Construction Financing

Cal-Mortgage Loan Insurance Program

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Featured Projects

Most recent bond pricing and interest rates

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Reports

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Advisory Loan Insurance Committee

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Fees

Find information on fees, premium schedules, and pricing structures

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Loan Insurance Application Process

Cal-Mortgage administers the California Health Facility Construction Loan Insurance Program. Cal-Mortgage provides credit enhancement for eligible health care facilities when they borrow money for capital needs. Cal-Mortgage insured loans are guaranteed by the “full faith and credit” of the State of California. This guarantee permits borrowers to obtain lower interest rates, similar to the rates received by the State of California.

Application Review Process

The following is a brief description of the loan insurance application review process. Detailed information is contained in the application instruction package.

  1. Preliminary Project Review (No fees due at this time): Upon receipt of specific documents, which includes audited financial statements for the prior three years, copies of current licenses, and other documents described in the application instruction package, an Account Manager is assigned to discuss the proposed project, visit the site, introduce themselves to the Board of Directors/Trustees, and determine the applicant’s eligibility to submit a formal application for consideration.
  2. Formal Application Review: At this time the Account Manager commences the application review process and the non-refundable application fee of $500 is paid by the applicant. The Account Manager reviews the additional information and makes an eligibility determination.
  3. Formal Application: Financial Feasibility Review: Additional documents are required, including a Financial Feasibility Study prepared by a paid financial consultant who is not an employee of the applicant. There may be an exception to this requirement if the borrowing is less than $5 million. If this is the case, the applicant will consult with the Account Manager.
  4. To continue with the process: The Account Manager, his/her supervisor, and the Cal-Mortgage Division’s Deputy Director must recommend approval of the project to an advisory committee and the Director. Approval of an application will include standard and/or special conditions.
  5. Review by the Advisory Loan Insurance Committee: The Committee holds a public meeting to discuss the proposed application for the project. After input is solicited from the staff, the applicant, and community, the Committee decides whether to recommend the project to the OSHPD Director for approval.
  6. Issuance of a commitment to insure a loan: If the Director agrees with the recommendations to insure the loan, a conditional letter of commitment is issued.
  7. Sale of the Bonds: Conditions included in the letter of commitment must be satisfied concurrent with the sale of the bonds.
  8. Close of Escrow
Participants in the application process include:
  • The Borrower
  • The Borrower’s Attorney
  • Cal-Mortgage Staff
  • Cal-Mortgage Staff Counsel
  • The Advisory Loan Insurance Committee
  • Bond Counsel
  • Financial Feasibility Consultant
  • Investment Banker
  • Special Counsel
  • Treasurer’s Office Staff
  • Financial Institution Trust Officer
  • Title Company
  • Escrow Company
  • Cal-EPA Staff

See: California Health Facility Construction Loan Insurance Law and Related Laws, including California Code of Regulations, Title 22, Division 7, Chapter 5 entitled “Health Facility Construction Loan Insurance,” at Volume 31, pages 1214 to 1219.

Loan insurance requests are reviewed for adherence to specific laws and regulations, credit worthiness, and community needs.

There is a non-refundable application fee of $500 due when the application is filed. A certification and inspection fee of four tenths of one percent (0.4 percent) of the amount insured and an insurance premium fee is due at the close of escrow. The one time insurance premium is based on the credit rating of the applicant by Standard & Poor’s, Fitch, or Moody’s. Unrated projects pay a 3% premium. For more information, see the insurance premium fee schedule.

Blackout Period

Please note that insured bond transactions may not be priced or issued during the state’s blackout periods, roughly December 1 through January 10 and from May 1 through May 14 (or the earlier of the State budget enactment date).

Application Package

Cal-Mortgage Loan Insurance application packages are available through the following channels:

  • via online application package download below
  • via email at Cal-Mortgage Loan Insurance 
  • via phone request at (916) 319-8800
  • via writing to:
    Cal-Mortgage Loan Insurance Division
    2020 West El Camino Avenue, Suite 1231
    Sacramento, CA 95833

 

Application Package Download

Complete Application Package
Loan Insurance Approval Process Instructions
Loan Insurance Application
Exhibit A – Financial Feasibility Guidelines and Certification
Exhibit B – Estimate of Cost and Requisition (OSH-CM-134)
Exhibit C – Declaration of Official Intent

Form resolution for those borrowers that intend to be reimbursed for certain expenditures from the proceeds of the indebtedness.

