CHICAGO, IL--The bold administrative changes that have radically changed the way FHA-insured healthcare loans work their way through HUD’s Section 232 funding process are giving thoughtful people everywhere a reason to rethink presumptive ideas about bureaucratic efficiency and resolve, funding expert Jeffrey A. Davis (top right photo) believes.
The new process initiated by FHA for HUD 232 loans introduces an automated workflow and approval process, submission of applications via an electronic portal on the internet, electronic payment, and a standardized work product that includes a submission that can, in most cases, be reviewed by only one HUD staff person.
“In the larger picture, what’s at stake with this experiment are changes that could give us all cause to rethink the way we view the competency and creativity of those who are called upon to deliver government services in a timely and efficient fashion,. The hope is that a formula may have been found that will enable federal agencies to eliminate bureaucratic snarls
and function more proficiently in an increasingly competitive world.”
Contact: Evan Washington, Phone: (312) 521-7603, Fax: (312) 357-1611, E-Mail: ew@cambridgecap.com
Davis is Chairman of Chicago-based Cambridge Realty Capital Companies(r), one of the nation’s leading HUD 232 lenders.
He points out that the last thing anyone might expect to emerge from a lame duck administration that has shown little enthusiasm for regulatory processes of any kind is a blueprint that has the potential to revolutionize the way government agencies dispense services of all kinds.
“For this sur
prising development we can thank FHA Commissioner Brian Montgomery (top left photo) and his colleagues at HUD for having the audacity to believe that management methods that have proved themselves in private industry could be used to effectively eliminate bureaucratic red tape and dramatically reduce the time it takes to apply, qualify for and obtain HUD financing.
prising development we can thank FHA Commissioner Brian Montgomery (top left photo) and his colleagues at HUD for having the audacity to believe that management methods that have proved themselves in private industry could be used to effectively eliminate bureaucratic red tape and dramatically reduce the time it takes to apply, qualify for and obtain HUD financing. “If the changes at HUD become the impetus for a trend impacting other government agencies, comparisons with FDR’s New Deal and other significant developments that have radically altered the role of government in society would not be far-fetched,” he said.
As part of the announced reorganization, administrative responsibility for HUD Section 232 healthcare loans passes to the FHA’s Office of Insured Healthcare Facilities (OIHF), the group that also coordinates funding for HUD‘s Section 246 hospital mortgage insurance program.
Effectively, with this change, OIHF becomes a unified single-source for the HUD 232 program, which in the past had been administered unevenly by FHA housing professionals in HUD field offic
es scattered throughout the U.S.
es scattered throughout the U.S. “Logically, placing nursing home and assisted living loans with the same individuals who underwrite loans for other types of medical facilities seems like a good idea.
"But it’s the Commissioner’s decision to insert the highly touted “Lean” management concept pioneered by Toyota Motor Corp. into a moribund bureaucratic process that has excited everyone in the industry,” Davis said.
Simply, the “Lean” management process is driven by a few simple rules, he points out.
“With the ‘Lean’ process, all work should be highly specified as to content, sequences, timing and outcome, and every customer-supplier connection must be direct. Also, there needs to be an unambiguous “yes or no” way to send req
uests and receive responses.
uests and receive responses. “The pathway for every product and service must be simple and direct. And any improvements must be made in accordance with the scientific method under the guidance of a teacher at the lowest possible level in the organization,” he explained.
“Obviously, such an approach takes square aim at inefficiencies historically identified with bureaucratic procedures,” he noted.
The new process initiated by FHA for HUD 232 loans introduces an automated workflow and approval process, submission of applications via an electronic portal on the internet, electronic payment, and a standardized work product that includes a submission that can, in most cases, be reviewed by only one HUD staff person. Applications now
require fewer exhibits and conventional market-based appraisals are being used instead of HUD-specific reports.
require fewer exhibits and conventional market-based appraisals are being used instead of HUD-specific reports. “The bottom line is that the changes are dramatically impacting the process. Nursing home and assisted living borrowers may now move from application to closing in 40 days compared with the four to six month timetable that had been standard for the course,” he said, adding:
“In the larger picture, what’s at stake with this experiment are changes that could give us all cause to rethink the way we view the competency and creativity of those who are called upon to deliver government services in a timely and efficient fashion,. The hope is that a formula may have been found that will enable federal agencies to eliminate bureaucratic snarls
and function more proficiently in an increasingly competitive world.”Contact: Evan Washington, Phone: (312) 521-7603, Fax: (312) 357-1611, E-Mail: ew@cambridgecap.com
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