Commentary

Here are several of our observations on recent HUD matters that we’d like to share.

HUD multifamily lenders, like most of our conventional lending colleagues, underwrite deals based on metrics like loan-to-cost (LTC), loan-to-value (LTV) and debt service coverage (DSC).

We borrowed – and slightly amended – that classic line from Blazing Saddles, and before that, The Treasure of the Sierra Madre, to make this point.

HUD-insured multifamily construction loans offer terrific terms: 40 year amortization, high loan-to-cost ratios, low debt service coverage ratios and non-recourse provisions.

The Section 232/223(f) program is HUD’s primary refinancing program for existing skilled nursing homes, assisted living facilities and memory care centers. It provides long-term, fixed-rate financing with a maximum 35-year amortization.

We’re pleased to bring back our “Top 10” segment, but in the interest of reaching a younger demographic, we’ve eliminated the reference to the former late-night talk show host in our lead.

The HUD Section 221(d)(4) program provides high leverage, long-term, fixed-rate multifamily financing – 85% of cost and a 40-year amortization.  Debt service coverage requirements are a modest 1.17, loans are assumable, and did we mention they also are non-recourse?

Recent volatility in the capital markets has many multifamily housing owners and operators “clutching their pearls” about the availability of financing at reasonable terms and conditions.

HUD recently announced that it will be offering lower MIPs for healthcare loans starting on or about October 1, 2022, the start of the new Federal fiscal year.