​This section provides an overview of the Section 232 Loan process including  eligibility requirements, loan sizing estimates, finding a HUD approved lender and HUD application timeline and post-closing requirements. A critical piece of the HUD loan process is finding the right lender as only HUD LEAN lenders can submit applications.  LEAN is the method of processing HUD Section 232 applications developed in 2008 based on Toyota’s model to decrease waste and enhance efficiency that employs standardization in work product and processes.

 1. Eligibility

  • ​Licensed senior housing and long-term care facilities, licensed skilled nursing, assisted living, and board and care facilities are eligible for HUD LEAN 232/223(f) financing.
  • All profit, non-profit, and public borrowers are eligible.
  • In order to be eligible for a HUD loan, the residence must provide continuous or skilled nursing care for at least 20 patients, independent living cannot occupy more than 25% of the facility, and commercial space cannot exceed 20% of income or facility space.
  • No upfront entrance fees can be charged to residents.
  • The types of HUD loans that are available for eligible borrowers include i) Refinance/Acquisition ii) New Construction iii) Substantial Rehabilitation iv) Supplemental Loans (requires existing HUD-insured primary mortgage)
  • FAQ’s on eligibility, more information can be found at https://www.hud.gov/federal_housing_administration/healthcare_facilities/residential_care/knowledgebase

 2. Loan Sizing Estimates

Our Loan Calculator is available to assist owners in estimating their loan and monthly payment based on specifics of the property.

 3. Finding a Lender

  • Finding the right lender is critical as your lender is a key partner through the entire HUD loan process and throughout the term of the loan.  Lenders advise potential borrowers, submit applications and are the primary communicators with HUD. 
  • Lenders need to be FHA Approved Lenders for the Section 232 program.  A list of FHA Approved Lenders are available on the HUD site.
  • To find top lenders in the long-term care industry, please visit the recent closing page (hyperlink). You can directly contact these providers for more detailed information on your specific HUD loan.

 4. Application Process

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 5. Post-Closing

Post-closing requirements include:

  • Submission of an annual audited financial statement within 90 days of the close of the fiscal year by the property owner 
  • Submission of quarterly financial statements
Please read our Post-Closing FAQ for more information.
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