MidCap Financial Ups Senior Housing Game by Acquiring HUD Lender

MidCap Financial, a speciality finance firm that has provided debt solutions to a broad array of senior housing companies, has added an FHA lending platform for the first time by acquiring Pineview Capital Group. The transaction comes at a time when FHA transactions are expected to be on the upswing.

Bethesda, Maryland-based MidCap Financial is focused on the middle market and had about $8 billion of commitments under management as of January 2016, according to the company website. Aspen Village Senior Living & Memory Care Community, ROC Seniors, and Elmcroft Senior Living are among the clients to do transactions recently with the firm’s health care real estate lending arm.

MidCap Financial already offers financing for first mortgages, refinance and recapitalization, and acquisitions, as well as mezzanine financing, and now adds Pineview Capital’s capabilities in financing through the Federal Housing Administration (FHA), including the LEAN program, which provides insured mortgages for senior housing communities. This expands MidCap’s profile as a “single point of contact for borrowers through their full life cycle,” the firm emphasized in a prepared statement issued last Friday.

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“The Pineview acquisition will enable MidCap to deliver the full suite of products to the senior housing sector with working capital and term debt to finance operations, as well as bridge loans and FHA permanent loans for the real estate component of the business,” stated Kevin McMeen, real estate president of MidCap Financial Services LLC.

The move comes as LEAN financing is poised to become more accessible to senior housing borrowers. Looser seasoning timeframes and newly allowable financing purposes, such as in partner buyouts, are among the draft revisions floated last month by the Department of Housing and Urban Development (HUD), the FHA’s parent agency.

The changes, which are expected to become effective, should increase HUD lending to senior housing borrowers, according to industry experts.

MidCap Financial will be a “long-needed balance sheet partner” enabling Pineview to increase its lending capabilities, according to the Denver-based firm’s president, Brett Patrick.

“This is a tremendous opportunity for Pineview to not only expand our existing client base but to also significantly grow our FHA lending platform,” he said in a prepared statement.

Financial terms of the transaction could not be disclosed, MidCap told Senior Housing News. The deal is expected to close on or around Sept. 1, 2016.

Written by Tim Mullaney

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