Mental Health Infrastructure Improvement Act of 2025
The Mental Health Infrastructure Improvement Act of 2025 would create a new federal loan and loan guarantee program to help build, expand, renovate, and upgrade facilities that provide pediatric and adult mental health services and substance use disorder (SUD) treatment. It authorizes the Secretary of Health and Human Services to offer loans and loan guarantees for planning, construction/renovation, and to fund digital infrastructure, telehealth, and inpatient bed capacity. The bill also allows refinancing of certain existing loans for these purposes. A priority and set-aside framework directs funding toward facilities that increase beds, serve high-need rural or underresourced communities, provide a broad continuum of care, or offer integrated or complex-care services. It would establish a Mental Health and Substance Use Treatment Trust Fund to receive excess program revenues and use them for block grants to support community mental health services. The bill sets specific financial terms, safeguards, and eligibility rules, and it places a cap on annual funding through 2030. Sponsored by Senators Merkley and Hyde-Smith, the bill was introduced in the Senate on May 8, 2025 and referred to the Health, Education, Labor, and Pensions Committee.
Key Points
- 1Loans and loan guarantees for eligible entities to (a) plan, construct, renovate mental health or SUD treatment facilities; (b) upgrade digital, telehealth, and patient-care infrastructure; (c) add or convert inpatient beds for pediatric or adult psychiatric/SUD care; and (d) refinance existing qualifying loans.
- 2Preference and set-aside:
- 3- Preference given to proposals that increase beds, serve high-need rural/underresourced areas, provide multiple services along the care continuum, or offer integrated/specialized care for complex cases.
- 4- At least 25% of funds each fiscal year must go to facilities serving primarily pediatric and adolescent populations.
- 5Eligibility and definitions:
- 6- Eligible entities include hospitals (various types), SUD and mental health treatment facilities, and allied facilities that employ licensed mental health or SUD professionals or form alliances with such facilities.
- 7- Definitions cover what counts as a mental health treatment facility and a substance use disorder treatment facility, and exclude long-term inpatient care.
- 8Terms and safeguards:
- 9- Loans/loan guarantees must meet specific terms, including limits on maturity (generally up to 20 years or 50% of the asset’s useful life, whichever is less), and a cap of 80% of potential loan loss insured by the government.
- 10- Borrowers must provide at least 25% of project funding from non-federal sources; fees/insurance costs must be set to minimize net cost to the government; interest rates must align with market benchmarks and include a minimum floor.
- 11- The program requires explicit standards for credit risk assessment, reasonable assurance of repayment, and non-subordination to other debt.
- 12Refinancing:
- 13- Refinancing authority is limited to loans entered into up to 24 months before enactment; the refinancing authority expires 24 months after enactment.
- 14Losses and enforcement:
- 15- If a guaranteed loan defaults, the government would pay the lender up to 75% of the loss and the government would be subrogated to the lender’s rights; the government may recover amounts from the borrower.
- 16- The Attorney General would take action to enforce the government’s rights; forbearance may be allowed if budget authority is available.
- 17Funding cap and oversight:
- 18- The program is limited to amounts appropriated and not to exceed $200 million per fiscal year from 2026 through 2030.
- 19Mental Health and Substance Use Treatment Trust Fund:
- 20- Establishes a Treasury trust fund to hold revenues from the loan/guarantee program that exceed its costs.
- 21- Funds in the trust can be used for block grants of community mental health services under the Public Health Service Act (Title XIX).