News - 2008
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RED CAPITAL Provides FHA Sec. 241 Mortgage Financing for Colorado Critical Access Hospital
Rio Grande Hospital to Build New Outpatient Health Clinic
Rio Grande Hospital
Del Norte, Colorado
Columbus, OH, January 11, 2008 — Red Mortgage Capital, Inc., the mortgage banking arm of comprehensive capital provider RED CAPITAL GROUP and one of the nation’s most active FHA approved mortgage lenders, recently provided a $1,950,000 FHA Section 241 insured mortgage loan for Rio Grande Hospital, a critical access hospital located in Del Norte, Colorado. This transaction represents the first FHA Section 241 financing for a critical access hospital in the 40 year history of the FHA hospital insurance program.
Loan proceeds will be used for the construction and permanent financing of an outpatient health clinic adjacent to Rio Grande Hospital. The financing provides a supplemental loan to the Hospital’s existing FHA Section 242 mortgage loan, which originally financed the construction of a replacement hospital facility. Like the Hospital’s FHA Section 242 loan, the supplemental loan is non-recourse and will provide fixed rate financing that will fully amortize over 25 years. Upon completion, the 7,500 sq.ft. health clinic will replace the Hospital’s existing clinic facility and will provide new administrative and clinical space for physicians, expanded space for new specialty clinics, greater operating efficiency, and improved accessibility, convenience and safety for patients.
Rio Grande Hospital’s mortgage insurance commitment was issued in less than 30 days and the entire process from application submission to insurance endorsement and funding was concluded in less than 90 days, allowing the Hospital to secure $500,000 of grant funding for the Project and lock the fixed interest rate on the loan. The quick turnaround was made possible by HUD’s willingness to support the project, Hospital administration’s comprehensive preparation and responsiveness, and Red Capital’s expertise in rural hospital finance.
Arlene Harms, Administrator of Rio Grande Hospital, said, "This was my second experience working with Red Capital Group on a hospital project. I can’t thank the Red Capital team enough. One thing that is incredibly important to me is trust and they provided integrity as well as support. Their knowledge of the HUD application process and ability to assist us was invaluable. I would highly recommend Red Capital Group to any healthcare entity considering a building project."
Eric J. Mestemaker, Director of Red Mortgage Capital, said, "Rio Grande Hospital and the Del Norte, Colorado community continue to be trailblazers. Rio Grande Hospital was the first critical access hospital to complete a facility replacement with the FHA 242 mortgage insurance program and now is also the first CAH to use FHA's 241 supplemental loan program. This loan application was prepared, submitted and approved in less than 40 days. Congratulations to everyone from the Hospital, HUD and Red Capital who made this project funding possible in such a short period of time."
