This article was downloaded by: [FU Berlin]On: 05 November 2014, At: 03:13Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number:1072954 Registered office: Mortimer House, 37-41 Mortimer Street,London W1T 3JH, UK

Journal of Housing For theElderlyPublication details, including instructions forauthors and subscription information:http://www.tandfonline.com/loi/wjhe20

Housing for the ElderlyFinancing OptionsMary Ellen K. Early aa Director of Public Policy, Florida Associationof Homes for the AgingPublished online: 18 Oct 2008.

To cite this article: Mary Ellen K. Early (1989) Housing for the Elderly FinancingOptions, Journal of Housing For the Elderly, 5:1, 51-66, DOI: 10.1300/J081V05N01_05

To link to this article: http://dx.doi.org/10.1300/J081V05N01_05

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Chapter 4

Housing for the Elderly Financing options

Mary Ellen K. Early

INTROD UCTZON

Persons aged 65 and older are the fastest growing segment of the U.S. population. Demographers predict that the growth rate of older persons, most notably those over the age of 74, will continue to accelerate well into the 21st century. As the number of older persons increases, the demand for housing with specialized physical plant requirements, amenities and services will also escalate. The ability of developers to meet that demand is dependent, to a large exrent, on the availability of affordable financing.'

The article reviews the major financing options currently avail- able to sponsors of housing for the elderly. The reader is cautioned that federal budget cuts and changes in U.S. tax laws may eliminate or curtail certain types of financing mechanisms that are widely used by both non-profit and proprietary sponsors and developers of housing for the elderly.

OVERMEW OF FINANCING OPTIONS .AND CONSIDERATIONS

Financing options available to sponsors of housing for the elderly include:

Mary Ellen K. Early is Director of Public Policy for the Florida Association of Homes for the Aging.

O 1989 by The Haworth Press, Inc. All rights reserved. 51

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52 L I F E S M E S AND HOUSING OF OLDER ADULTS

0 Direct federal financing through the U.S. Department of Housing and Urban Development Federal Housing Authority ( H W ; Federally insured mortgages; Loans financed with tax-exempt or taxable bonds; Conventional mortgages; Syndications or limited partnerships; and A combination of financing mechanisms tailored to the proj- ect.'

Since borrowing costs have a significant impact on the financial feasibility of a project, a prudent sponsor will evaluate all financing options during the initial stages of project development. The evalu- ation is based on total financing costs including the price of obtain- ing capital such as points, issuer fees, investment or mortgage banker fees and other related expenses. Computations resulting from a careful analysis should enable the sponsor to estimate rents or monthly fees that are required to service the debt on a mortgage and to determine whether or not the project can be marketed com- petitively at those rates.

An assessment of financing options must be made by one who understands available alternatives and any related covenants, re- strictions, or security requirements. If the sponsor has limited expe- rience with project development, he is wise to seek advice from knowledgeable sponsors of similar projects, development consul- tants, mortgage or investment bankers, and so on. Trade groups such as The American Association of Homes for the Aging are also available to provide consultation on capital formation. The money and time spent on front-end planning can result in savings that make the difference between a successful project and one that is not finan- cially feasible.

FEDERAL HOUSING AUTHORITY DIRECT LOANS

Section 202 is the primary federal program which provides per- manent financing for the construction or substantial rehabilitation of residential projects developed specifically for elderly and handi- capped persons. Mortgage loans, currently issued at the below mar- ket interest rate of 9.25% and amortized over 40years, are available

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Mary Ellen K. Early 53

to non-profit sponsors and consumer cooperatives. The total devel- opment costs of the project are included in the loan; however, HUD may require that the sponsor deposit a specified amount of cash in an escrow account as an assurance of commitment to the project.'

Although Section 202 projects were originally intended for low to moderate income families, current regulations mandate that 95% of the tenants have household incomes below 50% of the area mean income. The tenant pays up to 30% of his adjusted family income for rent, while HUD contributes the remainder in Section 8 housing assistance payments which are available to virtually all residents of Section 202 financed housing. Individual waivers must be obtained for each tenant whose household income exceeds the standard es- tablished by C ~ n g r e s s . ~

The major limitations associated with the Section 202 program are: (1) the lengthy processing time of applications (18 months); (2) restrictions on sponsorship (non-profit only), construction costs and amenities; and (3) continued HUD involvement in the project for the life of the mortgage loan, including approval of all rent in- creases. In addition, applicants take the risk of committing time and resources for funds that are very limited but in great demand.