Exhibit D – Environmental Document Review Process and Forms
Exhibit E – Medi-Cal Questionnaire
Exhibit F – Legal Status Questionnaire
Exhibit G – Disclosure Information Questionnaire 
Exhibit H – California Health Facilities Financing Authority (CHFFA) Application Requirements

Fees & Charges

Application Fee

$500

Insurance Premium Schedule

3% or less of Total Principal and Interest

Certification and Inspection Fee

0.4% of Principal Loan Amount

Other Fees
Phase 1 Environmental Document Review Process and Forms 

$1,500 minimum fee

State Treasurer’s Office Fee
Pre-pricing and Pricing fee structure
  • Flat fee of $3,000 for sales up to $5 million.
  • Flat fee of $4,000 for sales greater than $5 million and up to $40 million.
  • Flat fee of $6,000 for sales greater than $40 million and up to $100 million.
  • Flat fee of $8,000 for sales greater than $100 million
Pricing Agent Counsel fee structure
  • Flat fee of $3,500 for sales up to $5 million.
  • Flat fee of $5,000 for sales greater than $5 million and up to $40 million.
  • Flat fee of $7,500 for sales greater than $40 million.

Reports

Monthly Report

The Monthly Report includes a listing of loans insured by Cal-Mortgage, and information regarding applications for loan insurance.

2018 Monthly Reports
2017 Monthly Reports

Older monthly reports are available upon request.

Annual Reports to the Legislature

Report 1 – Financial Status of the Program 

Health and Safety Code Section 129045 requires the Office of Statewide Health Planning and Development (OSHPD) to report the financial status of the California Health Facility Construction Loan Insurance Program and its insured portfolio, including the status of all borrowers in each stage of default and the office’s efforts to collect from borrowers that have defaulted on their debt service payments. 

Report 2 – Borrowers’ Compliance with their Community Service Obligations 

Health and Safety Code Section 129075 (c) requires the OSHPD to report the extent of borrowers’ compliance with their community service obligations pursuant to subdivision (j) of Section 129050, Section 129055, and Section 129065.

Older annual reports are available upon request.

Actuarial Study

The California Health Facility Construction Loan Insurance Program (the Program) was authorized by a voter initiative in 1968. Modeled after federal home mortgage programs, the Program makes it possible for nonprofit and public owned healthcare facilities to obtain private financing, without cost to taxpayers, to develop or expand their services in communities throughout California. Without such a guarantee, many of these facilities simply could not arrange the financing required to serve their communities. 

Under the administration of the Office of Statewide Health Planning and Development (OSHPD), the Program insures loans to nonprofit and public health facilities for construction projects that improve access to needed healthcare. OSHPD can insure loans to nonprofit public benefit corporations or public entities (cities, counties, hospital districts, or joint power authorities) in which the State of California guarantees the payments of principal and interest on the loans. The loan insurance allows borrowers access to lower interest rates. 

The California Health Facility Construction Loan Insurance Law (the Insurance Law) established the Health Facility Construction Loan Insurance Fund, which is used as a depository of fees and insurance premiums and maybe used to pay administrative costs of the Program and shortfalls resulting from defaults by insured borrowers. 

Section 129330 of the Insurance Law requires that Cal-Mortgage obtain, in each even numbered year, an actuarial study to determine the reserve sufficiency of funds. The purpose of the study is to examine the portfolio of existing insured loans and provide an estimate of reserve funds necessary to respond adequately to potential foreseeable risks, including extraordinary administrative expenses and actual defaults.

Older actuarial reports available upon request.

State Plan

The Cal-Mortgage State Plan describes the policy priorities of the California Health Facility Construction Loan Insurance Program, and guides the operation of the Program on a non-regulatory basis. It also includes the guiding principals, goals and objectives of the program. The State Plan is published in odd numbered years.


Advisory Loan Insurance Committee

The Advisory Loan Insurance Committee (ALIC) is a nine member citizen advisory committee to the program. The Director of Finance appoints one member. The remaining eight are appointed by, and serve at the pleasure of the Director of OSHPD. Of these eight, one is from state government. The remaining seven members represent various public sectors. The ALIC:

  • Reviews loan insurance applications that have been recommended for approval by Cal-Mortgage.
  • Recommends to the Director whether an application should be approved, and whether conditions should be attached to that approval.
  • Assists the Director in formulating policy concerning financial analysis, management, operation, construction, improvement, and expansion of health facilities.
Committee Members
  • David Kears, Chairman
    Special Assistant
    Alameda County Health Care Services Agency
    Alameda
  • Jay Harris, Vice Chair
    Healthcare Strategy & Business Development Consultant
    San Francisco
  • Jonathon Andrus
    CEO, Fairchild Medical Center
    Yreka
  • Derik Ghookasian
    COO, Ararat Home of Los Angeles
    Mission Hills
  • Fredric J. Prager
    Investment Banker, Managing Director
    San Francisco
  • Diana Scaturro
    Supervisor, Office of Statewide Health Planning and Development
    Sacramento
  • Soyla Reyna-Griffin
    CEO, Valley Health Team
    Fresno
  • John Woodward
    CEO, Front Porch Communities
    Glendale
  • Designee
    Department of Finance
    Sacramento

Public Meetings

The ALIC public meeting schedule can be found on OSHPD Public Meetings.

