HUD officially approves funding for Cambridge Memorial Hospital

WASHINGTON -- The U.S. Department of Housing and Urban Development today announced a commitment to insure a mortgage loan to Cambridge Memorial Hospital in Cambridge to construct a new 16-bed hospital to replace an existing 51-year-old facility and fund relocation of a primary care clinic to the new facility.

The $18 million loan is made possible through the Federal Housing Administration's Section 242 Hospital Mortgage Insurance Program.

"FHA is helping to build state-of-the-art health care facilities all across the country," said FHA Commissioner David Stevens.

"By lowering the cost of credit, FHA will allow Cambridge Memorial Hospital to use more of its resources to provide quality medical care."

The new construction will replace the current hospital which was built primarily to treat inpatients and is no longer suitable for the hospital's growing outpatient volume. The project includes expanded space for outpatient services, improved obstetrical services, and the development of a common nursing station for centralized management of acute, emergency, and obstetrical services.

The business office, physical therapy, and Cambridge Medical Clinic will be relocated to the new building. The project will improve patient privacy and provide expansion opportunities to accommodate future growth.

By insuring the mortgage loan, FHA is enabling Cambridge Memorial Hospital to obtain lower cost financing, saving the hospital an estimated $9.3 million in interest expense over the life of the loan. Since 2003, HUD has issued commitments to 17 different critical access hospitals all across the United States.

The new construction will enable the hospital to provide services in modern space and to maximize the efficiency of patient care. The primary service area consists of portions of Furnas and Red Willow counties in Southern Nebraska.

The nearest hospital is located 24 miles away.

HUD estimates this construction project will create 370 full-time jobs and provide an estimated economic stimulus of $49.6 million to the community.

Once completed, it is estimated the project will provide an annual economic benefit of approximately $10.7 million and support 63 jobs throughout the 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.