Even in an uncomplicated transaction, glitches can and do sometimes happen with a HUD loan. “HUD puts up a lot of hoops for 232 applicants to jump through,” admitted Cambridge Realty Capital Founder Jeffrey Davis. “But hoops don’t have to equal roadblocks,” he adds. “Thoroughly preparing for eventualities ahead of time minimizes the likelihood of a hoop becoming an obstacle.”
Cambridge Realty Capital has been an approved HUD lender since the late 1980s. Thirty years of practice has made Cambridge adept at preparing for eventualities over its three decades. “There isn’t much we haven’t seen,” says Davis of “glitches” in the application process. Cambridge and its HUD applicants have faced all kinds of issues that complicated the process of underwriting and processing HUD 232 loans, from hot water tanks that were not up to code, to increasingly-frequent government shutdowns during which no HUD loan applications can be processed by the federal government.
The average processing time for a HUD 232 loan is anywhere from nine to twelve months. While Cambridge doesn’t make promises as to loan processing time for its own applicants, Cambridge’s average tends to be about six to nine months. “There are a myriad of factors that affect how long it takes to close a HUD loan,” Davis remarked, “which is why we can’t offer a guarantee on timing. However, there are many factors that can be greatly mitigated when a lender knows from experience what information and documentation HUD will want to see upfront, and what other factors may potentially become issues, such as a faulty hot water tank, that will need to be addressed before a loan can be closed.”
When it comes to avoiding glitches, Cambridge’s clients are grateful that Cambridge’s experience worked in their favor. Joseph Vince was first introduced to Cambridge Realty Capital when his company was selling one of its properties. Cambridge was representing the buyer, and, of necessity, Vince was in contact with Cambridge on a number of points regarding the transaction. “They were very professional,” Vince recounted, noting that Cambridge always kept him apprised of the status of the buyer. “I never had to call them to ask what was going on. We were very impressed.” So when it came time later on for Vince’s company to refinance one of its properties, the first call he made was to Cambridge Realty Capital. “I don’t think we would have worked with Cambridge on the refinance if they hadn’t done so well on the selling end,” he declared.
The deal took about six months to close, and that included a period where the government was shut down. Vince reported that Cambridge was well aware of the timing of the shutdown from the start and thoroughly prepared Vince, completing as much of its own part of the process in advance of the shutdown. The day the shutdown ended, Vince recalled, “they hit the ground running. We were very pleased.”
There’s no minimizing when it comes to the detail that is involved in a HUD application. “HUD is very thorough, and so we are very thorough,” Davis maintains. “It sometimes feels like jumping through hoops, but in the end, it can save weeks or months of processing time and even result in a better interest rate for the borrower.” “We expect Cambridge to put up hoops for us to jump through,” stated Cambridge client Lawrence Yablong, President of LaSalle Realty Inc of Chicago. “I just ask how high and how many there will be?” In return, Cambridge walks with the borrower through every step of the process, coaching and offering advice.
“[Cambridge’s] professional staff has a remarkable understanding of what will and will not fit within HUD guidelines,” offered another Cambridge client, Daniel Maguire, Vice President of Sandy River Company of Portland, ME. “In working with the firm, we never encountered a servicing problem. And we’ve never had an accounting issue with any of our loans.” Andrew Delman, President of National Preservation Housing Partners of Deerfield, IL added, “[Cambridge] is constantly looking for ways to do things better utilizing the tools available to them. Effectively managing the flow of information has been a major priority of the firm for as long as we’ve been working with them.”