Tower Support

Federal Housing Administration-Insured Supplemental Mortgage Provides Financing for UNM Hospital Expansion

The Federal Housing Administration (FHA) has completed a mortgage insurance transaction with The University of New Mexico Hospital to finance construction of its new 96-bed tower.

The transaction, which closed on September 9, provides insurance on the $320 million supplemental mortgage obtained by the hospital under FHA’s Section 241(a) supplemental mortgage insurance program.

The transaction will provide funds to allow the hospital to create a new facility to expand its acute care and other services. UNMH is the only Level I trauma hospital and children’s hospital in the state and is the closest major health care facility for more than half of New Mexico’s population.

“As the nation continues to combat the COVID-19 pandemic, we’ve seen the devastating outcome that limited critical care space can have despite the heroic efforts of the nation’s doctors, nurses and first responders,” said Marcia L. Fudge, secretary of Housing and Urban Development.

“Expanding facilities like The University of New Mexico Hospital will provide vital critical care services to New Mexico’s residents, along with the access to health care information and preventive measures that can save more people during a national health emergency.”

“The UNMH team is pleased to continue our collaborative partnership with HUD,” said hospital CEO Kate Becker, JD, MPH. “This will enable us to provide increased access to health care for New Mexicans in New Mexico.”

Under FHA’s Section 241(a) supplemental mortgage insurance program, FHA insures the mortgage obtained by UNMH through Wells Fargo Bank, N.A. UNMH will use the proceeds of the transaction to construct a new facility and transition its existing facility into a center for women’s and children’s services.

FHA’s Office of Hospital Facilities manages the Section 242 program, which provides mortgage insurance for acute care hospital facilities ranging from large teaching institutions to small rural critical access hospitals.

FHA’s Section 241(a) program insures supplemental mortgages for hospitals and residential care facilities with FHA-insured first mortgages or HUD-held mortgages to finance repairs, additions, and improvements.

The program is intended to keep the facilities competitive, extend their economic life and to finance the replacement of obsolete equipment. As of June 30, 2021, FHA had active insurance on more than 4,000 mortgages for hospitals and residential care facilities.

You can learn more about FHA’s Section 242 program at the HUD website.