HUD Introduces Express Lane for Section 232 Applicants

Streamlined review process available to high-performing operators

HUD recently rolled out a new Express Lane option for certain Section 232 mortgage insurance applications a development that could significantly accelerate financing timelines for eligible skilled nursing and senior housing providers. Prior to introducing Express Lane, some Section 232 applications have taken up to 18 months to complete.

The Express Lane, launched by HUD’s Office of Residential Care Facilities (ORCF), is designed for borrowers and operators who meet specific criteria for financial strength, operational stability, and regulatory performance. The goal: to streamline the underwriting process and reduce review times for lower-risk transactions.

What’s Changing?

• Faster Processing: Express Lane applications may be processed in 30 to 60 days down from the standard 90 to 120 days.
• Simplified Submission: Fewer documentation requirements for eligible applicants.
• Performance-Driven: Operators with multiple well-performing facilities are more likely to qualify.

To apply, lenders must submit an Express Lane certification affirming that the borrower meets all eligibility criteria.

What Are the Criteria to Qualify?

Included among the criteria are the following:

• A maximum of 70 percent loan to value;
• Limits on the allowable minimum Debt Service Coverage Ratios;
• Specific quality of care attributes;
• The facility operator must have been in place at the facility for two or more years prior to the application submission;
• The mortgage amount must not exceed $50 million ($70 million for the greater New York City area); and
• The application must be ready to underwrite and a Firm Commitment decision must be able to be made immediately upon submittal.

What This Means for You

While this initiative doesn’t change audit or compliance requirements under HUD guidelines, it does underscore HUD’s increased focus on operator performance and financial transparency areas where our firm provides ongoing guidance and assurance.

Operators considering refinancing or expansion under Section 232 should assess their eligibility for Express Lane treatment. Strong financial controls and audit readiness will continue to play a critical role in qualifying for streamlined programs like this.

If you have questions about your financial reporting requirements or how this may affect your audit timeline, please reach out to the HUD team. We’re happy to discuss how the new Express Lane may fit into your strategic plans.

Beth Reimer breimer@peasebell.com

Lindsay Arcuri larcuri@peasebell.com

Joel Ungar jungar@peasebell.com

For more information, visit hud.gov/healthcare or contact your engagement team.