Section 503

Continuing Care Retirement Communities (CCRCs)

Requirements

You must ensure that a CCRC CCRCSeniors Housing Property that provides a continuum of care on a single campus, including any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. has:

  • had at least 90% physical occupancy for each of the past 5 fiscal years;
  • debt service reserves equal to at least 1 year of P&I P&IPrincipal and interest ; and
  • a DSCR DSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Pay Preferred Equity payments. of at least 1.00 based on annualized rent collections and operating expenses, excluding net entrance fees.

For any CCRC CCRCSeniors Housing Property that provides a continuum of care on a single campus, including any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. with an entrance fee, your underwriting must include a summary and analysis of the following:

  • actuarial report (including a copy of the report);
  • range and weighted average of entrance fees offered at the Property PropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , which must be within the range of median home values in the local market;
  • entrance fee refund plans (for example, full, partial, declining, non-refundable);
  • required entrance fee reserve;
  • whether the entrance fee reserve can be assigned as collateral for the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 ;
  • net entrance fee income (collections minus refunds) for the past 5 years;
  • sufficiency of the entrance fee reserve;
  • market analysis of entrance fees;
  • underwritten net entrance fee income;
  • historical annual resident turnover;
  • required operating reserves;
  • whether the operating reserves can be assigned as collateral for the Mortgage Loan Mortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 ;
  • identity of all governmental authorities that license the Property PropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). and Seniors Housing Operator; and 
  • status of each required license.