U.S. Housing and Urban Development (HUD) Secretary Ben Carson today announced the Federal Housing Administration (FHA) will offer several incentives to encourage greater development of hospitals and health care facilities located in Opportunity Zones. In a speech in Miami, Secretary Carson said FHA can be a key partner for developers looking to invest in Opportunity Zones.
“This can be a win-win for residents living in these neighborhoods—more health care facilities and hospitals closer to home and greater employment opportunities for those in the health care industry,” said Secretary Carson.
FHA Commissioner Brian Montgomery added, “We’re providing a number of incentives to stimulate more building and rehabilitation of hospitals, nursing homes, assisted living facilities, and board and care facilities in Opportunity Zones across the country. It’s our hope these incentives will encourage significant levels of long-term investment in low-income communities.”
FHA’s Section 242 Program insures mortgages for acute care hospital facilities ranging from large teaching institutions to small rural critical access hospitals. Similarly, FHA’s Section 232 Programprovides mortgage insurance on loans that help finance nursing homes, assisted living facilities, and board and care facilities. These programs may be used to finance the purchase, refinance, new construction, or substantial rehabilitation of a project. A combination of these uses is acceptable – e.g. refinance of a nursing home coupled with new construction of an assisted living facility.
Effective immediately, FHA is giving priority to Section 232 applications it receives for facilities located in qualified Opportunity Zones. Most notably, FHA will provide expedited underwriting for Section 232 applications. FHA is. also reducing application/exam fees for all Section 242 and Section 232 transactions for facilities in Opportunity Zones. Read FHA’s notice.
Background
President Trump signed the 2017 Tax Cuts and Jobs Act, creating Opportunity Zones to stimulate long-term investment in low-income communities. Opportunity Zones offer capital gains tax relief to those who invest in these distressed areas. This initiative is anticipated to spur $100 billion in private capital investment in Opportunity Zones. Incentivizing investment in low-income communities fosters economic revitalization, job creation, and promotes sustainable economic vitality across the nation. Read more about Opportunity Zones.
On average, the median family income in an Opportunity Zone is 37 percent below its respective state median. Overall, more than 8,700 communities in all 50 States, Washington D.C., and five U.S. territories have been designated as Opportunity Zones. Nearly 35 million Americans live in communities designated as Opportunity Zones.