Cal-Mortgage Loan Insurance Program#

Collage of hospital building under construction

About Us

Learn more about Cal-Mortgage and how to contact us

Featured Projects

Most recent bond pricing and interest rates

Reports

Read monthly and annual reports, actuarial studies, and state plans

Fees

Find information on application fees, loan insurance premium schedules, and other fees.

Application

Submit an application for loan insurance on a construction project.

About Us#

The Cal-Mortgage Loan Insurance Program (Cal-Mortgage) administers the California Health Facility Construction Loan Insurance Program (Program). Cal-Mortgage provides credit enhancement for eligible healthcare 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. Cal-Mortgage history and authorizing legislation are detailed here.


Loan Insurance Application Process#

Eligibility#

To be eligible for loan insurance, the borrower must be either a California, nonprofit public benefit corporation or a political subdivision. In addition, it must be organized to own and operate a health facility and assure that its services are, or will be, available to all persons residing in the facility’s service area. Loans may be insured to finance or refinance the construction of new facilities; to acquire existing buildings; to expand, modernize, or renovate existing buildings; or to finance fixed or movable equipment needed to operate the facility. 

Eligibility requirements are detailed in the following legislation:

steps in the process#

The Application includes a Supporting Documents Checklist outlining the complete list of documentation that must be submitted. The Application and documentation are to be completed and submitted electronically through the Application Portal. The Application and Supporting Documents Checklist is available to review in advance of online submission. Please note that all information and documentation submitted are considered public records under the California Public Records Act and are open to inspection and duplication by the public.

  1. Preliminary Review (No fees due at this time): It is encouraged to apply early in the process for a preliminary review to determine eligibility. In this first step, an Application and specific documents are submitted, including audited financial statements, form 990s, articles of incorporation, and bylaws. Upon review, staff will inform the borrower of their eligibility status and provide guidance on how to proceed through the application process. A site visit may be scheduled.
  2. Application Submission and Review: When eligibility is determined, the next step is to submit all documentation outlined in the Supporting Documents Checklist (documentation may be submitted incrementally) and, if applicable, update the Application. A $500 non-refundable application fee is due at this stage. After review of the complete Application and supporting documents, staff will prepare a Project Summary and Feasibility Analysis (PSFA). The PSFA includes a recommendation for the Application with a proposed set of conditions that must be met prior to the issuance of loan insurance. The Cal-Mortgage Deputy Director will determine if the Application should be recommended for review by the Advisory Loan Insurance Committee (Committee). 
  3. Review by the Advisory Loan Insurance Committee: The Application will be scheduled for presentation at a public meeting to the Committee for review. The Committee, composed of healthcare and finance industry experts, provides the Office of Statewide Health Planning and Development (OSHPD) Director with additional analysis and advice with respect to the Application. After deliberation, including input from the borrower, staff, and the public, the Committee will decide whether to recommend the Application for final approval to the OSHPD Director. The final decision and approval to grant loan insurance is at the full discretion of the OSHPD Director.
  4. Issuance of Conditional Loan Insurance Commitment: After the OSHPD Director approves the Application, OSHPD will issue a letter of commitment to insure the loan. This letter of commitment specifies conditions that must be met prior to the pricing and closing of the insured loan transaction. The letter of commitment is valid for approximately six months; and may be extended one time upon request by the borrower. A sample letter of commitment with typical conditions is available for review.

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 the date of the enactment of the State budget.


Fees#


Reports#

Monthly Report#

The Monthly Report includes a list of insured loans and information regarding applications for loan insurance.


Annual Reports to the Legislature#

Report 1 – Financial Status of the Program #

Health and Safety Code, Section 129045 requires Cal-Mortgage to report the financial status of 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 Cal-Mortgage to report the extent of borrowers’ compliance with their community service obligations pursuant to subdivision (j) of Section 129050, Section 129055, and Section 129065.


Actuarial Study#

Health and Safety Code, Section 129330 requires  Cal-Mortgage to 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.


