Despite a federal government shutdown stretching into its third week, skilled nursing owners/operators should continue preparing and filing for HUD loans, which have seen a decline in interest rates over the last month, says Erik Howard, president and COO of Capital Funding Bancorp, Inc. and president, CFG Bank.

Speaking to Mark Parkinson, the former head of the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), on Parkinson’s new web platform, Park Place Live (www.ParkPlaceLive.com), Howard said the shutdown has stopped new loans from being finalized, but not the ability to apply.

“On the front end, the actual processing of loans has stopped, but HUD is closing loans with closings dates prior to the shutdown,” he said. The shutdown started on Oct. 1, so loans with closing dates before then are being finalized.

When asked if providers seeking financing should wait for the shutdown to end before moving on a HUD loan, Howard said “borrowers should keep moving without the ball” working on new loans and getting applications in order.

“You can submit applications right now,” he said, which means getting in the line forming before the loans are processed post-shutdown is key. “You want to submit as quickly as possible,” Howard said.

HUD Loans See Lower Interest Rates

Borrowers will notice lower interest rates when they do apply for HUD financing, driven by the Federal Reserve cutting prime lending rates and other macroeconomic factors, like the world trade battle and related tariff threats, such as between China and the U.S.

Loans that were pegged to rates in the 6 percent level in August are now being locked in in the 5.50 percent range.

Howard said the uncertainty with the shutdown, the interest rate easing by the Fed, and the trade standoffs across the globe lend a “flight to quality” for U.S 10-year Treasury market, which are tied to the HUD lending rates.

“Now is a great time to get applications in [with the rate retreat],” he said.

Questions or comments? Contact Patrick Connole at pconnole@parkplacelive.com.