The Committee on Health Care Financing, of which Sims Mortgage Funding, Inc. has been a longstanding member, held its annual meeting on June 24 and 25 in Washington, DC. The Committee is a national trade association of mortgage and investment bankers who provide financing for health care and senior housing projects using FHA’s Section 232 and 242 (hospital) mortgage insurance programs.

The Committee’s annual meeting historically has provided its members with excellent access to senior FHA officials responsible for health care financing. This year was no exception, as senior management from the Office of Insured Health Care Facilities (OIHCF) was present during the two-day event. They reported that the long-awaited Section 242 hospital refinancing program would be operational in July. Until now, the only way a hospital could access Section 242 mortgage insurance to refinance its existing indebtedness was by also using 20% of the new loan proceeds towards renovations or additions. Now, “pure” refinances of existing hospital debt are possible pursuant to this notice. The timing of this notice is excellent as many hospitals are having difficulty refinancing existing debt at competitive interest rates. Additional information on this program will be available shortly on http://www.simsmortgage.com/.

OIHCF senior management also reported that the Section 232 Lean processing program continues to develop, albeit at a slower pace than projected, largely on account of staffing shortages. As a result, Lean managers are trying to further streamline their processing protocols to enable fewer underwriters to handle the workload until such time as additional personnel can be hired. The OIHCF is also trying to compensate for reduced staffing by focusing its underwriting efforts on clean, straightforward and conservatively-underwritten transactions; lenders who intend to finance more complicated credits or unusual (but otherwise eligible for Section 232 insurance) projects currently will not find the Lean program as efficient.

For a better read on the types of projects that are likely to be good candidates for Lean processing, please contact our Lean approved underwriters, Anthony Luzzi or Kerrie Tomasiewicz .