HUD Adding Staff to Handle Backlog of Senior Housing Program Applications

The Department of Housing and Urban Development said it plans to hire additional employees through a contract firm to assist with the backlog of Section 232 applications.

The program is meant to conserve and increase the supply of nursing homes, intermediate care facilities, and board and care homes by providing credit enhancement through insurance of mortgages for new or substantially rehabilitated projects, as well as for the purchase or refinancing of existing Section 232 insured projects.

To help speed up the time to close, HUD developed the LEAN process for Section 232 applications to employ a standardized work product and process.  Despite the improvements, HUD hasn’t been able to keep up with demand.


“As a result of changes within the housing market, the 232 program has seen a dramatic increase in the number of loan applications to the point there are in excess of 400 loan applications currently waiting to be processed,” said a statement from the FBO.  “HUD’s goal is to reduce the 232 Program “queue” by approximately 200 applications within a period of six to nine months.”

In the first 34 weeks of fiscal year 2011, the agency has received 555 applications for the program.  Of those applications, 328 commitments have been issued, up from 318 in FY 2010 according to data HUD provided SHN.

The decision to boost staff is receiving praise from senior housing trade groups like the Assisted Living Federation of America, who is confident the queue of pending applications will be addressed and the time required to process applications will be significantly reduced.


“ALFA worked with other groups in the nation’s capital to push for more funding to support the processing of HUD Section 232 applications,” said the group on Wednesday.  “This program is one way to spur entrepreneurship in senior living, as well as expand the options available to seniors and their families today. Timely processing of HUD Section 232 applications is a critical part of ensuring new developments are built on time and on budget.”

The contract is supposed to be awarded by June 30, with the work to begin in July or August.  View a copy of the RFI here.