We are pleased to report that 2013 was one of the most successful years in the 30-year history of Sims Mortgage Funding. Our success was powered by a team of experienced personnel with an average of 20-plus years of tenure with the company, a very loyal client base that consistently delivers repeat business, continued low interest rates for FHA-insured loans, and the improving efficiency of the Lean and Multifamily Accelerated Processing (MAP) programs for healthcare and housing finance respectively.
Our 2013 closings represented a diverse group of asset types that consisted of market-rate assisted living and multifamily housing, subsidized low-income elderly housing, and skilled nursing facilities, the latter as stand-alone projects or as part of a corporate portfolio. Our borrowers were local not-for-profit and proprietary organizations as well as regional healthcare providers. We refinanced high-coupon tax-exempt bonds, short-term bridge loans made in connection with the acquisition of skilled nursing facilities, and existing FHA-insured debt that we had originated several years earlier. In some cases, our loans featured cash-out provisions that were used to incentivize borrowers to preserve elderly affordable housing in inner cities and rural communities.
The past year was not without challenges. In mid-July, FHA was close to reaching its $25 billion limit in Firm Commitment authority for mortgage insurance for fiscal year 2013; it was forced to ration healthcare and multifamily approvals through mid-August, when it completely exhausted its authority. Moreover, the three-week government “shutdown” at the start of the new fiscal year beginning in October brought FHA activity to a virtual halt, creating significant backlogs in the review of applications and the closing of insured loans. Fortunately, we were able to navigate past these challenges for our clients by securing approximately $74 million in healthcare Firm Commitments covering six properties before the rationing went into effect. We also were able to convince FHA to review during the shutdown closing documents for four of the projects – their loans, which had hard deadlines, closed at the end of October; the remaining loans closed at the end of December.
We are pleased to announce that 2014 looks equally as promising. We are currently working on FHA-insured loans for projects from New England to California that will finance construction of new market rate rental housing, preserve elderly and multifamily affordable housing, expand a not-for-profit community hospital and recapitalize existing nursing homes, rental housing and assisted living properties.
As we celebrate our 30th anniversary in 2014, it perhaps never has been a better time to finance your project with FHA mortgage insurance. Interest rates have recently retreated and the weak economic data to date may indicate rates will remain low for a while. FHA has $30 billion in Firm Commitment authority for this fiscal year and the recent passing of a federal budget makes the prospect of another government shutdown unlikely. In the Lean program, FHA has renewed its contract with outside underwriters and closing coordinators, ensuring that applications are not stalled in the queue for long periods and closings proceed expeditiously. In the multifamily space, FHA continues to move forward with its transformation project that will consolidate field offices and create a standard underwriting and application process with the goal of establishing timely and predicable outcomes. Contact us, and our team of seasoned experts will show you how to successfully obtain an FHA-insured loan at great rates and terms.