HUD 232 LEAN Loan Processing
Streamlined Processing for HUD 232 and HUD 232/223(f) Healthcare Loans
If you're looking to build, rehabilitate, or refinance a senior living, assisted living, or skilled nursing facility with a HUD 232 loan or a HUD 232/233(f) loan, you're in luck-- because, in the last decade, the HUD 232 program has adopted a new form of processing, called LEAN processing, that can significantly reduce waiting times and streamline the entire loan application and approval process.
HUD 232 LEAN Loan Processing Changes
In order to reduce approval times, the HUD 232 LEAN process has instituted changes including:
- Forms, including lender templates, certifications, and other documentation, are standardized
- In most cases, duplicate forms and submissions are not required
- LEAN applications are not submitted by borrowers; instead, they are submitted by lenders directly to the OCRF (HUD's Office of Residential Care Facilities)
- HUD LEAN processing does not require propriety earning carve-outs
HUD 232 LEAN Loan Requirements
HUD 232 LEAN processing also has specific requirements, including:
- Physical Property Exams: Third-party property exams are required in order to determine the condition of the property itself; for properties that may require a lot of repairs, a HUD 232 loan for substantial rehabilitation may be recommended.
- Credit Check: HUD/FHA will look at a borrower's credit history and financial experience to determine if they're a good fit for a HUD 232 loan.
- Developer Experience: HUD/FHA will also examine examine a developer's experience in the healthcare industry, especially the financial health of any healthcare properties that they currently own.
- Formal Incident Reports: HUD now requires that all properties using HUD 232 financing have a formal, software-based incident reporting system.
- Special Portfolio Reviews: For borrowers with more than one HUD 232-insured property, HUD may require a special review, and, for borrowers with three or more properties, HUD may require a master lease.