HUD Introduces ‘Express Lane’ to Speed Up Financing for Care Facilities

In a move designed to improve access to essential services for vulnerable Americans, HUD Secretary Scott Turner has announced the launch of a new “Express Lane” aimed at speeding up the application process for insured refinances under the FHA Section 232/223(f) Mortgage Insurance for Residential Care Facilities program. This new initiative targets skilled nursing, assisted living, and board-and-care facilities, offering a faster and more efficient pathway to secure critical funding.

Reducing Delays and Streamlining Access to Vital Services

“The new Express Lane will drastically cut processing times and make essential financing more accessible,” said Secretary Turner. “By eliminating unnecessary delays, we are empowering healthcare providers to better serve Americans who rely on these facilities for care.”

Previously, FHA’s Section 232 application process could take up to 150 days to evaluate and approve. Under the new procedure, however, eligible transactions will be fast-tracked, with approvals now expected in just 10 to 15 days a significant reduction in processing time of up to 90%.

“This is about making sure that the federal government moves quickly when it comes to providing the support that care facilities need to continue their vital work,” Turner added. “Under President Trump’s leadership, we are cutting through the red tape that has hindered care facilities from accessing the financing they need to help our most vulnerable citizens.”

Criteria for Express Lane Processing

To ensure the expedited process is used effectively, FHA has outlined specific criteria for transactions eligible for Express Lane processing. These include:

• A maximum loan-to-value (LTV) ratio of 70%
• Minimum Debt Service Coverage Ratios (DSCR) requirements
• A track record of quality care at the facility
• The facility operator must have been in place for at least two years before applying
• The mortgage amount must not exceed $50 million (or $70 million in the greater New York City area)
• The application must be fully prepared for underwriting, ensuring a Firm Commitment decision can be issued immediately upon submission

This streamlined procedure is designed for low-risk, low-leverage transactions, ensuring that only those most likely to meet FHA’s criteria for success benefit from the faster processing timeline.

Impact on Residential Care Facilities

The FHA’s Section 232 program is crucial for financing the acquisition, refinancing, and rehabilitation of residential care facilities, including nursing homes and assisted living institutions. FHA-approved lenders nationwide are eligible to participate in this program, which helps provide the financial resources needed to improve care facilities across the U.S.

This new Express Lane procedure will allow lenders and facility operators to access funds much more quickly, which is especially important in the context of ongoing challenges in the healthcare sector, where timely access to capital can be a lifeline for facilities struggling to maintain operations or make necessary improvements.

A Bold Step Towards Efficiency

The new initiative comes at a critical time as the demand for residential care services continues to grow with an aging population. By removing bureaucratic obstacles, HUD is helping ensure that care facilities can focus more on providing quality services rather than dealing with lengthy approval processes.

“This new procedure will expedite the financing process, allowing care facilities to access the capital they need to continue operating and growing, ultimately benefiting the residents who depend on these services,” HUD concluded in a recent post.

With the Express Lane in place, it’s clear that HUD is taking a more proactive approach to supporting the care facilities that serve our most vulnerable populations, bringing a much-needed infusion of efficiency and accessibility to the healthcare finance sector. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.