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U.S. HUD LEAN 232 / 223 (f) Loans

As those active in the senior housing industry are well aware, the Office of Healthcare Programs (OHP) was created to oversee all HUD-insured healthcare facility financing.    Presently, all LEAN applications are submitted electronically to the OHP in Washington, D.C.   Applications must be submitted to HUD using a HUD-approved mortgagee such as Cambridge; borrowers cannot submit loans directly to HUD.   As noted,  StoneCreek Enterprises is an authorized correspondent of Cambridge.

 

Licensed senior housing and long-term care facilities, licensed skilled nursing, assisted living, and board and care facilities are eligible for HUD LEAN 232/223(f) financing.    Facilities containing unlicensed independent units are eligible, as long as the number of these types of units is less than 25% of the total units in the facility.

 

Maximum loan-to-value remains at 80% for for-profit mortgagors and 85% for nonprofit mortgagors. Minimum debt service requirements remain the same at 1.1765 for for-profit mortgagors and 1.11 for nonprofit mortgagors. According to Cambridge Realty Capital Companies, LEAN is the processing system for all HUD 232/223(f) loans. The LEAN system was developed when FHA Commissioner Brian Montgomery made the decision to insert the highly touted “LEAN” management concept into the HUD system of processing and approving loan applications. The “LEAN” management process is driven by a few simple rules: all work should be highly specified as to content, sequences, timing and outcome, and every customer-supplier connection must be direct. Also, there needs to be an unambiguous “yes or no” way to send requests and receive responses. The pathway for every product and service must be simple and direct, and any improvements must be made in accordance with the scientific method under the guidance of a teacher at the lowest possible level in the organization. LEAN is aimed to eliminate historical inefficiencies in the processing and approval of HUD applications. 

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