The chart which follows displays Section 202 appropriations from 1982 through 1986. The number of units authorized for 1986 is 22.7% less than the level approved five years ago. The program could be diluted further in 1986 and annually thereafter, if Congress and the Administration fail to reach an accord on reducing the fed- eral deficit, as prescribed by the "Gramm-Rudman" amendment. Failure to meet budget targets would trigger automatic reductions in most federal programs, including Section 202. Advocates for the elderly fear that the Section 202 program may be severely reduced in FY 1986-87, thereby creating a hardship for non-profit sponsors

Section 202 Appropriations 5

1981 1982 1983 1984 - - 1 9 8 6 1 9 8 5 - Loan authority

in millions $ 687 $ 716 $ 634 $ 6 6 6 $ 600 $ 600

Units 14470 15525 14000 14000 12000 12000

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54 LIFESTYZES AND HOUSING OF OLDER ADULTS

who depend on federal financing for the development and construc- tion of housing for the elderly.

FEDERAL MORTGAGE INSURANCE

As the term implies, federal mortgage insurance is not a direct loan but rather a guarantee which protects the lender or mortgagee against default on a loan. Consequently, a borrower with mortgage insurance is at an advantage when negotiating fixed rate, long term loans or bond financing.

Of the more than 40 mortgage insurance programs sponsored by the Federal Housing Authority, those of greatest significance to the elderly include Sections 221(d)(3) and (d)(4) for multifamily rental housing and retirement service centers, and Section 232 which in- sures mortgages for nursing homes, intermediate care facilities, and board and care homes. Though still authorized by Congress, Sec- tions 231 and 207 insurance for multifamily housing have been pre- empted by Sections 221(d)(3) and (d)(4), largely because of their higher lending limits and the cash rather than debenture payments made to the mortgagee in the event of defauk6

The number of FHA insured mortgages which may be approved each year is authorized by Congress. The authorization levels set to date have been sufficient to accommodate qualifying projects.'

Sections 221 (d)(3) and (d)(4)

Sections 221(d)(3) and (d)(4) were authorized by Congress to promote the construction, rehabilitation, or purchase and rehabilita- tion of affordable multifamily rental housing for low and moderate income families. Although not limited to housing for the elderly, the two mortgage insurance programs are available to sponsors of housing designed specifically for persons aged 62 and older who are able to live independently. Construction may be detached, semi- detached, walk-up or elevator and must consist of five or more units.

Section 221(d)(3), available to non-profit, cooperative and lim- ited divident sponsors, provides insurance for up to 100% of a mort- gage amortized over 40 years. Since rent subsidies are not awarded

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Maty Ellen K Early 55

to projects insured under the program, Section 221 (d)(3) has not been widely used in recent years.8

Section 221(d)(4) insurance, originally authorized for proprietary sponsors but now used by non-profits as well, provides mortgage insurance for up to 90% of the replacement cost of a multifamily housing project for the life of the loan (up to 40 years). The insur- ance is commonly used as a credit enhancement with tax exempt bond financing.'

In 1983, the scope of Section 221(d)(4) was expanded to include retirement service centers. As with other multifamily housing in- sured under the program, retirement service centers are limited to tenants who pay market rate rents. As amended, however, Section 221 (d)(4) provides insurance for projects which fall between inde- pendent living and nursing home care. The primary market for re- tirement service centers is persons 70 years of age and older who are no longer capable or desirous of preparing their own meals.

While direct medical care is not permissible, retirement service centers normally offer a service package consisting of meals, housekeeping, transportation, 24-hour security coverage, and other amenities. Although all residential units must include a full kitchen or kitchenette, with approval, a small number of infirmary rooms may be incorporated into the project design to temporarily accom- modate residents who are ill.

As part of the application process for Sections 221 (d)(3) and (d)(4) insurance, HUD requires substantial information, including a market study. Through the study, the applicant must demonstrate a knowledge of competing projects and identify a target market for whom the proposed project is appealing and affordable. In addition, applicants for retirement service centers must demonstrate an un- derstanding of the risks of developing specialized housing with sup- port services, the limited market and potential demand for the proj- ect, and the relatively high expense of providing shelter and services to elderly persons who require regular assistance in order to maintain their independence.

