Future senior housing/healthcare industry historians will look back on the Obama years as a period highlighted by record low interest rates and skyrocketing demand for popular HUD Lean funding programs.
“During the Obama administration’s middle years, HUD was doing record numbers of loans, as lenders refinanced deals two and sometimes three times in order to take advantage of low interest rates,” says Cambridge Realty Capital Vice President Anthony Marino.
During this period, HUD dramatically increased staffing to handle the increase in volume, he points out.
Cambridge is one of the nation’s leading senior housing/healthcare lenders, with more than $5 billion in closed transactions. Mr. Marino notes that the volume of HUD loans has decreased over the past couple of fiscal years as rates have begun to tick up.
“But rates still remain extremely favorable,” he said.
“As tends to happen during these periods, owners begin to shift their focus from refinance to the rehabilitation of existing facilities. HUD has seen an increase in these types of applications and has begun to shift staffing to accommodate it,” he said, adding:
“While the pipeline of acquisitions and refinances remains strong, the record levels we saw three to four years ago are a thing of the past. The industry’s focus on new developments and refurbishing an aging inventory has helped fill that gap.”