In the midst of a global COVID-19 pandemic and a shutdown of many businesses in the country, the FHA multifamily and healthcare businesses are continuing to provide HUD funding to property owners in need of capital. The combination of favorable interest rates not seen since 2011 in the HUD space as well as the sudden shock to the financial system as a result of social distancing measures brought on by COVID-19 have caused borrowers to flock to the safety and security of HUD insured financing.
According to Pat Burke, Acting Director of Multifamily Production at HUD, “Application numbers and endorsements are actually up significantly” when compared to last year and this is true for us as well. Berkadia’s pipeline is larger than at any time in its history and there has been no pause in the pace of new transactions nor in the pace of deals getting approved by HUD.
Of course, many of the multifamily deals we’ve closed most recently, including $3.82 million in HUD financing in the form of a 241(a) supplemental loan for a memory care campus and $17.89 million in financing secured for Greyhawk Townhomes in Layton, Utah, have been in the works since prior to the onset of many of COVID-19 measures impacting us currently. However, we continued to engage and submit new deals to HUD at a record pace.
What’s Next for HUD Financing in Multifamily
As we go forward, it is clear that the team at HUD takes its responsibility to maintain liquidity in all markets seriously. The department has put in place some commonsense measures, including debt service reserves for refinances, and is taking a prudent approach to construction timelines and markets.
HUD’s mission to create strong, sustainable, inclusive communities and quality affordable homes for all has never been more vital and we’ve never been more motivated to put our HUD expertise to work on behalf of clients.
–Steve Ervin, Head of FHA Financing