Skip to content


Accessing capital—when you need it—at the most favorable rates. Reducing debt service payments or converting short-term debt into a long-term, fully amortizing loan. In the hospital industry, these are critical to overall operations. That’s why clients turn to SMF to meet their financing needs—for construction, renovations, expansion, acquisitions, or refinancing.


With more than 15 years of hands-on hospital financing experience, including having financed the first hospital under HUD’s Section 242/223(f) program in 2011, SMF understands every aspect of HUD’s programs and underwriting requirements.


As an originator, processor, underwriter, and funder of loans for hospital projects, we take a hands-on approach with every client. Our technical expertise ensures a nimble, efficient process where promises are kept, expectations are managed, decisions are optimized, and even the most complicated deals are done right, on time.




Section 242 of the National Housing Act enables the affordable financing of hospital projects by reducing the cost of capital and significantly enhancing the credit of hospitals that qualify for mortgage insurance. The program improves access to quality health care, reduces the cost of hospital care, supports HUD’s community development mission, and contributes revenues to the General Insurance Fund. Currently, hospitals in HUD’s Section 242 portfolio range from small rural facilities to some of the nation’s top urban teaching hospitals.

To qualify for a refinance loan, hospitals must have an average operating margin of at least 0.00% and an average debt service coverage ratio of at least 1.40 X for the past three years.  To qualify for a construction or rehabilitation loan, hospitals must have an average operating margin of at least 0.00% and an average debt service coverage ratio of at least 1.25 X for the past three years.

If these tests can’t be met, there are alternative methods to determine eligibility.

Construction or Substantial Rehabilitation
  • HUD Section 242 – For new construction, substantial rehabilitation, or renovation of existing hospitals.
Refinancing or Purchase
Expansion or Renovation
  • HUD Section 241 Supplemental Loans to expand or renovate existing hospitals already financed with HUD-insured loans.

why work with sims mortgage funding

We are industry thought leaders 
The Sims Mortgage Funding team has collectively over 100 years of experience with HUD programs.   We are known and respected by our peers in the industry. We serve on committees of national trade groups that help HUD establish FHA policies. We also have access to senior people at both HUD and FHA. We talk to them about policy one day; then about projects the next. And our clients reap the benefits.

Our entire organization is client focused
HUD-insured financing is a complex activity. We provide borrowers with superior personal service, and take a hands-on approach to every project. We know how to work through the inevitable issues and hiccups and get the best deal for our clients. And because we understand the best deal is one that gets closed quickly, we don’t promise things that can’t be delivered.