Sponsors of Sections 221(d)(3) and (d)(4) projects must maintain a 2% working capital reserve, and depending on the project, may be required to maintain an operating deficit escrow account of a speci- fied amount to cover revenue short-falls."' In addition, sponsors of

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56 LIFES7YL,ES AND HOUSING O F OLDER ADULTS

retirement service centers must establish a debt service reserve equal to six months' debt service," These financial safeguards are required because of the limited market for such programs, delays in initial rent up and industry experience.

Section 232

Section 232, an FHA mortgage insurance program enacted in 1959, was designed to promote the construction and rehabilitation of nursing homes and intermediate care facilities. The scope of the program was later expanded through the Housing and Urban Recov- ery Act of 1983 to include board and care homes. The purpose of the change was to facilitate the financing of alternative housing ar- rangements for elderly and handicapped persons who need continu- ous "protective oversight" and assistance with activities of daily living rather than nursing care. The expanded provisions took effect on October 25, 1985 after MUD published final rules in the October 16, 1985 Federal Register."

The Section 232 mortgage insurance, which is open to both non- profit and proprietary sponsors, may be used to construct or rehabil- itate nursing homes, intermediate care facilities, board and care homes. The project may be connected with a private retirement complex or existing HUD housing but must have a separately in- sured mortgage. Section 232 may also be used to insure a loan obtained specifically to bring an existing facility into compliance with state imposed fire-safety standards as well as to purchase cer- tain types of fire-safety equipment which are not mandatory.

HUD does not set bed rates for Section 232 projects. The Depart- ment may adjust the applicant's proposed rates, however, to what market research indicates are obtainable rates in the primary service area. The adjusted rates are used only to assess the project's finan- cial feasibility. Based on these rates, the acceptability of the project site and the proposed number of beds, HUD will approve, deny or reduce the insurable mortgage amount to a sum that can be sup- ported by income from the project."

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Mary Ellen K. Early 57

mL4 Review and Approval Process for Insured Mortgages

The approval process for FHA insured mortgage applications is divided into three stages. The first, known as the site appraisal and market analysis (SAMA), includes a review of the sponsor's appli- cation and market study, an HUD appraisal of the site, and an HUD conducted market study to verify the feasibility of the project. Un- der optimum conditions, the initial review is completed in 45 days. The second stage or conditional commitment involves a review of preliminary plans and specifications, an assessment of the financial stability of the sponsor, and a cost analysis of the project based on similar facilities in the market area. If no revisions are required, the second stage is completed and a conditional commitment is issued in 60 days. The third and final stage, known as the firm commit- ment, also takes a minimum of 60 days. It includes a review of the final plans and specifications, contracts, and project costs.'"

Because of revisions and negotiations that normally occur be- tween the sponsor and HUD, it is not unusual for a review to take a year from submission of the SAMA application to the date of initial closing. Sponsors and mortgagees who have experience with the HUD application process may skip one or more stages if HUD is agreeable. The use of an FHA approved coinsurer (usually a mort- gage banker) who has the authority to review and approve FHA insured mortgage applications may also expedite the process."

The application review is thorough because of the liability under- taken by the federal government when it insures a mortgage. As a result a high percentage of applications are either denied or with- drawn during each review stage.

Application and Review Fees

The fees associated with FHA insured mortgages are substantial. They include:

An examination fee of $1 per $1,000 of loan amount for each of the first three approval stages; An inspection fee of no more than $5 per $1,000 of loan amount for architectural review and supervision; and

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An FHA mortgage insurance premium of 5% paid annually thioughout the life of the loan on the principal balance.'"

In order to avoid costly mistakes when applying for an FHA in- sured mortgage, it is advisable to meet with staff in the regional HUD office before completing the application to discuss the pro- posed project and site. The HUD representative may offer revealing information about the location, area occupancy rates for similar projects which would adversely affect the financial feasibility of the proposed project, as well as the denial rate for similar projects in the same market area and the reasons for denial. Information obtained during the meeting could be used to modify the proposed project, select an alternative location, and assess the chances of securing FHA insurance.

Once an FHA insured housing project is constructed, HUD moni- tors its financial stability and general physical condition. Although the Department does not review or approve monthly charges or rents, the project is prohibited from assessing an entrance fee, ini- tial admission fee or similar charge beyond normal security deposits required by standard rental projects.

Through the issuance of tax-exempt bonds, financing is available for retirement communities, congregate housing, nursing homes, and other residential settings for the elderly. Tax-exempt bond fi- nancing is commody used to expand, renovate, or acquire an exist- ing facility, refinance an existing project, or construct a new facility.

