Lean Processing: Major Changes to FHA Section 232 Program Are Here
FHA recently made two major changes to its Section 232 mortgage insurance program that will significantly improve application processing and loan closing times and lead to considerably more user-friendly policies and loan administration practices.
Effective July 1, FHA adopted the "Lean" management process, developed by Toyota, to simplify the application process and to further streamline the review time beyond the scope of the successful Multifamily Accelerated Processing (MAP) program. Under Lean processing, applications will be filed electronically, feature fewer exhibits and require "conventional", market-based appraisals. The goal of Lean processing is to review an application, issue a commitment and get to closing within 40 days. FHA developed the Lean program in their Seattle Office, and the results were reportedly spectacular - it took a test case roughly three weeks to go from application submission to loan closing!
The Lean processing is part of FHA's broader effort to reorganize the Section 232 program to make it more efficient and responsive to the needs of the senior housing and healthcare community. Also effective July 1, FHA's Office of Insured Healthcare Facilities (OIHF), based in Washington, DC and with jurisdiction over the Section 242 hospital mortgage insurance program, became responsible for Section 232.
By moving the Section 232 program to the OIHF and expanding that office's professional staff with individuals experienced in healthcare development, finance, operations and management, FHA believes it created a unified single-source for healthcare and senior housing program and policy development, and going forward, a more consistent and user-friendly platform for borrowers, lenders, and operators.
Contact us for more information on what promises to be one of the most significant developments at FHA in years.
As the CFO of a hospital chain, I engaged Bedford Lending to reposition a closed hospital. They worked closely with the board of directors and developed a plan to convert the hospital to an assisted living and memory impaired facility. BLC worked with the contractor, market specialist and architect to develop a solution and then funded the loan through a combined HUD/tax exempt bond loan. They are true professionals."
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