The Department of Housing and Urban Development (HUD) recently proposed a new rule that affects its Section 232 program. Senior housing owners and operators who either use this program or are considering using it should familiarize themselves with the proposed rule, and can comment on it if they choose. HUD’s 232 program is extremely important to the senior housing industry because it provides insured financing for assisted living communities and licensed skilled nursing facilities. The Chicago-based firm Cambridge Realty Capital is an approved lender under the program, and stands ready to provide attractive financing to interested parties under Section 232. Parties seeking capital under Section 232 should contact Cambridge Realty Capital to learn more about the many different financing options it offers for senior housing transactions.
Details Underlying the Proposed Rule
HUD last updated the regulations for its Section 232 program in 2012. Section 232 encourages the building of healthcare properties by authorizing the Federal Housing Administration to insure mortgages made by private lenders to develop assisted living facilities, nursing homes, intermediate care facilities, and board and care homes. Section 232 also allows for fixed-rate, long-term financing of new and rehabilitated properties.
Because senior housing construction is increasing, HUD recognized a need to update some of Section 232’s rules to account for the increase in senior housing communities on the market. In updating these regulations, HUD kept the requirement that owners and borrowers must submit audited financial statements to the Department. They also added a rule requiring operators of Section 232 properties to submit audited quarterly and annual financial statements.
The proposed rule maintains the requirement that operators submit financial reports to HUD. It also puts operators and owners on the same footing by increasing the time for submitting them by 30 days. The proposed rule also authorizes HUD to direct operators to submit these reports to their lender and other third parties.
The proposed rule takes effect on October 16; HUD is accepting comments on it until November 17. Senior housing operators affected by the rule and wishing to make their opinions known to HUD should submit their comments by the mid-November deadline. Operators who are not currently in the program but are considering using it should contact the approved HUD lender Cambridge Realty Capital to learn more about this and other financing options that the firm offers.