The U.S. Department of Housing and Urban Development has approved a $33.1 million financing plan to replace a critical access hospital in Dillion, Mont. Officials say the plan will save the hospital an estimated $25.1 million in interest expense over the life of the loan.
The Barrett Hospital Development Corporation will use the loan to replace the Barrett Hospital & Healthcare facility, which officials said has numerous infrastructure problems and space limitations.
The 72,000-square-foot replacement facility will be an 18-bed critical access hospital on a 10-acre site near the existing campus and close to the interstate. It will provide inpatient and outpatient services to a population of approximately 12,000 people in its primary and secondary service areas.
The Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program is ensuring the loan. Hospital officials said the HUD 242 program will be used to pay for the new hospital as well as the equity portion, which will be provided by combining funds from hospital operations, a capital campaign and a community development block grant for the offsite infrastructure.
The HUD financing is specifically designed for this type of hospital replacement project, said officials. The loan includes a low fixed-interest rate over a 25-year term and is "non-recourse," meaning that HUD has a mortgage on the new hospital building and a pledge for revenues.
HUD officials estimate the Barrett Hospital & Healthcare construction project will support 432 full-time jobs and provide an estimated economic stimulus of more than $88.9 million to the community. Once completed, it's estimated the project will support 120 full-time jobs and provide an annual economic benefit of more than $18 million.
"(The) FHA is helping to build state-of-the-art healthcare facilities like this all across the country," said FHA Commissioner David Stevens. "By helping to make these projects possible, FHA also contributes to the financial well-being of communities by creating jobs to stimulate local economies."
Officials said the current hospital will remain fully open to serve the communities during construction of the new facility, which is scheduled to be completed in late 2011.
Cick here for more details about the new facility.