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TRENTON-In the largest single transaction of its 75-year history, the Federal Housing Administration has finalized a deal to insure a $756 million mortgage for Capital Health of Trenton. The loan is made possible through the FHA’s Section 242 Hospital Mortgage Insurance Program, which provides HUD-insured mortgages made by private lending institutions to finance construction or renovation of acute care hospitals.

The loan will ultimately allow Capital Health to construct a new two-building, 968,760-square-foot hospital in Hopewell Twp., which will replace the existing 112-year-old Mercer Medical Center on Bellevue Ave. In addition, Capital Health’s Fuld Hospital in Trenton will create two new medical-surgical units and provide space to accommodate services transferred from Mercer.

By insuring the mortgage loan, FHA enabled Capital Health to obtain a lower cost financing, saving the hospital approximately $538 million in interest expense over the 25-year life of the loan.

“This is the biggest deal in FHA’s history,” US Housing and Urban Development secretary Shaun Donovan, said in statement. “By lowering the cost of credit for Capital Health, FHA will allow the company to use more of its resources to serve the medical needs of the community.”

Capital Health president and CEO Al Maghazehe notes, “With the financing now in hand, we are confident that we’ll deliver to this region in 2011 the finest healthcare facilities and most advanced medical care available.”

The Capital Health construction projects will create approximately 4,700 full-time jobs and provide an economic stimulus of nearly $1.7 billion during the construction period. Once construction is completed, the project will support an additional 2,200 jobs in the community and provide an annual economic benefit of close to $425 million.

This FHA-insured project is also backed by the full faith and credit guarantee of a Ginnie Mae mortgage-backed security. Ginnie Mae is a wholly-owned government corporation within the US Department of Housing and Urban Development.

All patients in the proposed 237-bed hospital will have private rooms for greater comfort and improved care. The six-story patient tower will be linked by a five-story atrium to a 320,000-square-foot, six-story building that will house physician offices.

Stockholm-based Skanska won a $134 million contract to build the facility. Construction industry sources say it is too early to mark this contract as the beginning of a possible industry rebound. However, they note Capital Health has set aside another $117 million for expansion purposes after the new hospital is completed in October 2011.

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