New HUD Guidance: What Owners and Operators Need to Know

New HUD Guidance is Here: What Healthcare and Senior Housing Operators Need to Know

HUD’s latest guidance impacts how skilled nursing and senior housing facilities are evaluated for FHA-insured financing through the Section 232 program. A key highlight is the introduction of the Express Lane, offering an expedited underwriting path for qualified applicants. Understanding and meeting the updated criteria is crucial when evaluating FHA-insured financing.

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Key Criteria:

Maximum LTV:

• 70%

Minimum Debt Service Coverage Ratio*:

• 2.0x for SNF
• 1.6x for non-SNF

*Based upon Unadjusted T-12 NOI, defined as having no modifications for bad debt, management fee, rate increases, etc.

Quality of Care :

• Minimum 2-star Overall and 2-star Health Inspection Ratings
• No “Red Hand” abuse indicator
• No “G” tags or higher in the previous 12 months

FHA Borrowing History:

• No history of FHA insurance claims or defaults (60+ days)

Special Use Assets:

• No more than 20% attributed to special uses

Operator History :

• 2+ years operating at the subject facility before application submission

Asset Loan Caps:

• $70MM max for greater NYC area; $50MM elsewhere

Other Requirements:

• No outstanding environmental/previous participation issues
• No pending OHP CCR review 

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Talk to Ikaria Capital Group About Your Financing Strategy

Ikaria Capital Group is an approved FHA lender with deep experience in HUD-insured healthcare and senior housing transactions. If you have questions or would like to assess how these updates may impact your next financing decision, please contact your dedicated banker or one of the experts at Ikaria Capital Group.