Term Sheets

The Healthy Futures Fund involves a number of partners all working toward the same goals: to help low-income residents live healthier.  Initial Fund investments in community health centers will come through Local Initiatives Support Corporation's (LISC) allocation of New Markets Tax Credits.  LISC has a specialized affiliate that focuses on its New Markets business, called New Markets Support Company (NMSC).  NMSC manages the Healthy Futures Fund.

What follows are both the term sheet for direct fund investments, as well as information from fund partners on lending and investment programs related to community health centers.

Healthy Futures Fund: FQHC First Mortgage Financing

Eligibility

• The operating entity of the proposed health center is a Federally Qualified Health Center (FQHC) or Look-Alike.

• The ideal health center project is co-located with a provider of non-clinical services that impact one or more social determinant of health. Examples of such services include but are not limited to: affordable housing, healthy food outlets and grocery stores, education or job training, fitness and wellness services.

• The project must be located in an NMTC-qualified census tract and be designated highly distressed.

• The health center must occupy at least 51% of the space being financed through the Healthy Futures Fund using NMTCs.

• The qualifying HFF mortgage loan is targeted between $2MM and $10MM.

Rates and Terms

• 7-year initial term with first 30 months interest-only then amortizing based on a 19-year schedule

• Rate fixed for 7 years at 7-year LIBOR swap + 200 to 250 basis points (the 7-year swap rate as of 10/22/2015 is 1.69% which would yield an interest rate of 3.69% to 4.19%)

• Loan-to-Value up to 110% based on as-built appraisal

• 1.2 to 1.0 Debt Service Coverage Ratio

• Transaction costs capped at $30,000 for lender legal fees, excludes borrower legal and consulting expenses and standard costs normally associated with a real estate loan, such as lender appraisal, cost review/inspection, insurance review, and title costs.

• Cancellation of approximately 24% of the original loan amount to the borrower upon the successful third-party refinance of the remaining principal balance.

Contact

Robert Poznanski, Senior Vice President & Chief Operating Officer

LISC’s New Markets Support Company (Fund Manager)

269-459-4123 or rpoznanski@newmarkets.org

 

Partner term sheets/lending information

Our Fund partners have lending programs that frequently support development of community health centers.  Visit these links for more information.