Commercial Investment Real Estate May/June 2019 | Page 17

and health care projects such as hospi- tals, assisted living facilities, and nursing homes. The investment makes the most sense for borrowers who intend to hold on to the property for a longer term (usually five years or more). These programs are not for everyone. As with most government programs, the time to close an insured loan is typically longer than a conventional loan due, in part, to HUD’s limited resources to process applications. Many FHA lenders, however, offer bridge loan solutions for borrowers that need a temporary loan while waiting for FHA financing to close. Additionally, in past years, large bor- rowers — those with at least $500 million in FHA-insured loans — were subject to additional scrutiny due to the perceived risk that such a concentrated insured-loan balance created. Recently, though, HUD recognized the value of these large borrowers and has made efforts to streamline procedures for assessing centralized risk and make the credit Because FHA lenders are supported by the government guarantee, they can offer low interest rates regardless of location, leverage, or property type. approval process less complicated. For example, HUD increased the length of the credit approval from one year to two. As such, applications for future insured loans within the two-year approval period will see a quicker turnaround time. Prior to this streamlined procedure, large bor- rowers were required to undergo lengthy approval processes for each project, but they can now save as much six months of processing time. Not all lenders are authorized to under- write and service FHA loans. Care- ful consideration should be taken when choosing an FHA lender because their experience and relationship with HUD can be invaluable during the closing and servicing process. Bonnie Hochman Rothell is a partner focusing on litigation at Morris, Manning & Martin, LLP. Contact her at bhrothell@ mmmlaw.com. Jessica Rodriguez is an associate with Morris, Manning & Martin, LLP. Contact her at [email protected]. Join CCIM Institute and STDB at RECon May 20−22, 2019 Members can use the CCIM booth to meet with clients at the world’s largest retail real estate convention. LOCATION Las Vegas Convention Center Las Vegas New Booth Number: C1042 For more information, visit www.ccim.com/recon CIREMAGAZINE.COM May | June 2019 15