Sims Mortgage Funding’s very successful 2021 can be described in a single word – refinance. We completed eleven refinancing deals last year, totaling approximately $131 million, for existing clients who had HUD-insured loans already in place. These transactions were designed to take advantage of favorable market conditions and to provide our clients with cost-effective and expeditious financing solutions. The weighted average time from start to finish was approximately 104 days.
The properties we refinanced were as diverse as our client base – they included affordable seniors housing with Section 8 rental assistance in New York, Pennsylvania, and Louisiana; market-rate multifamily rental housing in Louisiana; and a safety-net hospital in Southern California. Our clients will be using debt service savings to increase annual funding for capital expenditures, to offset operating expenses in a growing inflationary environment, and in one case, to release current mortgage reserve funds and lower future annual deposits.
The challenge our clients faced in 2021 was how to take advantage of favorable interest rates quickly when HUD financing, which can be a lengthy process, could expose them to market risk. This concern was amplified by the large, and growing, number of mortgage insurance applications accumulating in the queue waiting for review during the year. (Good news on the queue – it is gradually getting smaller.)
We analyzed each transaction individually to determine whether a new refinancing loan, which would require a complete application to be filed and be subjected to the queue, or a short-form application requesting a modification to the existing mortgage note, would be the best option. Want to know which option was most popular? You’ll have to contact us to find out! Even though all our 2021 refinancing loans were for existing clients, we also found time to make new friends, as we secured about $76 million in HUD approvals for new clients in California, New Jersey, and Louisiana.