Mortgage insurance for nursing homes, intermediate care facilities, and board and care homes
Terms and conditions; limitation on maximum amount of mortgage; amortization; interest; certification from State agency
In order to carry out the purposes of this section, the Secretary is authorized to insure any mortgage which covers a new or rehabilitated nursing home,,
assisted living facility, or intermediate care facility, including a new addition to an existing nursing home, assisted living facility, or intermediate care facility and regardless of whether the existing home or facility is being rehabilitated, or any combination of nursing home, assisted living facility, and intermediate care facility or a board and care home, including equipment to be used in its operation, subject to the following conditions:
The mortgage shall be executed by a mortgagor approved by the Secretary. The Secretary may in his discretion require any such mortgagor to be regulated or restricted as to charges and methods of financing, and, in addition thereto, if the mortgagor is a corporate entity, as to capital structure and rate of return. As an aid to the regulation or restriction of any mortgagor with respect to any of the foregoing matters, the Secretary may make such contracts with and acquire for not to exceed $100 such stock or interest in such mortgagor as he may deem necessary. Any stock or interest so purchased shall be paid for out of the General Insurance Fund, and shall be redeemed by the mortgagor at par upon the termination of all obligations of the Secretary under the insurance.
The mortgage shall involve a principal obligation in an amount not to exceed 90 per centum of the estimated value of the property or project, or 95 percent of the estimated value of the property or project in the case of a mortgagor that is a private nonprofit corporation or association (under the meaning given such term for purposes of section 1715l(d)(3) of this title), including—
equipment to be used in the operation of the home or facility or combined home and facility when the proposed improvements are completed and the equipment is installed; or
a solar energy system (as defined in subparagraph (3) of the last paragraph of section 1703(a) of this title
) or residential energy conservation measures (as defined in section 8211(11)(A) through (G) and (I) of title 42)
See References in Text note below.
in cases where the Secretary determines that such measures are in addition to those required under the minimum property standards and will be cost-effective over the life of the measure.
The mortgage shall—
provide for complete amortization by periodic payments within such terms as the Secretary shall prescribe; and
bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee.
The Secretary shall not promulgate regulations or establish terms or conditions that interfere with the ability of the mortgagor and mortgagee to determine the interest rate; and
So in original. The “; and” probably should be a period.
With respect to nursing homes and intermediate care facilities and combined nursing home and intermediate care facilities, the Secretary shall not insure any mortgage under this section unless he has received, from the State agency designated in accordance with section 604(a)(1) or section 1521 3
of the Public Health Service Act [42 U.S.C. 291d
(a)(1), 300m] for the State in which is located the nursing home or intermediate care facility or combined nursing home and intermediate care facility covered by the mortgage, a certification that (i) there is a need for such home or facility or combined home and facility, and (ii) there are in force in such State or in the municipality or other political subdivision of the State in which the proposed home or facility or combined home and facility is to be located reasonable minimum standards of licensure and methods of operation governing it. No such mortgage shall be insured under this section unless the Secretary has received such assurance as he may deem satisfactory from the State agency that such standards will be applied and enforced with respect to any home or facility or combined home and facility located in the State for which mortgage insurance is provided under this section. If no such State agency exists, or if the State agency exists but is not empowered to provide a certification that there is a need for the home or facility or combined home and facility as required in clause (i) of the first sentence, the Secretary shall not insure any mortgage under this section unless (i) the State in which the home or facility or combined home and facility is located has conducted or commissioned and paid for the preparation of an independent study of market need and feasibility that (I) is prepared in accordance with the principles established by the American Institute of Certified Public Accountants; (II) assesses, on a marketwide basis, the impact of the proposed home or facility or combined home and facility on, and its relationship to, other health care facilities and services, the percentage of excess beds, demographic projections, alternative health care delivery systems, and the reimbursement structure of the home, facility, or combined home and facility; (III) is addressed to and is acceptable to the Secretary in form and substance; and (IV) in the event the State does not prepare the study, is prepared by a financial consultant who is selected by the State or the applicant for mortgage insurance and is approved by the Secretary; and (ii) the State complies with the other provisions of this subparagraph that would otherwise be required to be met by a State agency designated in accordance with section 604(a)(1) or section 1521 3
of the Public Health Service Act. The proposed mortgagor may reimburse the State for the cost of the independent feasibility study required in the preceding sentence. In the case of a small intermediate care facility for the mentally retarded or developmentally disabled, or a board and care home housing less than 10 individuals, the State program agency or agencies responsible for licensing, certifying, financing, or monitoring the facility or home may, in lieu of the requirements of clause (i) of the third sentence, provide the Secretary with written support identifying the need for the facility or home.
With respect to board and care homes, the Secretary shall not insure any mortgage under this section unless he has received from the appropriate State licensing agency a statement verifying that the State in which the home is or is to be located is in compliance with the provisions of section 1616(e) of the Social Security Act [42 U.S.C. 1382e
With respect to assisted living facilities or any such facility combined with any other home or facility, the Secretary shall not insure any mortgage under this section unless—
the Secretary determines that the level of financing acquired by the mortgagor and any other resources available for the facility will be sufficient to ensure that the facility contains dwelling units and facilities for the provision of supportive services in accordance with subsection (b)(6);
the mortgagor provides assurances satisfactory to the Secretary that each dwelling unit in the facility will not be occupied by more than 1 person without the consent of all such occupants; and
the appropriate State licensing agency for the State, municipality, or other political subdivision in which the facility is or is to be located provides such assurances as the Secretary considers necessary that the facility will comply with any applicable standards and requirements for such facilities.
[June 27, 1934, ch. 847], title II, § 232, as added [Pub. L. 86–372, title I, § 115], Sept. 23, 1959, [73 Stat. 663]; amended [Pub. L. 87–70, title VI, § 610], June 30, 1961, [75 Stat. 180]; [Pub. L. 88–560, title I, § 117], Sept. 2, 1964, [78 Stat. 779]; [Pub. L. 89–117, title XI, § 1108(m)], Aug. 10, 1965, [79 Stat. 505]; [Pub. L. 90–19, § 1(a)(3)], May 25, 1967, [81 Stat. 17]; [Pub. L. 90–448, title III, § 314], Aug. 1, 1968, [82 Stat. 511]; [Pub. L. 91–152, title I, § 111], Dec. 24, 1969, [83 Stat. 382]; [Pub. L. 93–204], Dec. 28, 1973, [87 Stat. 883]; [Pub. L. 93–383, title III, § 304(g)], Aug. 22, 1974, [88 Stat. 678]; [Pub. L. 95–128, title III, § 308(a)], Oct. 12, 1977, [91 Stat. 1135]; [Pub. L. 95–557, title III, § 312], Oct. 31, 1978, [92 Stat. 2099]; [Pub. L. 96–399, title III, § 310(f)], Oct. 8, 1980, [94 Stat. 1643]; [Pub. L. 98–181, title I] [title IV, §§ 404(b)(10), 437], Nov. 30, 1983, [97 Stat. 1209], 1222, 1223; [Pub. L. 98–479, title I, § 104(a)(1)], Oct. 17, 1984, [98 Stat. 2224]; [Pub. L. 100–242, title IV], §§ 410(a), (b), 429(e), Feb. 5, 1988, [101 Stat. 1904], 1918; [Pub. L. 102–550, title V, § 511(a)]–(e), Oct. 28, 1992, [106 Stat. 3784–3786]; [Pub. L. 105–65, title II, § 216], Oct. 27, 1997, [111 Stat. 1367]; [Pub. L. 105–276, title II, § 214(a)], Oct. 21, 1998, [112 Stat. 2486].)