In an effort to summarize the highlights of the U.S. Department of Housing and Urban Development (HUD) LEAN E-mail Blasts that we receive, and rarely have time to review in a timely fashion, we at Pepper are providing this quick synopsis of the latest LEAN update. Our aim is to provide pertinent information succinctly as a roadmap to the LEAN E-mail Blasts, not to replace the LEAN E-mail Blasts. We hope you find these summaries helpful. A link to the complete October 25, 2013 LEAN E-Mail Blast can be found here.
Post Shutdown Update for Industry Partners and Other Stakeholders
The Office of Residential Care Facilities (ORCF) hopes to return to normal operations within the next 30 to 45 days. ORCF will first assess the number of applications received during the shutdown and load the new projects into the system. ORCF staff is also focusing on issuing commitments on the 46 carryover projects ($278.6 million) from last fiscal year.
Lenders have been contacted to confirm viability of the loan prior to issuance of the commitment.
Meanwhile, regular loan committees will resume on October 29 on a first-come, first-served basis, depending on the location of the application within the respective queues. Please note that the prioritization criteria have been eliminated. ORCF will continue to hold national loan committees three days per week (Tuesday, Wednesday and Thursday). ORCF does not expect long delays in HUD Closer assignments and will continue to use ORCFCloser@hud.gov to trigger the HUD Closer assignment.
Additionally, the due diligence contract has been renewed. Contract underwriters will be assigned either 223(a)(7) or 223(f) applications, as needed.
ORCF will post updates on the closing queue weekly.
Prior to the shutdown there were more than 237 outstanding Asset Management requests pending approval. These Asset Management requests included escrow draws, TPAs, Operator Changes, Loan Modifications, along with other transactions requiring HUD approval. Asset Management staff will prioritize time-sensitive requests (non-critical repairs, initial operating deficit, reserve for replacement) and respond as soon as possible. Please call your account executive if you have a specific request to discuss.
On the policy side, ORCF staff is working to finalize the Intercreditor Agreement, the 232 Handbook, and the Asset Management Document Implementation reference grid. Updates on these topics will be noted in future e-mail blasts.
2013 Fiscal Year in Review
The fiscal year ended with 806 firm commitments issued for $6.4 billion, compared to 792 firm commitments in FY 2012. ORCF carried more than 46 commitments for $278 million that were approved in FY 2013, but held over due to lack of commitment authority. The low-interest-rate environment continued through FY 2013, resulting in 522 commitments issued under the 223(a)(7) program. Additionally, ORCF was able to insure 250 loans under 223(f) and 34 new construction and other loans. The closing team was able to close 766 projects this past year, compared to 706 projects in FY 2012.
The Asset Management team processed more than 3,340 escrow draw requests, 115 TPAs, 70 change of operator or lease terms requests, and many other transactions requiring HUD approval.
Additional statistical information on ORCF applications received, commitments issued and endorsements, as well as fiscal year end reports, are available here.