What is HUD Lean 232?
HUD Lean 232 can be broken down into two parts. HUD 232 refers to the agency’s program of mortgage insurance for skilled nursing and assisted living facilities. The program is now administered by its owner office, The Office of Residential Care Facilities (ORCF). The Lean aspect refers to a series of changes to the application process and program over the past few years designed to bring the HUD 232 loan program into compliance with Lean principles.
To oversimplify, Lean principles seek to create faster, more consistent results in business processes by eliminating redundancy and streamlining processes. A few of the changes implemented by HUD to adhere to Lean principles include standardized checklists and templates, use of the internet and software programs for application processing, and elimination of unnecessary procedural hurdles.
What types of loans are eligible for HUD Lean 232 Program?
Eligible loans are related to financing “the purchase, refinance, new construction, or substantial rehabilitation” of a housing project for the frail elderly. Licensed nursing homes and assisted living facilities are both eligible. Additionally, a combination of eligible projects, like refinancing an assisted living facility and new construction of a nursing home, is acceptable. Both for-profit and nonprofit entities are eligible.
What are the benefits of HUD Lean 232?
There are many advantages to HUD Lean 232 loans, including lower fixed interest rates, up to a 40-year term with full amortization for the life of the loan, and no personal recourse. The loan to value ratio on HUD Lean 232 loans is also favorable, allowing up to 80% for profit-motivated mortgagors and up to 85% for not-for-profit mortgagors
For these reasons, HUD Lean 232 is the best option for many but not all facilities. As with all financing decisions, a case-by-case analysis is required. Cambridge Realty Capital can put its years of experience to work, helping analyze your project to determine the best financing options available.
How long is the wait for a decision from HUD?
It depends on the “queue.” The HUD Lean queue is the line that HUD Lean applications are put into after being received. HUD-approved lenders like Cambridge Realty Capital can help you submit your application as quickly as possible, but unfortunately, they have no control over the speed at which HUD evaluates and processes the application once received.
Though there are no guarantees, the following are some general guidelines for expected wait times for a decision: 60 days for refinance applications, 30 days for loan modifications, and 180 days for new construction or substantial rehabilitation.
What is Cambridge Realty Capital’s Experience with HUD Lean 232?
Cambridge Realty Capital is a HUD approved lender that has extensive experience with HUD 232 loans, both prior to and after the implementation of Lean processes. Cambridge is consistently a top HUD 232 lender and its HUD-insured financings total more than $478.6 million. Cambridge considers loans of $1.5 million and up for HUD Lean 232.
How Can I Determine if HUD Lean 232 is Right for My Project?
Contact us today to learn whether your project qualifies for HUD Lean 232 financing through Cambridge Realty Capital.