the rental income still cannot be used to qualify if the owner occupies for any portion of the year, but the business income may still be eligible.

  • Care homes are not considered boarding homes. 

Get Prepared for Your Refinance

Before you decide to refinance your assisted living facility, there are a few things you should consider:

  • Your credit score: To qualify for a good interest rate on your refinanced mortgage, you’ll need to have a good credit score. If your credit score is low, it may be difficult to qualify for a good rate.

  • Your current mortgage terms: It’s important to compare your current mortgage terms with the terms of any potential refinanced mortgage. Look at the interest rate, fees, and other terms to see if refinancing is really the best option for you.

  • Your financial goals: Think about why you want to refinance and whether it will help you meet your financial goals. If you’re looking to lower your monthly payments or free up cash, refinancing may be a good option. If you’re just trying to get a lower interest rate, you may be better off sticking with your current mortgage.

Refinancing your assisted living facility can be a great way to improve its financial health, but it’s important to carefully consider your options and to make sure it’s the right decision for you.