WASHINGTON, D.C. — Financing for seniors housing properties through the HUD Lean Section 232 mortgage insurance program saw a notable increase for the fiscal year ending Sept. 30, with total volume jumping 20 percent over the previous year to $3.4 billion.
The total number of loans increased 8 percent to 310, meaning that loan sizes were larger than the previous year.
The HUD/FHA Section 232/223(f) refinance program was the largest contributor to the volume as it processed 273 of the loans with a total loan amount of $2.8 billion. The HUD Lean program allows for the refinancing or acquisition of healthcare properties, including licensed nursing homes, assisted living, intermediate care and board and care facilities.
Lancaster Pollard Mortgage Co. led all lenders in seniors housing HUD financing for the third consecutive year. With 79 total loans totaling $769.3 million, the company more than doubled any other lender's volume. Greystone Funding Corp. came in second with 15 loans totaling $376.7 million. KeyBank was third with 33 loans totaling $333.4 million.
“Once again, many expected a gradual rise in long-term interest rates as the year began, and once again, it never materialized,” says Kass Matt, president of Lancaster Pollard. “Rates continue to remain below historical averages, and seniors housing and care providers continue to take advantage.”
Thirty-five lenders closed HUD loans in fiscal year 2017 with Lancaster Pollard responsible for 23 percent of the total activity. The Columbus, Ohio-based firm has been the top HUD Lean lender since fiscal year 2010 with 600 loans totaling $4.7 billion over that eight-year period. In September of this year, the firm was acquired by ORIX USA, a division of leading international financial services group ORIX Corp. ORIX also owns RED Capital Group, the seventh ranked Lean lender during that time-span.