Although tax-exempt bond issues have been used extensively in the past, they are threatened by proposed congressional changes. The pending revisions could undermine a major source of financing for multifamily and congregate housing projects by greatly restrict- ing the use of tax-exempt bonds for both proprietary and non-profit developers. At this time, bond attorneys are reluctant to give a legal opinion on the continued use of tax-exempt bonds under the pend-

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Mary Ellen K. Early 59

ing federal legislation which is part of the major tax changes sup- ported by the Administration."

Tax-exempi bond financing is more than an alternative to con- ventional financing. The advantage of using tax-free bonds is dem- onstrated by the favorable financing terms that can be obtained as well as the minimal equity contribution required of the sponsor.

The following are a few of the advantages afforded sponsors us- ing tax-exempt bond financing:

Under certain conditions, 100% financing of all related con- struction, equipment and financing costs; Permanent long term financing at favorable tax-exempt inter- est rates (generally below-prime) for a term of 25 to 40 years;' Funding of all site and development costs associated with the project; Option to prepay the loan; and Debt amortization schedules tailored to meet the cash flow requirements of the project.Is

Bonds may be rated or unrated. A bond rating is an indication of the project's or guarantor's credit worthiness and the probability of timely repayment of interest and principal. Sponsors of housing for the elderly who have the experience and credit enhancement to ob- tain a bond rating are generally able to secure a loan at the lowest possible rates. Even with an unrated bond issue, however, the bor- rower is usually able to obtain interest rates that are below borrow- ing costs on a conventional mortgage. Any credit enhancement or equity position strengthens a bond issue and may be used as a vehi- cle to further reduce borrowing costs. Examples of credit enhance- ments include letters of credit, pledge of revenues, security pledged by a third party, mortgage insurance, and bond insurance.

Tax-exempt bonds are issued through various state and local au- thorities authorized by state statute. The types of projects that are eligible for bonds may differ from authority to authority; thus, it is important to understand any local restrictions which may preclude the use of tax-exempt bonds for a proposed project.

For developers or organizations who are interested in pursuing tax-exempt financing, research should begin by contacting the local

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60 LIFES'IYLES AND HOUSING OF OLDER ADULTS

bond authority for information about the types of projects eligible for tax-exempt bonds and guidelines for submitting an application. An attorney, accountant, investment banker, or financial consultant experienced with bond issues for similar types of projects should then be selected to assist with the application process. The choice of a consultant should be based on the history of projccts with which he has been involved, including success in achieving marketing goals and meeting debt service requirements.

'Because of the time that is needed to plan and design the project, explore credit enhancements, conduct feasibility and market stud- ies, obtain local and state approvals, prepare official statements for investors, and so on, sponsors should estimate 24 months lead time from site selection to the closing on a bond issue. The amount of consultant's time devoted to the project during that period and re- sulting up-front fees can negate or offset the financial benefits of using tax-exempt bond financing. Typically, the feasibility of pur- suing tax-exempt bonds increases with the size of a project. Spon- sors of projects costing less than $2 million may find that another method of financing is more practical and f~asible.'~

TAXABLE FINANCING OPTIONS

Because of pending changes in the tax laws which threaten future uses of tax-exempt financing, taxable bond issues may become a more widely used financing alternative for multifamily, congregate, and other types of housing for the elderly. As with non-taxable bonds, financing terms will vary depending on market interest rates, credit enhancements, the financial feasibility and credit wor- thiness of the project, and the experience of the sponsor. Assuming market conditions are favorable and the project is feasible, taxable bonds may be amortized over 15 to 20 years at interest rates that are below those available from a conventional lender. Conversely, when the prime interest rate is unusually high and long term financ- ing is prohibitively expensive or unavailable, short term taxable bonds with fixed or variable intercst rates may be used to finance a project. Although the short term use of bonds may prove beneficial in securing affordable financing, the sponsor is placed in the posi-

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M a y Ellen K. Early 61

tion of having to identify another source of financing, possibly with higher borrowing costs, when the bonds m a t ~ r e . ~

Taxable bonds may be issued by the sponsor or through a sepa- rate corporation established to protect the bondholders against lia- bility in the event of bankruptcy. Proprietary organizations or de- velopers who issue taxable bonds must register and file annual reports with the Securities and Exchange Commission.

'Advice on taxable bonds can best be obtained from an investment banker who is familiar with the bond market.

