Financing Nursing Homes And Assisted Living Facilities with the new LEAN Program

Many owners of nursing homes and assisted living projects have long preferred traditional bank lenders. However, the significant losses from the subprime meltdown—more than $500 Billion—have changed the rules and the ability of traditional lenders to finance loans. Most analysts project additional losses in the near future along with significant losses in automobile loans and credit card loans, which means conditions will become worse before they get better.

These losses force banks and financial institutions to seek capital to supplement their depleted base. Without a sufficient base, banks and financial institutions are unable to make new loans. Despite the infusion of cash from the Treasury, credit has not loosened. The projected size of current and future losses bring into question whether banks and financial institutions have the ability to raise the necessary additional capital and whether or not they will be making many loans in the near future.
The first type of loans that banks will cease making will be loans to nursing home and assisted living providers. Health care is a specialized market, and the number of banks willing or able to make these loans will diminish and the lending terms may become far more onerous. When Letters of Credit come due, banks will not have the ability to renew them.

Therefore, traditional, conventional financing in the near future is all but gone for practical purposes. Fortunately, FHA is rolling out their new LEAN program just as traditional bank and financial company financing is becoming more difficult. FHA recently reengineered its lending program for nursing homes and assisted living facilities by transferring the responsibility to the Office of Insured Health Care Facilities. This transfer has resulted in “THE LEAN PROGRAM,” FHA’s new way of doing business.
This new program addresses the most frequent complaints FHA lenders and facility owners have had with traditional FHA processing: the lengthy processing time, the inconsistent answers, and an inability to complete transactions in a consistently reasonable time frame. The new program promises the ability to close a transaction within thirty days of the day the lender files its application for mortgage insurance.
FHA now not only has a program that is—and always will be—available, offers fantastic terms, but also has the ability to deliver the financing with a rapid turn around, without the previous FHA headaches.

We have over 45 years experience dealing with FHA, and can help you through every step of the way. Each development is unique, of course, and we can help you determine your specific needs and determine the best way to achieve your objectives.


Please call or email us at your earliest convenience.

Very truly yours,


Charles E. Kendall