In spite of the curveball that 2020 threw to senior living operators, it became the perfect year for HUD borrowers to take advantage of dropping interest rates through Cambridge’s IRR loan program. The IRR (Interest Rate Reduction) program allows existing HUD loan holders to modify their existing HUD loan in order to get a lower interest rate without penalty and without refinancing their mortgage. Cambridge closed 47 IRR loans in 2020, representing several operators in multiple states. ”We were pleased to be able to offer this to our operators and help provide some financial relief in an extraordinarily challenging operating year,” said Cambridge Realty Capital President Jeffrey Davis.
The overarching sentiment expressed by the beneficiaries of Cambridge’s IRR program was that the process not only saved them money, but that it was accomplished with very little involvement or hassle on the parts of the borrowers. Cambridge’s Senior Managing Director Sampada D’silva was proactive in reaching out to existing clients she believed would benefit from the program, and all the details were accomplished efficiently without the need for in-person meetings.
Abe Wagschal was one such client who was pleased with the terms of his company’s IRR loan as well as the process to obtain it. Wagschal commented that his IRR loan for Carlisle Manor of Carlisle, Ohio was “painless,” adding that “Cambridge was super-efficient. I was amazed at the time it took to reset my rate with NO difficulty at all,” Wagschal stated, “and not at all time-consuming, considering I was overseas 8000 miles away.”
Six properties operated by Continuing Healthcare Solutions also saw savings by opting into Cambridge’s IRR program, with a combined total of $62 million dollars in loans. CHS Vice President Ben Parsons recounted that “Cambridge staff were responsive and organized.” He added that he was always able to get quick answers to questions. “No matter where they were, [Cambridge President] Andy Erkes and Jeff Davis found ways to make themselves available.”
Jason Bush of the Diakonos Group echoes similar sentiments of his company’s experience with its four 2020 IRR loans. D’silva reached out to Bush in March of 2020, early in the pandemic, letting him know that Diakonos Group could benefit from an IRR loan. Diakonos was able to lower from a 4.35% interest rate to 3.79% through the IRR program.
Jack DePizzo of Premier SNF Services expressed a similar sentiment regarding his company’s IRR loan. “We are happy with Cambridge and thankful that Cambridge is keeping us up to date on changes that are going on due to the pandemic.”
D’silva noted that it was an exceptionally busy year for IRR loans. She gets a strong sense of satisfaction from being able to help so many HUD borrowers save money on their interest. Davis agreed, adding that money saved ultimately benefits the residents who live and receive care in the facilities. “When owners can put more money back into their facilities, everyone wins.”