On September 7, 2012, the Federal Housing Administration (FHA)
published new regulations for the Section 232 Healthcare Facility
Insurance Program in the Federal Register. FHA had previously proposed
new regulations and loan documents on May 3, 2012. On November 21,
2012, the U.S. Department of Housing and Urban Development (HUD)
released revised draft loan documents to match the final
regulations released on September 7, 2012. Below are highlights of
the new draft loan documents, summarizing how some of the changes
will affect borrowers, operators and mortgagees.
Mortgage, Assignment of Leases, Rents and Revenue and Security
Agreement
The first noticeable change from the current documents is that
HUD has combined the Security Instrument and Owner Security
Agreement. The document closely resembles the multifamily mortgage
in style and substance, including the exculpation language
concerning the key principal identified in the Mortgagor's
Regulatory Agreement. We
