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#2251454 - 03/30/21 02:33 PM Medically Underserved Area
banker-12 Offline
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Joined: May 2007
Posts: 1,247
We are making a loan to refinance a medical office building. There are three tenants - one is a pharmacy (CVS) and the other two are family clinics. The area is medically underserved. It is located in a middle income census tract.

Does this qualify as a Community Development loan? What documentation will be required? We are not sure whether our customer can obtain from the tenants a percentage of LMI patients the clinics serve or a percentage of Medicare/Medicaid recipients.

Thank You

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#2251458 - 03/30/21 02:52 PM Re: Medically Underserved Area banker-12
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 85,438
Galveston, TX
Might depend on your regulator, but here is a good article from the Richmond FRB:

https://www.richmondfed.org/publica...district_footprint/2017/footprint_201709
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#2251471 - 03/30/21 03:55 PM Re: Medically Underserved Area banker-12
banker-12 Offline
Diamond Poster
Joined: May 2007
Posts: 1,247
Thank you.

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#2251484 - 03/30/21 04:37 PM Re: Medically Underserved Area banker-12
Len S Offline
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Joined: Oct 2004
Posts: 2,155
Connecticut
Under the Joint Q&A's issued May 27, 2020 in response to the Pandemic, this may also qualify as financing "activities that revitalize or stabilize these areas by protecting public health and safety, particularly for low- or moderate-income individuals, low- or moderate-income geographies, or distressed or underserved nonmetropolitan middle-income geographies." The facilities you reference are public health facilities.

"Examples of qualified activities include loans, investments, or community development services that support:
• Emergency medical care, including medical facility services and supplies, temporary medical facilities, and enhanced medical/hospital capacity;
• Purchase and distribution of personal protective
• Assistance to state, tribal, territorial, or local governments for emergency management and to support communications of general health and safety information to the public."

Remember too that the 4th definition of "community development" is "revitalization/stabilization" and this involves attracting people or businesses to "areas targeted by federal, state, local or tribal government". So the project could very well qualify under that definition. Is the the middle-income tract a nonmetropolitan distressed or underserved tract"?
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#2251489 - 03/30/21 04:54 PM Re: Medically Underserved Area banker-12
banker-12 Offline
Diamond Poster
Joined: May 2007
Posts: 1,247
No, it's not a distressed or underserved tract. only medically underserved.

Thank you

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