CONVENTIONAL LOANS

Both construction and permanent loans are available through conventional lenders. Typically, interest rates are lower for bond financing; however, depending on the total cost of the project, con- ventional financing may be more cost effective when the financing, consulting and legal fees of a bond issue are taken into consider- ation. Generally, conventional financing is preferable for smaller projects because the sizeable fixed fees associated with a bond issue offset the benefits of a lower interest rate.

The willingness of a financial institution to approve a conven- tional loan is dependent on the credit worthiness of a project. For construction loans, the lender evaluates the abilities and experience of the contractor, architect and sponsor as well as the reasonable- ness of project costs and the time frame for project completion. Construction loans usually cover 75% to 80% of capital and start-up costs. The sponsor contributes the remainder in cash or through limited partnerships. Applications for permanent financing are eval- uated based on pre-construction rent-up, occupancy rates of similar projects in the market area, the potential market, financial projec- tions which indicate that revenues from rents or fees will be suffi- cient to meet the debt service requirement and deliver the amenities promised, and the value of the property on resale in the event of default. Depending on the project, the loan typically covers 80% to 90% of the costs of the project; the sponsor finances the remain- der .2'

As with any type of financing, the terms of a conventional loan

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will vary with market conditions, the relationship of the sponsor with the lender, the risks of the project, securities offered on the loan, and covenants and regulations governing the operation of the project. In addition, a mortgage insured by FHA against default may enable the sponsor to negotiate better borrowing terms from a conventional lender.

A number of accounting and consulting firms, including mort- gage bankers, prepare applications for conventional financing. The application process is relatively simple and does not include the costly feasibility or market studies required for other types of fi- nancing. Another advantage is that conventional mortgages can be approved in 2 to 4 months.

Syndication is a method of structuring investor participation in real estate ownership while simultaneously creating a source of eq- uity for a project. Through syndication, tax incentives attract inves- tor capital if the investment yields competitive returns.

Typically, syndication is used by sponsors or developers who need additional cash to finance a project. Limited partners in a syn- dication have minimal liability and responsibility. Conversely, the general partner, usually the sponsor or syndicator, is responsible for project management and all liabilities of the partnership.

Syndication is more commonly used in a proprietary rather than non-profit venture because of the tax exempt status of non-profit sponsors. Nonetheless, if a non-profit sponsor lacks sufficient capi- tal for a project, an agreement can be executed with a proprietary partnership for the purpose of syndication. The proprietary partner- ship would own the project but agree to lease i t to the non-profit entity for a specified period of time. Such agreements usually pro- vide the non-profit entity with the right to acquire ownership at a later date (right of first refusal).

Syndications are extremely complex transactions which necessi- tate the involvement of an experienced attorney and accountant. Consequently, the costs of structuring a syndication may be sub- stantial.

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Mary Elkn K Early 63

THE FUTURE O F HOUSING FOR THE ELDERLY

One of the major barriers to future development of housing for the elderly is construction costs. With the decrease in FHA low interest mortgage loans and corresponding federal rent subsidies for low income elderly tenants, it is becoming increasingly more diffi- cult to develop housing for the elderly at a cost that anyone but the more affluent can afford. Consequently, the market for newly con- structed housing projects is dwindling because a majority of elderly persons do not have sufficient incomes to pay the monthly rent and fees required to ensure the financial success of a project.

The recent financial failure of a few newly constructed retirement communities is another potential problem. Even though the suc- cessful housing projects far outnumber the failures, lenders are less likely to approve financing for projects that are perceived as risky because of their limited market and single purpose use. Financially troubled retirement communities tend to reinforce the lenders' ap- prehension about the financial feasibility of specialized projects and discourage loan approvals for all but the most experienced sponsors or developers. Therefore, it is important to the reputation and future of the industry that existing and planned housing for the elderly have sufficient cash flow and liquid reserves to meet debt service payments and deliver the amenities and services promised to resi- dents.

The third, and perhaps most pressing problem, is the potential erosion of tax-exempt bond financing, the most frequently used type of financing for housing for the elderly in recent years. In response to pending changes in the tax laws which could severely restrict the future use of tax-exempt bonds, investment bankers are exploring other financing alternatives. The financing options that they and other consultants are likely to promote will probably in- clude taxable bonds, conventional mortgages and Government Na- tional Mortgage Association (GNMA) taxable securities coupled with federal and private mortgage insurance, syndication and other types of credit enhancements.

