Having trouble viewing this email? View it as a Web page.

ANNOUNCING NEW EXPRESS LANE FOR SECTION 232/223(F) APPLICATIONS

Dear Section 232 Program Participants,

Today the Federal Housing Administration is announcing that the Office of Healthcare Programs (OHP) is now offering an “Express Lane” for Section 232/223(f) applications that meet certain low-risk criteria. Express Lane applications will have queue priority.

Please read more about eligibility for this program below.

                                                               Sincerely,

                                                               Frank Cassidy

                                                               Principal Deputy Assistant Secretary

                                                               Office of Housing and the Federal

   Housing Administration

About Express Lane Eligibility

The criteria for Express Lane eligibility are listed below.  Note that all criteria (as applicable) must be met to qualify:

• Maximum of 70% loan to value.

• A minimum debt service coverage ratio using unadjusted* trailing 12-month net operating income (including the underwritten reserve for replacement deposit) as follows:
  • 2.0x for the skilled nursing facility portion of the facility
  • 1.6x for the non-skilled nursing facility portion of the facility

* “Unadjusted” is defined as having no modifications to net operating income (e.g. no adjustments for bad debt, management fee, rate increases, etc.)

• The following quality of care attributes (on skilled nursing facilities):
  • Minimum of 2 Star Medicare.GOV Overall star rating, and
  • Minimum of 2 Star Medicare.GOV Health Inspection star rating, and
  • No Red Hand (abuse/neglect) indicator on Medicare.GOV, and
  • No “G” tags or higher in the previous 12 months.

• All identified controlling participants must have no history of FHA insurance claims or defaults (60+ days late) on FHA-insured loans. Prior FHA program experience is not required.

• Not more than 20% of the facility’s revenue can be attributed to a special use.

• The Operator must have been in place at the facility for two or more years prior to the application submission - owner in non-lease situations, and lessee in lease situations.

• The mortgage amount must not exceed:
  • $70 million for the greater New York City area - i.e. five county-level administrative divisions/boroughs: The Bronx, Brooklyn, Manhattan, Queens, and Staten Island plus Long Island and Westchester County), or
  • $50 million for any other area.

• The application must be ready to underwrite and a Firm Commitment decision must be able to be made immediately upon submittal (e.g., no outstanding environmental/previous participation review issues that need to be resolved, not awaiting an OHP Corporate Credit Review to be completed, etc.)

More Information About the Express Lane

Additional information related to the Express Lane is as follows:

• If the lender chooses to request Express Lane processing on an application that is in the 223(f) Queue as of the date of this email, they will email Jennifer Tadlock (Jennifer.M.Tadlock@HUD.GOV) with notification that they would like to utilize the Express Lane processing for the application (please include the project name and FHA number). Lenders may amend applications as needed to meet the Express Lane criteria.  Jennifer will ensure that a Request for Additional Information (RAI) is entered in the Portal so that revised/additional exhibits may be uploaded.

• If the lender determines that a new application meets the above criteria, and chooses to request Express Lane processing, they will email Mike Luke (Michael.D.Luke@HUD.GOV) and Jennifer Tadlock (Jennifer.M.Tadlock@HUD.GOV) indicating that they have submitted an Express Lane application via the Portal (please include the project name and FHA number).

• To speed OHP processing, it is highly recommended that Express Lane applications use electronic APPS (previous participation) and have the HEROS (environmental) entries completed prior to submission in the Portal.

• If OHP determines that the application does not meet the criteria of the Express Lane during its review, the application will be placed in the 223(f) Queue based upon the application submittal date.

• Applications in a portfolio that meet the Express Lane criteria may be processed as Express Lane – assuming any required OHP Corporate Credit Review has been completed. Any application in a portfolio that doesn’t meet the Express Lane criteria will be placed in the 223(f) Queue.  

OHP may modify the Express Lane criteria via Email Blast in the future.

Keywords: Application Processing

Back to top