FHA Hospital Projects Create Billions in Economic and Community Benefits

Since the beginning of Fiscal Year 2007, FHA issued 18 mortgage insurance commitments for hospitals all over the United States. These renovation, expansion, and replacement hospital projects are having an immediate and direct impact upon local economies. Construction expenditures for these projects, including worker salaries, supplies, equipment, and other goods and services, are providing a $1.8 billion economic stimulus to these hospitals’ communities.

The expenditures stimulate demand for local businesses and create an economic ripple effect. FHA’s Office of Insured Health Care Facilities and HUD’s Office of Policy Development and Research estimated this impact using the widely-respected IMPLAN economic model. During the construction period alone, the model predicts that the $1.8 billion in construction expenditures creates over 15,700 jobs in the community. The total economic impact of the
$1.8 billion stimulus is $5.1 billion.

The benefits of FHA mortgage insurance will not end when construction is completed on these facilities. New service lines and expanded capacity resulting from the projects spur growth in hospital revenues that ripples through the economy, creating thousands of new, permanent jobs. The model estimates that these 18 projects will create nearly 9,000 permanent jobs in the hospitals’ communities, including nearly 2,400 jobs at the hospitals. Furthermore, with an initial investment of $1.8 billion, the total annual economic impact of these projects is nearly
$1.6 billion.

The mission of FHA’s Office of Insured Health Care Facilities is to facilitate the financing and construction of much-needed facilities through the Section 232 and 242 programs. FHA-insured hospitals are vital contributors to the economic strength and growth of local and regional communities. They are among the largest employers in their service areas, providing jobs and job growth even in times of economic downturn. Their purchases, investments, and construction projects stimulate demand for local businesses, enabling those businesses to expand and create additional jobs. The results of the IMPLAN model demonstrate these facts. Not only do FHA projects help bring enhanced medical care to communities, but they also provide a very powerful economic stimulus to the communities they serve.