Company Profile: FHA 242 debt in demand


By John Mugford

Alan P. Richman

At the start of this decade, as Alan P. Richman was delving into the idea of starting a company that would, among other services, secure Federal Housing Administration (FHA) Section 242 mortgage insurance for rural community hospitals, there were certainly some obstacles to overcome.

“I was starting the company at a time when (there weren’t many banking firms) that wanted to finance FHA deals for rural community hospitals,” he says today. It was a company that would probably entail a three-year pipeline to land a substantial number of projects, and it would be working with smaller hospitals that were, in many instances, not very profitable.

But Mr. Richman forged ahead with his company, in part because he thought the business model could be financially viable and in part because he saw a chance to provide a valuable service to smaller hospitals, many in rather remote areas. In some cases, he would be able to help out hospitals having trouble getting financing for capital projects. In yet other cases, he could assist hospitals that had already gotten into troublesome financial deals and loans.

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