SBA 504 Continuing Care Retirement Community Feasibility Study

A thin record for continuing care

Continuing care retirement communities are rare in the 504 program: 47 loans from FY2017 to FY2026, for $66.0 million. The pace has slowed to almost nothing. FY2017 brought 11 loans and $22.0 million; FY2023 brought 1 loan of $249,000; FY2025 had 2 loans for $584,000; and FY2026 had 0, for $0. A lender should treat this cell as a short list of individual deals rather than a market with a pattern, and nothing in it departs far enough from its parents to pass our distinctness screen.

Its median loan, $937,000, sits inside a wide middle half that stretches from $303,000 to $2.3 million, mixing small additions with substantial campuses. Franchise operators account for 2.1% of loans. The CDC list is short: Florida First Capital Finance Corporation, Inc., Eastern Idaho Development Corporation and Midwest Business Finance Corporation hold 5 loans each, for $17.3 million, $5.4 million and $887,000. Minnesota leads the states with 9 loans, followed by Florida and Idaho with 5 each and Connecticut and South Dakota with 4.

What the floors can and cannot say

Approvals from FY2017 to FY2024 put cancellation somewhere between 15.6% and 24.4%, the upper figure counting undisbursed loans as cancelled; that is a wide gap for so few loans. We do not publish a charge-off rate for this cell: fewer than 30 loans sit in the disbursement cohort, too few for a rate to carry meaning, and the absence of a number here is not a statement that no loan has failed.

Coding, and what a study must test

The coding is imperfect. Independent living lacks a code entirely, and the code SBA uses here is shared with assisted living that provides nursing on site, so some projects here are closer to assisted living than to a full continuing care campus. A feasibility study for a 504 continuing care project carries more weight than usual because the loan record offers so little to lean on. It has to test demand from age-qualified and income-qualified households in the market area, and the home equity they would bring; the cost of a campus that combines housing, common areas and care; debt service coverage through a long fill period, when entrance or monthly fees build slowly; and the appraisal, which must split the real estate from the value of the care business, since the debenture is secured by the property alone.