Bank stopped due to Covid: How to close with seller finance?

[John Clarkson]

We are purchasing a senior housing portfolio and we have gone through the underwriting process with our bridge to HUD 232 lender. We were at the final step of working with their legal team to prepare the closing documents two weeks from the close of escrow, and they have put an indefinite suspension on all deals in the pipeline.

In the pursuit of closing in the next two weeks, this appears to be our option:

Negotiate a seller finance.

The total purchase price is $15M

The sellers have $9M in debt 

The sellers have $6M in equity

We will pay them $3M down now, and the remaining $12M at the refinance event in two years. We will pay them interest on the $12M and a 5% share of net profit.

Will the sellers lender allow us to assume the debt, or for the sellers to keep the debt in their name while we operate the community?