The Notice and Agenda for the next meeting is posted approximately 10 days prior to the ALIC Meeting on the Public Meetings page. If any special accommodations are needed, such as TTY, sign language, etc. please contact us at (916) 319-8828. Requests should be made at least 5 days before scheduled meetings.

Additional information regarding future Notices and Agendas may be obtained by email, or calling (916) 319-8800.


Featured Projects and Testimonials

FEATURED PROJECTS

Exterior photo of the Asian Community Center of Sacramento Valley

July 26, 2018 insured $26,915,000 of California Municipal Finance Authority Insured Revenue Bonds. The Series 2018 insured bonds have a final maturity of 4/1/2048 and an All-In True Interest Cost of 4.17%. The proceeds of the bonds will be used to construct the ACC Senior Services Maple Tree Court Assisted Living and Memory Care Center, an approximately 64,082 square foot facility with 72 assisted living units and 30 memory care living units, in Sacramento.


Rendering of Viamonte at Walnut Creek

May 24, 2018 insured $187,230,000 of California Statewide Development Authority Bonds, for Viamonte Senior Living, a non-profit public benefit corporation. The 2018 Bonds will finance the construction of a new state of the art 191 unit multi-level continuing care retirement community in Walnut Creek. By utilizing both short-term entry fee bonds, and traditional 30-year maturities the project was able to secure financing with an All-In True Interest Cost of 4.11%.


Exterior photo of the Casa de las Campanas multi level senior living facility in Rancho Bernardo

August 24, 2017 insured $39,000,000 of California Enterprise Development Authority Insured Revenue Bonds, Series 2017, for Casa de las Campanas in Rancho Bernardo. The 2017 Bonds will finance the construction of a new state of the art 72 bed skilled nursing facility. Casa de las Campanas is a non-profit corporation that owns and operates a life care multi-level continuing care retirement community just outside of San Diego, and has an investment grade credit rating of A-. The 2017 Insured Bonds are a direct placement with City National Bank. Under the draw down bond structure during the 18-month construction period, the interest rate will be variable. Once construction of the new skilled nursing facility is completed, the interest rate on the bonds will lock at an estimated rate of 2.63%. The Bonds mature in September 2022.


Exterior photo of the St. Johns clinic facility in Los Angeles

July 12 2017 insured a California Municipal Finance Authority Insured Refunding Revenue Bond, Series 2017 with a par amount of $5,250,000 for St. John’s Well Child, located in Los Angeles. St. John’s is a nonprofit 501(c)(3) Federally Qualified Health Center (FQHC) which provides the most comprehensive adult and pediatric primary care services, including medical, dental, behavioral health, homeless health, AIDS/Hepatitis C, transgender, as well as ancillary services, in Los Angeles. In 2016, the Corporation provided needed medical, dental, and behavioral health services to over 64,583 patients with approximately 270,389 patient visits in South Los Angeles. The refunded Bonds mature on December 1, 2041 and were priced with an All-In True Interest Cost of 3.75%. The refunded Bonds had a net present value savings of $541,540.67 or, 11.02 percent.


Exterior photo of the Institute on Aging facility in San Francisco

May 31, 2017 insured California Municipal Finance Authority Insured Revenue Refunding Bonds Series 2017 in the amount of $34,355,000 for the Institute on Aging (IOA). IOA is a San Francisco, CA-based non-profit dedicated to preserving the dignity, independence, and well-being of aging adults and people living with disabilities. The financing was used to refinance existing insured 2008 bonds, which had been used to construct a mixed-use affordable senior apartment building with onsite senior health service facility. The bond structure matures in August 2038, and priced with an All-In True Interest Cost of 3.92%. The refinance will save IOA over $4 million in debt service payments, and the net present value savings is 11.8%.


Exterior photo of the Channing House Facility in Palo Alto

April 18, 2017 insured Revenue Refunding Bonds Series 2017A for $54,045,000 for Channing House, a Continuing Care Retirement Community, located in Palo Alto. The financing was used to refinance existing insured 2010 bonds, which had been used to construct a Health Center with 27 Assisted Living beds and a 26-bed Skilled Nursing Facility and to add an additional 14 Independent Living Units to the residential tower. Channing House now has 191 Independent Living units. The bond structure matures on May 15, 2040 and was priced with an All-In True Interest Cost of 4.04%. The net present value savings was 9.4%.


