$20 Million Senior Care Construction Loan

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $20 million senior care construction loan typically finances a 60 to 100 unit assisted living, memory care, or independent living development. Most $20M senior care construction projects fund through HUD 232 New Construction (90 percent LTC fully amortizing) or specialty bank/debt fund construction with separate permanent take-out.

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What a $20M Senior Care Construction Capital Stack Looks Like

$20M senior care construction stacks combine senior construction debt with institutional equity. HUD 232 New Construction is the gold standard for long-term hold; bank construction with separate take-out provides more flexibility.

Capital Source Rate / Cost Size / LTV Notes
HUD 232 New Construction 5.95 to 6.45% (35-year fully amortizing) $20M / 90% LTC Davis-Bacon prevailing wage; long-term hold
Specialty senior care construction SOFR + 425 to 600 (8.85 to 10.60%) $20M / 70 to 75% LTC Faster timeline; non-recourse possible
Bank balance sheet construction SOFR + 300 to 425 (7.60 to 8.85%) $20M / 60 to 70% LTC Recourse; depository relationship
Institutional equity Equity (target IRR 16 to 22%) $8M to $12M Senior housing equity partners

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Who Closes a $20M Senior Care Construction Deal

Typical $20M senior care construction sponsors are institutional senior care developer-operators with completed projects. Sponsor net worth $25M to $200M. Senior care operating experience is essential.

A Real $20M Example

On a $22M construction of an 84-unit assisted living and memory care community in a Sun Belt market, the sponsor was an institutional senior care operator with 12 communities. HUD 232 New Construction at 6.15 percent fixed 40-year fully amortizing at 88 percent LTC ($19.4M loan amount), with Davis-Bacon prevailing wage. The HUD process took 22 months from initial application to construction loan close.

Anonymized. All deal references protect borrower and lender identity.

$20M Senior Care Construction FAQ

Yes. HUD 232 New Construction finances assisted living, memory care, and skilled nursing construction at 90 percent LTC fully amortizing 40-year fixed.
HUD 232 New Construction takes 18 to 24 months from initial application to close due to MAP lender underwriting, HUD review, environmental assessment, and Davis-Bacon prevailing wage analysis.
Davis-Bacon is the federal prevailing wage law applying to HUD-financed construction. Davis-Bacon adds 8 to 18 percent to construction labor costs.

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