News - 2006
2009 | 2008 | 2007 | 2006 | 2005
2006-H002
RED CAPITAL Provides FHA Sec. 242 Mortgage Financing for Colorado Critical Access Hospital
Melissa Memorial to Build Replacement Facility
Melissa Memorial Hospital Rendering
Holyoke, Colorado
Provided by: HEERY-HLM Design
Columbus, OH, December 5, 2006 - Red Mortgage Capital, Inc., one of the nation's most active FHA approved mortgage lenders specializing in multifamily housing, seniors and hospital financing, recently provided a $16,500,000 FHA Section 242 insured mortgage loan for Melissa Memorial Hospital, a critical access hospital located in Holyoke, Colorado.
Loan proceeds will be used for the construction and permanent financing of a replacement hospital and clinic for Melissa Memorial. The fixed rate financing is non-recourse and will fully amortize over 25 years. Upon completion, the new, single-story, 48,000 square foot hospital and clinic will replace 40 year old facilities that cannot accommodate modern medical equipment and high volumes of out-patience services. The new facility will include private patient rooms and expansions to the family practice clinic, lab, imaging, surgery, labor and delivery, therapy and emergency departments. Melissa Memorial's rural service area in northeastern Colorado covers a population of approximately 13,000 people.
Many of America 's rural hospitals have obsolete facilities that are in desperate need of updating even though these hospitals are the sole source of acute healthcare for many people. HUD's assistance to the nation's rural hospitals under the FHA Section 242 mortgage insurance program helps to address this serious situation. Melissa Memorial's mortgage insurance commitment was issued by HUD in less than 90 days from application. The quick turnaround coordinated by Red Mortgage Capital and HUD/HRSA from application to loan closing was critical in allowing the hospital to proceed without any construction cost increases - a significant factor during a period of escalating construction costs. The project team included initial project assessment by Stroudwater Associates, HLM Design as architect, The Neenan Company as construction manager and BKD, LLP as public auditor and feasibility consultant.
Arlene Harms, Administrator, CFO, Melissa Memorial Hospital said, "Red Mortgage Capital personnel provided us with knowledge and support, to make the dream of a new medical campus become a possibility. Both Charles Ervin and Eric Mestemaker were willing to devote the time and patience necessary to get us through the details of the FHA mortgage loan. In addition, the individuals at HUD/HRSA were very helpful and I believe truly committed to helping us to achieve success."
Charles C. Ervin, Managing Director, Red Mortgage Capital, said, "We were blessed on this financing to work with exceptional teams at both the hospital and HUD/HRSA. The hospitals staff was extremely dedicated and thorough and each of the finance team participants had significant health care experience, including previous FHS Section 242 experience. The quick insurance commitment processed by the HUD hospital finance program professionals proved beyond a doubt that HUD is committed to help secure the future of America 's rural hospitals."
