Cambridge Realty Capital Vice President Zach Scardina has some advice for senior living owners/operators who are watching the market for the opportune time to refinance: be proactive. “Borrowers who wait until interest rates drop to initiate the refinance process might find that the window of opportunity has already closed. Decisive action should be taking place now, not in 12-18 months, when interest rates may potentially become more favorable, and the market becomes saturated and increasingly competitive.”
Scardina recommends starting sooner rather than later, even while interest rates are elevated, in order to forge the relationships necessary to garner the most favorable loan terms. “Conventional lending remains tight, necessitating a proactive approach from borrowers to allow all financing options to be explored with lenders,” Scardina explained. “This may include HUD and GSE lenders for the stabilized communities in your portfolio. Refinancing the debt from your existing lending relationships into permanent mortgage solutions can help free up your lender’s capacity needed to finance your future projects.”
“HUD 232 financing offers borrowers a sense of security with its 35-year fully amortizing first mortgage loan. While the HUD process may entail longer timelines compared to conventional lenders, the benefit of the lowest rates and longest amortization enhances the likelihood of a successful closing.”
“It is never too early to explore financing options, and preparation is key to securing the optimal loan,” Scardina noted. He urges those who are looking at refinancing in the near future, even if it’s a year or more down the road, to get in touch with a senior housing and skilled nursing finance expert to discuss their options. “It’s important to sit down and assess your needs and come up with the ideal timeline to procure the financing you need when you need it.”
