Assisting in refinance

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Tom Gale
Tom Gale

Lancaster Pollard recently had the pleasure of working with Eden Homes Group, a unique assisted living provider that was born of inspiration.

After her mother died at age 90, one of Eden Homes Group's owners lamented that she could not find the ideal care setting that she knew her mother would have desired. This would have been a facility that offered both attentive pampering and care as well as freedom of choice and independence.

Fortunately, when it came time to find a facility for her mother-in-law, the owner found a place that better fit her ideal notion of care. After joining forces with the owner/operator of that facility, as well as another business partner, the idea for Eden Homes Group was born.

Eden Homes Group currently operates six upscale AL and memory care facilities, four of which are located in Bethesda, MD. One of the factors that makes these facilities so unique is the fact that they are located seamlessly within residential neighborhoods and from the outside appear to be single family homes. However, each site was built with the intention of serving as an AL facility and includes all the necessary features to operate as such. Each group home houses eight residents and offers the attentive care of staff while emphasizing the residents' power to choose and retain independence.

Each of the four Bethesda facilities carries two loans—a bank loan and a small business administration (SBA) loan. When ownership was looking for funding to expand its business and build additional facilities, it realized its financial capacity to do so was limited by the debt derived from its eight outstanding loans. It sought a financial solution that would refinance and consolidate the eight loans and create the opportunity for Eden Homes Group to expand and pursue new construction projects.

Lancaster Pollard recommended a financial solution that would consolidate the eight loans under one new loan insured by the FHA Sec. 232/223(f) program. As the four separate homes all utilized shared services, were covered by the same insurance policies and effectively operated as one property, Lancaster Pollard was able to refinance the scattered sites under one loan.

The result was a $5.7 million loan that is nonrecourse and features a low interest rate and 35-year term. The refinance also results in significant annual debt service savings and approximately $150,000 for repairs and improvements such as new elevators and generators. The new financing structure improves Eden Homes Group's fiscal outlook and increases its borrowing capacity, allowing them to pursue additional financing to construct additional homes and expand their business. That will allow more residents in the future to enjoy the homelike setting and quality care Eden has to offer.

Tom Gale is a senior vice president with Lancaster Pollard.

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