Sims Mortgage Funding had a very good 2016. We stayed active in all of HUD’s major mortgage insurance programs, closing loans in Rhode Island, Louisiana and Maryland that refinanced short-term bank debt for skilled nursing homes, financed construction of new market-rate multifamily rental housing, and recapitalized existing affordable elderly housing. Moreover, towards the end of the year, we obtained mortgage insurance commitments for a hospital expansion in California and affordable housing recapitalizations in Minnesota and New Jersey, promising a busy start to 2017.
Last year also saw SMF implement with great success a web-based, automated loan system for our multifamily lending platform. The system enables us to process and underwrite loans more efficiently and quickly, shortening the time it takes to get to closing. We intend to introduce that platform to our LEAN healthcare activities in 2017, and expand it on the multifamily side, as we have seen a considerable increase in the number of housing deals in our pipeline for 2017 and beyond.
The upcoming year also brings a bit of uncertainty at HUD, which typically happens every four (or eight) years following a change in administrations. Subject to Senate confirmation, we shortly will have a new HUD Secretary, Dr. Ben Carson; that will be followed by a host of new senior political appointees, including a new FHA Commissioner. Most of the questions posed to Dr. Carson at his confirmation hearing, which was held on January 12, were about issues related to single family and Veterans housing; observers report that the tone of the hearing was generally cordial.
What are Dr. Carson’s views of healthcare and multifamily mortgage insurance, and what, if any, changes to these programs might he make, remain to be seen. However, we hope that Dr. Carson takes to heart the old physician’s adage “do no harm!”
Some perspective: SMF has been financing healthcare and housing projects with FHA mortgage insurance since 1984, and we have seen numerous administrations, HUD Secretaries, and FHA Commissioners come and go, while the healthcare and multifamily mortgage programs remain. They are well-managed and produce net revenues to HUD, as the insurance premiums collected and recovery on defaulted loans exceed the amount of claims paid.
Nonetheless, stay tuned in this space over the next few months for updates on the impending transition at HUD.