Advisory Loan Insurance Committee#

The Advisory Loan Insurance Committee (Committee) 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 OSHPD Director. Of these eight, one is from state government. The remaining seven members represent various public sectors. The Committee:

  • Reviews loan insurance applications that have been recommended for approval by Cal-Mortgage.
  • Recommends to the OSHPD Director whether an application should be approved, and whether conditions should be attached to that approval.
  • Assists the OSHPD Director in formulating policy concerning financial analysis, management, operation, construction, improvement, and expansion of healthcare 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 ten 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 five 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#

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 for ACC Senior Services. The 2018 Bonds have a final maturity of April 1, 2048 and an All-In True Interest Cost of 4.17%. The proceeds of the bonds will be used to construct the 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 Communities Development Authority Bonds for Viamonte Senior Living. 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 4.18%.


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 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 nonprofit 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 drawdown 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 $5,250,000 of California Municipal Finance Authority Insured Refunding Revenue Bonds for St. John’s Well Child. The refunded bonds mature on December 1, 2041 and were priced with an All-In True Interest Cost of 3.76%. The refinance resulted in a net present value savings of $541,540.67 or, 11.02%.


Exterior photo of the Institute on Aging facility in San Francisco

May 31, 2017 insured $34,355,000 of California Municipal Finance Authority Insured Revenue Refunding Bonds for Institute on Aging (IOA). The financing was used to refinance existing Insured 2008 Bonds, which had been used to construct a mixed-use affordable senior apartment building with an onsite senior health service facility. The 2017 Bonds mature 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, with a net present value savings of 11.8%.


Exterior photo of the Channing House Facility in Palo Alto

April 18, 2017 insured $54,045,000 of California Municipal Finance Authority Insured Revenue Refunding Bonds for Channing House. The financing was used to refinance existing Insured 2010 Bonds, which had been used to construct a Health Center with 27 assisted living beds, 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 2017 Bonds mature 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 $4,700,000 of California Municipal Finance Authority Insured Refunding Revenue Bonds 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 were priced with an All-In True Interest Cost of 4.09%. The refinance resulted in a net present value savings of 8.76%.


Exterior view of Paradise Valley Estates

On November 30, 2016 insured $22,080,000 of California Municipal Finance Authority Insured Revenue Bonds for Paradise Valley Estates. The 2016 Bonds financed the completion of 18 private memory care rooms, reimbursed project expenditures related to the construction of a parking structure, and refinanced its Insured 2005 Bonds. The refunded bonds mature in 2047 and the All-In True Interest Cost is 4.51%. The refinance resulted in a net present value 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 Senior Living Refunding Revenue Bonds for Pilgrim Place in Claremont. The 2016 Bonds financed $9 million dollars in capital improvements, in addition to advance refunding its Insured 2009 Bonds. The bonds mature in 2046 and the All-In True Interest Cost is 4.46%. The refinance resulted in a net present value savings of $1.5 million, or 6.35%.


Project rendering of San Francisco Jewish

November 29, 2016 insured $135,920,000 of California Statewide Communities Development Authority Insured Revenue Bonds for Jewish Home of San Francisco. 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 $4,055,000 of California Municipal Finance Authority Insured Refunding Revenue Bonds for Hill Country Community Clinic. The financing was used to refinance existing bonds. The 2016 Bonds mature 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 $10,350,000 of California Statewide Communities Development Authority Insured Health Facilities Revenue Bonds and $2,890,000 of Taxable Insured Revenue Bonds 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 2016 Bonds mature 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 Health Facilities Financing Authority Insured Refunding Revenue Bonds for Petaluma Health Center. The 2016 Bonds refinanced an existing insured loan. The refunded bonds mature in 2040 and the All-In True Interest Cost is 3.14%. The refinance resulted in net present value interest savings of $1.06 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 for Santa Rosa Community Health Centers. The 2016 Bonds refinanced an existing insured loan. The refunding bonds mature on February 1, 2034 and priced with an All-In True Interest Cost of 2.89%. The refinance resulted in net present value savings of 31.9%.


Other Cal-Mortgage Insured Projects#


Testimonials#