Illustrative structure · SBA 504 refinance
$2.5M 58-bed assisted living
An owner-operator of a 58-bed assisted living community wants longer fixed-rate debt on a loan around $2.5 million. That is below the size where HUD's fixed costs usually make sense.
Illustrative example. Structures shown are illustrative examples of how these programs are typically arranged. They are not client testimonials or guarantees of results; actual terms vary by borrower, asset, and market. This is not a closed transaction and not an offer or commitment to lend.
Why this structure
- HUD financing carries third-party reports, legal and title work, and an annual CPA audit (modeled at $20,000 a year). Below roughly $3,500,000, those costs usually outweigh the rate and term advantage.
- An SBA 504 loan pairs a bank first lien with a CDC debenture that carries a fixed rate for 25 years, so the largest slice of the debt is fixed without a HUD audit.
- Care facilities are special-purpose property under 504 rules, so the borrower contributes more equity than on a general-purpose building.
Typical 504 shape at this size
| Source | Amount | Share |
|---|---|---|
| Bank first lienLender of record on the first mortgage | $1,250,000 | 50.0% |
| CDC debenture (SBA 504)25-year fixed rate, second lien | $875,000 | 35.0% |
| Borrower equityIncludes the special-purpose property add-on | $375,000 | 15.0% |
| Total | $2,500,000 | 100.0% |
On a refinance, the borrower's equity is existing equity in the property. SBA's rules for refinancing existing debt, including eligible debt and a required minimum benefit to the borrower, decide whether a given loan fits; the advisor and the CDC confirm eligibility.
Program parameters used
- First lien share of project
- 50%Modeled assumption, reviewed 2026-10-31; confirm against the SBA SOP in effect at application.
- Debenture amortization
- 25 years, fixedModeled assumption, reviewed 2026-10-31; confirm against the SBA SOP in effect at application.
- Equity, special-purpose property
- 15%Modeled assumption, reviewed 2026-10-31; confirm against the SBA SOP in effect at application.
- Debenture ongoing fees
- 1.09%Bundled into the effective debenture rate.
- Debenture upfront fees
- 2.15%Financed into the debenture.
- Modeled HUD annual audit avoided
- $20,000Modeled on the current HUD handbook, reviewed 2026-10-31; confirm with a HUD lender.
- Typical SBA timeline
- 45–75 daysAfter a complete file. Not guaranteed.
Timelines are typical ranges after a complete file and are subject to lender approval, appraisal, title, and diligence. They are not guaranteed.
How it typically unfolds
Step 1
Check whether HUD or 504 fits the size
The advisor compares both on all-in cost, not rate alone, using the loan sizer assumptions.
Step 2
Line up a bank and a CDC
A bank agrees to the first lien. A Certified Development Company packages the debenture and submits it to SBA.
Step 3
Underwriting and SBA review
The bank, the CDC and SBA each review the file. Each can ask for more information or change terms.
Step 4
Closing and funding
The lender funds as lender of record. Corin does not hold or move loan funds.
What a lender will look at closely
- State licensing and the operating history of the community, including any change of operator.
- Census and payor mix, because lenders underwrite the cash flow of the operation as well as the real estate.
- Whether the existing debt is eligible to be refinanced under SBA's rules.
- The prepayment schedule on the debenture, which declines over time.
Have a similar property?
Other representative structures
- $14.5M 110-key flagged hotel + PIPSBA 504 Green $5.5M + Bank 1st
- $16.8M 96-bed memory careBridge-to-HUD 232/223(f)
- $9.2M Boutique hotel → assisted livingConversion bridge · California
- $24M 120-unit ground-up apartmentsBank construction loan + C-PACE
- $2.1M 8-unit apartment purchase and rehabPrivate lender · purchase + rehab
All rates, terms, and sizing are indicative estimates for discussion only, are not a commitment to lend, and are subject to lender underwriting, appraisal, credit approval, and program guidelines in effect at application. Corin Commercial arranges loans as a licensed California real estate broker and is not the lender. Corin Commercial, Inc. · Real estate broker, California Department of Real Estate · CA DRE Corp. License #01522444 · Designated Officer: Neeli Khanna