HUD Lean Volume Hits an All-Time High

The HUD LEAN program had quite a fiscal year 2019, topping $3.7 billion in transaction volume across 288 transactions. The transaction number may be 1% down from the 292 closings in FY2018, but the dollar volume is up 3.6% to reach a record high for the program. HUD used to be the “lender of last resort,” but given the attractiveness of the debt (where else can you get a sub-3% rate for a 30+ year term?), it’s no wonder the program is growing like gangbusters.

ORIX Real Estate Capital/Lancaster Pollard put their combined resources to work this year, closing an impressive $903.8 million in HUD closings, with 78 total transactions. That kind of dollar volume hasn’t been seen before, even when Lancaster Pollard also topped the rankings last year with 70 closings and $619.1 million in volume. LP did have 79 transactions closed during HUD’s FY2017, so we knew they could hit that mark again. Very impressive.

Greystone followed LP in both closings (35) and volume ($592.4 million). That follows just 20 transactions and under $300 million in volume in FY2018, so it was a very good year for Greystone. Rounding out the top-five lenders this year were KeyBank ($431.2 million across 34 transactions), Capital Funding LLC ($394.8 million across 33 transactions) and Housing & Healthcare Finance ($336.4 million across 26 transactions).

Berkadia closed the largest deal, which actually accounted for more than 50% of its total volume for the fiscal year. It was a $104.27 loan arranged for a 524-bed skilled nursing facility in the Bronx. M&T Realty Corp. closed the next-largest transaction: a $79.5 million loan for a 450-bed SNF in Blackwood, New Jersey. Greystone also had a couple of the largest closings, including a $78.5 million loan for a 588-bed SNF in Woodbury, New York and $71.8 million that went to a 475-bed SNF in the Bronx.

 

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