HUD Awards Contract to Clear Senior Housing Application Backlog

After years of work to get additional support for the Department of Housing and Urban Development’s Section 232 program, things are finally progressing.

On Friday, HUD announced that Summit Consulting was awarded a one year contract to support underwriting efforts and clear out a backlog of applications that currently stands numbered at 385 according to a HUD spokesperson.

In 2008, responsibility for the Section 232 program was transferred from the Office of Multifamily to the Office of Health Care Programs (OHP). As a result of the lack of available financing, applications for the program have continued to grow and the amount of time needed to get approved has increased.

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Before Summit Consulting is able to start underwriting, the contractors must complete an OHP training course, expected to begin next week. According to HUD, the ultimate goal is to reduce the pending applications down to a 30-day backlog.

“This is something that we’ve been talking about for a couple quarters and it’s going to have a real impact on the process in order to get HUD funding,” said Brian Pollard, president and managing director of Lancaster Pollard and Co. during an interview with SHN. With the additional support, HUD hopes it will be able to reduce the queue in six to nine months. “That’s pretty aggressive, but time will tell,” he said.

Earlier this year, HUD added additional staff to meet the increased demand, but wasn’t able to work its way through the backlog. Even after HUD implemented its LEAN processing model for applications, it could still take as long as a year to go through the entire process. However, despite the long waits, Pollard said demand for the program remains strong.

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“Accelerating [the application process] will only improve the appeal and allow providers a better opportunity to take advantage of the low interest rate environment,” he said.

HUD’s program has been a great asset for small to midsize operators, especially with the lack of available financing from traditional providers like banks.

“While it’s slowly returning, anything that can be done at HUD to reduce the queue is a positive development for the midsize operator,” says Pollard.

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Written by John Yedinak