The $777 million loan is made possible through the Federal Housing Administration’s Section 242 Hospital Mortgage Insurance Program
By John Tredrea, Staff Writer
Capital Health System (CHS), which is building a 223-bed hospital in Hopewell Township, has gotten key backing from the federal government in increasingly perilous financial times.
The U.S. Department of Housing and Urban Development has made a commitment to insure a loan to CHS to build the hospital, which will replace the existing Mercer Medical Center in Trenton. The $777 million loan is made possible through the Federal Housing Administration’s Section 242 Hospital Mortgage Insurance Program.
”The support from HUD will enable us to bring to this region the finest healthcare facilities and most advanced medical care available,” said Al Maghazehe, CEO and president of Capital Health System, who also noted that this is the largest hospital project ever to be endorsed by HUD.
”We are proud that we met HUD’s high financial standards for approval and are pleased to partner with them on this important project,” he said.
In addition, the system’s Fuld Hospital will create two new medical-surgical units and provide space to accommodate services transferred from Mercer. By insuring the mortgage loan, FHA enabled Capital Health System to obtain a lower-cost financing, saving the hospital an estimated $487 million in interest payments throughout the life of the loan.
”After many years of determination and planning, community leaders will finally be able to bring a new state-of-the-art medical center to Hopewell Township,” said Brian Montgomery, a HUD official. “By lowering the cost of credit for Capital Health System, FHA will allow the company to use more of its resources to do what it does best — making people healthier.”
CHS says the construction project will create 4,767 full-time jobs. Once completed, the hospital will support an estimated 2,209 jobs in the hospital and surrounding community.
FHA’s Section 242 Mortgage Insurance Program for Hospitals provides HUD-insured mortgages made by private lending institutions to finance construction or renovation of acute care hospitals, including major equipment needed to operate the facility.
The eligible applicants can be public, proprietary, or nonprofit hospitals certified by the responsible state agency.