The “Express Lane” is now open for Section 232/223(f) applications that meet certain low-risk criteria, the Department of Housing and Urban Development’s Office of Healthcare Programs has announced. 

Qualified applications will receive queue priority, according to Frank Cassidy, principal deputy assistant secretary of HUD and the Federal Housing Administration.

“By prioritizing applications that demonstrate financial stability, operational consistency, and regulatory compliance, HUD is streamlining support for lower-risk facilities,” Greystone reported.

Among qualifications for the special consideration, applications must have a maximum 70% loan-to-value ratio and high debt service coverage ratios. Skilled nursing facilities must have a minimum two-star overall star rating from the Centers for Medicare & Medicaid Services, a minimum two-star health inspection star rating, no abuse/neglect indicator and no “G” tags or higher in the previous 12 months.

No applicants for the special initiative can have a history of FHA insurance claims or defaults of 60 days or more on FHA-insured loans. HUD noted that prior FHA program experience is not required for Express Lane eligibility.

Further, the operator must have been in place at the facility for two or more years before submitting an application.

“This new program means that lowrisk transactions with certain metrics can access funding more expediently than ever before,” Cambridge Realty Capital Vice President Zachary Scardina said in a blog post.

He said that awaiting an underwriter at HUD could take “weeks to months” before this new program was introduced.

“Essentially, the Express Lane program allows for pre-screening of applicants, moving those who meet the Express Lane program criteria to the front of the queue,” Scardina said. “This new program will reduce the overall waiting time for qualified 232/223(f) HUD applicants and make HUD funding more appealing than ever.”

For additional application criteria, read the full HUD bulletin here. Note that all criteria (as applicable) must be met to qualify.