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California Health Facilities Financing

Healthcare Expansion Loan Program II (HELP II)
Frequently Asked Questions (FAQ)

FAQ Index

 

Security Provisions

Is a credit rating or a letter of credit required?

No.

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Is a gross revenue pledge required to secure a CHFFA loan?

A gross revenue pledge is required.  CHFFA will file a UCC-1 Financing Statement for public record with the Secretary of State to secure the gross revenue pledge.

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What type of security is required?

For equipment loans, CHFFA will file a UCC-1 Financing Statement on the equipment financed with the loan and for the gross revenue pledge. For real property loans, CHFFA will file a deed of trust on the real property used to secure the loan (CHFFA requires first lien on property) and a UCC-1 Financing Statement for the gross revenue pledge. CHFFA may impose other security requirements depending on the facts and circumstances of the transaction.  

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Does CHFFA have a maximum loan to value ratio?

A maximum loan-to-value ratio of 95% is required for real estate and equipment loans. CHFFA may impose a lower loan-to-value ratio depending on the facts and circumstances of the transaction.

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What types of appraisals will CHFFA accept?

CHFFA accepts commercial and residential appraisals.

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When does CHFFA require completion of an appraisal?

An appraisal is required before closing and may be completed up to six months prior to the closing date of the loan.  

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Will CHFFA take a second lien position?

Generally, CHFFA requires the first lien position. Under certain circumstances CHFFA may take another lien position.  Please contact CHFFA staff at (916) 653-2799 to discuss further.

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Is a Preliminary Title Report required for real property?

Yes, a Preliminary Title Report is required with the loan application to ensure the real property has clear title.

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