Columbus, Ohio-based Lancaster Pollard ranks as the most productive lender affiliated with the U.S. Department of Housing and Urban Development’s LEAN program, designed to provide financing to seniors housing properties.
HUD recently announced that its LEAN mortgage insurance program set a new record for its 2012 fiscal year ending Sept. 30, shattering the previous record set last year of $3.29 billion by more than 66 percent.
A total of 706 loans were closed totaling $5.47 billion, making the LEAN program the largest single source of debt capital to the seniors housing industry. Forty-eight lenders closed loans within the program, but the largest volume of activity was generated by Lancaster Pollard, which closed 98 loans in 26 states totaling $738.6 million or 13.5 percent of total program volume.
“A combination of factors are driving the enormous volume of activity through the HUD program,” said Brian Pollard, senior managing director of Lancaster Pollard. “Certainly, the historically low rate environment has been the primary driver of demand because no other funding source better captures the benefits of this rate environment. But there have been other contributors as well, including improved timing of the HUD process and continued depressed activity by many of the traditional lenders to this space.”
According to Pollard, the HUD LEAN program and its personnel deserve much of the credit for the success of the program in recent years. The program, which was developed during 2008, has truly improved the underwriting, application and post-closing loan surveillance process. Consistency and timeliness, always concerns of prior years, have improved dramatically under LEAN.
“This isn’t your dad’s HUD program and the improvements under LEAN have made HUD a legitimate first stop for capital to providers of all sizes,” Pollard said. “HUD is listening to their stakeholders and providing meaningful responses. One such example is their decision to hire private sector subcontractors to process applications in an attempt to reduce the size of the backlog of applications waiting for HUD review (the “queue” as it became known), which has worked better than most could have imagined.”