HUD’s Office of Healthcare Programs has introduced a new “Express Lane” for Section 232/223(f) applications to expedite financing for low-risk skilled nursing and seniors housing healthcare facilities. This initiative allows qualified applications to receive queue priority, significantly reducing processing times, a welcome change for lenders aiming to shorten timeline to closing. By prioritizing applications that demonstrate financial stability, operational consistency, and regulatory compliance, HUD is streamlining support for lower-risk facilities.
To qualify, borrowers must meet certain underwriting and operational benchmarks, including a maximum 70% loan-to-value ratio and high debt service coverage ratios (2.0x for SNF components and 1.6x for non-SNF). Facilities must have at least a 2-star overall and health inspection rating on Medicare.gov, with no abuse/neglect flags or serious regulatory violations in the past year. Additional requirements include having experienced operators in place (minimum two years at the property), clean FHA histories for all controlling parties, and capped loan sizes ($70 million for New York metro areas and $50 million elsewhere). Lenders are responsible for ensuring applications are fully underwritable and complete upon submission, with no pending environmental, participation, or legal issues.
For owners and investors in skilled nursing facilities, the new Express Lane offers the potential for faster access to HUD-backed financing, improving capital liquidity and enabling quicker refinancing or acquisition timelines. This could enhance strategic planning and value creation, especially for portfolios with strong operational metrics and regulatory compliance.
“This initiative creates a clear runway for qualified borrowers to unlock lower-cost capital more efficiently,” said Christopher Clare, Managing Director at Greystone. “It’s a significant opportunity for owners with high-performing assets to maximize value while navigating today’s complex capital environment.” As the #1 HUD healthcare lender*, Greystone is well-positioned to help clients leverage this program to drive growth and portfolio optimization.
Read the full HUD bulletin here.
*For HUD’s 2024 fiscal year. Based upon combined firm commitments of Greystone Funding Company LLC and Greystone Servicing Company LLC.
The information provided in this article, including, without limitation, any opinions, predictions, forecasts, commentaries or suggestions, is for informational purposes only and should not be construed to be professional or personal investment, financial, legal, tax or other advice.