CHICAGO, IL--What has HUD’s Office of Healthcare Programs (OHP) done lately to relieve the backlog and speed the flow of HUD 232 LEAN loan applications progressing through the process?
Senior housing/healthcare funding expert Jeffrey A. Davis (top right photo) says a bulletin distributed by HUD’s Committee on Healthcare Financing indicates progress is being made on several fronts.
“The fact that OHP's staff is expanding is encouraging news. And the agency is close to finalizing contractual arrangements with outside consultants that will provide securitization for loans currently in the HUD 232 LEAN queue,” he said.
Davis is Chairman of Cambridge Realty Capital Companies, one of the nation’s leading senior housing/healthcare lenders, with more than $3 billion in closed transactions. The company has been one of the most active FHA-approved HUD 232 lenders in the country for more than a decade.
He points out that OHP has offered 18 new positions to applicants and has received approval for 10 additional new hires. Nine of the newest hires will be LEAN account executives, while others will either join the current group of HUD 232 underwriters or be placed in asset management, closing coordination or other understaffed areas.
HUD has been diligently working to “bust the queue,” Davis said.
Earlier this year, OHP began discussions with a number of different consulting firms, with the idea of finding a firm or firms that could work with Wall Street sources to create a market for approximately 400 loan applications currently moving through the HUD 232 LEAN queue. Contracts expected to be in place by July 4 should enable the agency to clear the queue within a year, he noted.
In another move aimed improving efficiencies, Davis says a task force is looking into ways to streamline the closing document process. Of special concern is the time-consuming final review that occurs after a firm commitment already has been made to the lender and borrower.
“Senior management at HUD appropriately views the extra 90 days this can take as unacceptable, and is working with the industry to affect improvements in this area,” he said.
Senior OHP management also is concerned that application items submitted as part of the HUD underwriting process are being reviewed in a manner that slows the LEAN process. OHP has implemented various tracking protocols to better follow where applications are at any given stage, and believes an emphasis on training will lead to a more streamlined LEAN approach.
Also, Davis says, OHP continues to seek ways to improve the Green Lane, the special queue created to process “low risk” loans more swiftly. Apparently, deals structured more conservatively to satisfy Green Lane eligibility requirements have given HUD a stronger portfolio of funded properties, he noted.
The agency continues to evaluate its risk assessment techniques and the data points it feels best evaluate risk, he added.
“The goal for HUD’s 232 LEAN program is to have a normal loan underwriting system in place by the start of next year. Based on the multiplicity of measures underway, a reasonable assumption is that the agency will achieve this end.
“Looking ahead, we see HUD moving forward with more and better loan underwriting and loan structures for senior housing and healthcare facilities,” he said.
Contact:
Evan Washington
Phone: (312) 521-7604
Fax: (312) 357-1611
Ronnie S. Issenberg, a senior associate and Gabriel Britti, a retail property investment specialist, both in the firm’s Miami office, are representing the seller, a private investment company.
