It wasn’t so long ago that long-term care operators looked at HUD funding with a disdain bordering on contempt. But the Department of Housing and Urban Development has come a long way in a short time. By staying in the game, offering good rates and speeding up its approval pipeline, this public option has quietly gained a newfound respectability.
Consider what recently took place in the far northwest suburbs of Chicago. Skender Construction built a 72,000-square-foot independent senior living facility in Round Lake Beach. The project utilized HUD funding and was completed in nine months. That simply would not have happened a decade ago.
Or look at what happened in Baltimore. There, Park Heights Renaissance Inc. and Comprehensive Housing Assistance Inc. partnered to develop an affordable senior housing complex. The four-story Renaissance Gardens will have 60 one-bedroom independent living units. The complex will have several common areas, including a multi-purpose dining room, a living room, a computer room, and an activities room. Residents also will have access to some on-site health and social services. And who was picked to finance the project? A sophisticated boutique lender with specialized expertise? Nope, it was HUD.
HUD is currently dispensing loans at 3.5% and lower for increments ranging from five to 35 years. No wonder it has become popular for new construction and refinance loans. Of course, it probably doesn’t hurt the agency that so many commercial lenders have turned their funding spigots down or off, thanks to the worst financial crisis this side of the Great Depression.
But HUD also instituted a LEAN program a few years ago that sped up application processing and approvals.
We spend a lot of time at McKnight’s pointing out the foibles of public bureaucrats — and rightfully so. But turnabout is fair play. HUD has provided funding at a time when other sources have dried up. Overall, it has quickened its loan processing times. And it is offering rates that can’t be beat. These benefits have not gone unnoticed by senior living operators in the market for capital.
HUD might have once been the ugly duckling of senior living finance. But these days, it’s looking a lot more like a swan.
