The Department of Housing and Urban Development (HUD) processed nearly $5.5 billion of senior housing loans in 2012 through its Section 232 LEAN program, with volume skyrocketing more than 66% above last year's $3.3 billion record.
The HUD LEAN program offers funding for the acquisition, refinance, substantial rehabilitation, and new construction of various kinds of senior living properties.
Section 232 is an FHA-Insured loan product that covers housing for the frail elderly - those in need of supportive services. Nursing homes, assisted living facilities and/or Alzheimer's-care, and board and care are all examples of this type of housing (a project may include more than one type).
Section 232 may be used to finance the purchase, refinance, new construction, or substantial rehabilitation of a project. A combination of these uses is acceptable - e.g. refinance of a nursing home coupled with new construction of an assisted living facility.
HUD's LEAN program became the largest single source of debt capital to the senior housing industry.
HUD LEAN is based on the Toyota manufacturing philosophy, which focuses on efficiency and continuous improvement in an effort to eliminate waste and unnecessary people, steps, or other activities. For HUD, the approach is an effort to continually streamline and improve upon the application and approval process for its senior living/health-care programs.