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LIFESTYLES AND HOUSING OF OLDER ADULTS

SUMMARY

Housing for the elderly is financed predominantly with low inter- est FHA loans, conventional mortgages, and tax-exempt and tax- able bonds. When used in conjunction with mortgage insurance and other types of credit enhancement that protect the lender against default, long term financing is generally available at below-market interest rates. The feasibility of using one type of financing over another must be based on the unique characteristics of each project, credit market conditions, and the resources of the sponsor. A care- ful analysis of financing options and costs should be an integral component of the planning phase since monthly rents and fees must be calculated to meet the debt service requirements for the project. The fee structure, in turn, has a direct relationship to the market- ability of the project and its financial feasibility."

The financing options available to sponsors of housing for the elderly may be altered significantly by pending federal budget re- ductions and changes in tax laws. Consequently, sponsors of hous- ing for the elderly will be challenged to seek out creative financing options and to invest more of their own resources in projects. As they move away from traditional sources of capital financing, the involvement of the investment banker, attorney, accountant, and other consultants will become more essential. The experienced sponsor or developer with a proven track record and good rclation- ship with a financial institution will have a competitive advantage in the marketplace.

REFERENCES

1 . U.S. Senate Special Committee on Aging in conjunction with [he Ameri- can Associalion of Retired Persons. Aging America Trends and Projecrionr, Washington, D.C., 1984.

2. American Association of Homes for the Aging. Obtaining Capital for Housing and Services for the Elderly, Washington, D.C., 1984, pp. 13-21.

3. U.S. Senale Special Committee on Aging. Developments in Aging: 1984, Washington, D.C., February 28, 1985, p. 218.

4. American Association of Homes for the Aging. Provider News, Volume 3, NO. 23, Washington, D.C., December 27, 1985, p. 5.

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Mary Ellen K Early 65

5. American Association of Homes for the Aging. "Information Sheet Ad- ministration's FY86 Housing Cuts," Washington, D.C., February 5, 1985.

6 . Malloy, Joseph E., Chief of Insurance Branch, Dept. of Housing and Urban Development, telephone conversation with author, February 1986.

7. Carr, Jim, Budget Analyst, U.S. Senate Select Committee on Aging, tele- phone conversation with author, February 1986.

8. Malloy, Joseph E., Chief of Insurance Branch, Dept. of Housing and Urban Development, telephone conversation with author, February 1986.

9. U.S. Dept. of Housing and Urban Development, "Section 221(d)(4) Mortgage Insurance for Low-Moderate Income Housing Projects (Market Rate)," Jacksonville Regional Office, Jacksonville, Florida.

10. U.S. Dept. of Housing and Urban Development. "Retirement Service Centers," Notice H83-58, Washington, D.C., December 28, 1983.

11. U.S. Dept. of Housing and Urban Development. "Retirement Service Center Processing," Notice H84-41, Washington, D.C., November 26, 1984.

12. U.S. Dept. of Housing and Urban Development. FederalRegister, Vol- ume 50, No. 179, September 16, 1985.

13. U.S.Dept. of Housing and Urban Development, "Section 232 Board and Care Homes," Draft Notice, Washington, D.C., 1985.

14. Garrison, J., Multi-Family Housing Rep., U.S. Dept. of Housing and Urban Development, telephone conversation with author, February 1986.

15. Hornburg, S., Housing Analyst, American Association of Homes for the Aging, telephone conversation with author, February 1986.

16. Garrison, J . , Multi-Family Housing Rep., U.S. Dept. of Housing and Urban Development, telephone conversation with author, February, 1986.

17. Luzzi, A., Senior Associate, Herbert J. Sims and Co., Inc., New York, New York, telephone conversation with author, February 1986.

18. Reid, B., Executive Vice President, Henderson, Few & Co., Sarasota, Florida, telephone conversation with author, February 1986.

19. Person, D., Real EstateFinance Project Manager, Life Care Services, Inc., Des Moines, Iowa, telephone conversation with author, February 1986.

20. Person, D., Real EstateIFinance Project Manager, Life Care Services, Inc., Des Moines, Iowa, telephone conversation with author, February 1986.

21. Kirker, L., Partner, May Zima & Co., Daytona Beach, Florida, telephone conversation with author, February 1986.

22. Luzzi, A., Senior Associate, Herbert J. Sims & Co., Inc., New York, New York, telephone conversation with author, February 1986.

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