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Rural Health Information Hub

HUD Section 242: Hospital Mortgage Insurance Program

Catalog of Federal Domestic Assistance Number: 14.128
Federal Housing Administration, U.S. Department of Housing and Urban Development
Applications accepted on an ongoing basis

Section 242 of the National Housing Act provides mortgage insurance for acute care hospital facilities ranging from large teaching institutions to small, rural Critical Access Hospitals.

The Federal Housing Administration (FHA) helps hospitals access affordable financing for capital projects. Uses may include remodeling, expansion, modernization, equipment, refinancing, and acquisition.


Use the pre-screening tool to determine eligibility.

Geographic coverage
Amount of funding

Loan terms include:

  • No maximum loan amount
  • Loan-to-value up to 90%
  • No cash required at closing with sufficient equity
  • FHA insures 99% of loan amount

Flexible funding options include:

  • Taxable bonds
  • Tax-exempt bonds
  • Ginnie Mae securities
  • Whole loan placements
Application process

Visit the How to Get Started page to review the 10 step process for submitting and completing a HUD Section 242 project.

Tagged as
Capital funding · Critical Access Hospitals · Hospitals · Sole Community Hospitals

Organizations (1)

  • U.S. Department of Housing and Urban Development, view details

For complete information about funding programs, including your application status, please contact funders directly. Summaries are provided for your convenience only. RHIhub does not take part in application processes or monitor application status.