Exterior view of So Cal Dev Corp VOA building

March 15, 2017 insured California Municipal Finance Authority Insured Refunding Revenue Bonds Series 2017 for $4,700,000 for Southern California Development Corporation of VOA, Inc. The financing advance refunded the 2011 insured bonds and repaid an insured bank loan from California Bank and Trust. The bonds mature on December 1, 2036, and was priced with an All-In True Interest Cost of 4.09%. The net present value savings was 8.76%.


Exterior view of Paradise Valley Estates

On November 30, 2016 insured $22,080,000 of California Municipal Finance Authority Insured Refunding Revenue Bonds, Series 2016, for Paradise Valley Estates, which financed the completion of 18 private memory care rooms, reimburse project expenditures related to the construction of a parking structure, and to refinance its Series 2005 Bonds outstanding. Paradise Valley Estates was formed in 1992 as a non-profit corporation to develop a retirement community in Northern California for retired military officers, their spouses, widows and widowers. The refunded bonds mature in 2047 and the All-In Total-Interest-Cost is 4.53%. The Corporation realized a Net Present Value interest savings of $669,945, or 7.6%.


Exterior view of Pilgrim Place

On November 30, 2016 insured $36,055,000 of California Municipal Finance Authority Insured Refunding Revenue Bonds, Series 2016A, for Pilgrim Place in Claremont, which financed $9 million dollars in capital improvements, in addition to advance refunding its Series 2009 Bonds outstanding. Pilgrim Pace is a non-profit corporation that owns and operates a multi-level continuing care retirement community in Southern California. The bonds mature in 2046 and the All-In Total-Interest-Cost is 4.46%. The Corporation realized a Net Present Value interest savings of $1,561,653, or 6.35%.


Project rendering of San Francisco Jewish

On November 29, 2016 insured the California Statewide Communities Development Authority Revenue Bonds of Jewish Home of San Francisco in the amount of $135,920,000. The Corporation is a leading provider of skilled nursing services and has been serving the most medically and cognitively frail seniors in San Francisco since 1871. The bond proceeds will be used for the construction of two new buildings to be licensed as Residential Care Facilities for the Elderly and improvements of other buildings on campus. The final maturity of the bonds is November 1, 2046 and the All-In True Interest Cost is 4.42%.


Exterior photo of the Hill Country Community Clinic_Round Mountain

November 3, 2016 insured California Municipal Finance Authority Refunding Revenue Bonds Series 2016 in the amount of $4,055,000 for Hill County Community Clinic. The clinic is a Federally Qualified Health Center located in the Shasta County, and provides primary care services to over 5,000 patients in the region. The financing was used to refinance existing bonds. The bond structure matures on November 1, 2037 and was priced with an All-In True Interest Cost of 3.46%. The net present value savings was 8.37%.


Exterior view of Mountain Shadows Support Group

October 27, 2016 insured California Statewide Communities Development Authority Insured Health Facilities Revenue Bonds Series 2016A for $10,350,000 and Taxable Insured Revenue Bonds, Series 2016 A-T for $2,890,000 for Mountain Shadows Support Group. The financing was used to pay off existing bonds and term loans and will be used to upgrade existing facilities housing developmentally disabled clients. The bond structure matures on January 1, 2041 and was priced with an All-In True Interest Cost of 3.71%. The net present value savings was 12.8%.


Exterior view of Petaluma Health Center clinic

September 13, 2016 insured $5,775,000 of California Municipal Finance Authority Insured Refunding Revenue Bonds, Series 2016, for Petaluma Health Center, Inc., which refinanced an existing insured loan. Petaluma Health Center, Inc. is a 501(c)3 non-profit Federally Qualified Health Center that provides comprehensive primary care at two community health centers in Petaluma and Rohnert Park. Services are also offered at three school based clinics. The refunded bonds mature in 2040 and the All-In Total-Interest-Cost is 3.14%. The Corporation realized a Net Present Value interest savings of $1.064 million, or 19%.


Exterior view of Santa Rosa Community Health Center

July 12, 2016 insured $11,105,000 of California Municipal Finance Authority Insured Refunding Revenue Bonds, Series 2016, for Santa Rosa Community Health Centers, which refinanced an existing insured loan. Santa Rosa Community Health Centers is a 501(c)3 non-profit Federally Qualified Health Center that provides comprehensive primary care and specialty care in Santa Rosa, California. Services are provided at nine locations in Santa Rosa with approximately 220,000 total annual patient visits. The refunding bonds mature on February 1, 2034, and priced with an All-In True Interest Cost of 2.89%. The refinancing generated a 31.9% net present value savings over the life of the loan.


Other Cal-Mortgage Insured Projects


Testimonials