Senior Housing HUD Lending Volume Rises 20%

The U.S. Department of Housing and Urban Development’s (HUD) Lean financing program for senior housing is back in a strong way.

The program, which insures senior housing mortgages and other types of lending, closed a loan volume of $3.4 billion during the fiscal year that ended Sept. 30, 2017, according to HUD data cited by Columbus, Ohio-based Lancaster Pollard. That’s a roughly 20% increase over last year’s loan volume of $2.84 billion.

During that period, 35 different lenders closed a total of 310 loans, an 8% increase compared with 2016’s total of 287.

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Lancaster Pollard led all lenders in transactions closed and total loan amount, at 79 and $769.3 million respectively. The company was responsible for 23% of this year’s total activity and has been the top HUD Lean lender since 2010.

Lancaster Pollard

In September, Lancaster Pollard was acquired by ORIX USA, a division of international financial services group ORIX Corporation. ORIX also owns RED Capital Group, the no. 7 Lean lender during the latest fiscal year.

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Lower long-term interest rates may have played a role in this year’s gains, according to Kass Matt, president of Lancaster Pollard.

“Once again, many expected a gradual rise in long-term interest rates as the year began, and once again, it never materialized,” Matt said in a statement. “Rates continue to remain below historical averages, and seniors housing and care providers continue to take advantage.”

Though senior housing financing from HUD’s Lean mortgage insurance program has dipped dramatically in years past, it appeared to have reached a turning point last year when HUD changed its eligibility rules, driving renewed interest and discussion among lenders.

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“We expect a strong fourth quarter here at Lancaster Pollard and we expect that momentum to carry over into 2018 and only accelerate,” Lancaster Pollard CEO Nick Gesue told Senior Housing News.

Written by Tim Regan

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