The recent updates to federal guidelines on mortgage insurance applications are set to benefit senior living providers by making it easier for them to access financing. The U.S. Department of Housing and Urban Development (HUD) has revised its rules, changing the requirement for a corporate credit review period from 18 months to a new threshold based on HUD financing. This change, as explained by Tim Eberhardt, Chief Lending Officer at CFG Bank, will allow more providers to access HUD financing without undergoing a lengthy review process.
Prior to these new guidelines, the threshold for corporate credit reviews was based on a fixed total dollar amount of mortgages over time. With the updated rules, the threshold is now percentage-based on HUD’s total healthcare portfolio, taking inflation and program size into account.
The revisions also limit the scenarios in which the Office of Risk Management is required to approve a corporate credit review, streamlining the approval process. This will make the HUD 232 Program more accessible to healthcare providers and have a positive impact on the senior housing and long-term care industries.
One major change that borrowers will benefit from is the increase in thresholds from $90 million to $193.8 million, allowing existing owners/operators in good standing with HUD to obtain up to $50 million in additional financing within 18 months of their last Large Portfolio loan closing. This means that HUD borrowers can now take on more debt without triggering additional credit reviews.
