The latest HUD loan closing rates are around 5.40 percent, steady from last month, and indicative of a more positive rate environment for skilled nursing operators looking to secure financing, according to the Park Place Live monthly check-in with Erik Howard, president and COO of Capital Funding Bancorp, Inc. and president, CFG Bank.

The latest closing rates are continuing a trend for softer rates brought on by the performance of the 10-year Treasury market and Federal Reserve easing, he said.

“[The rates] have really come down over the last six months,” Howard noted. And those SNFs locking in loans at the now-lower rates will be able to enjoy the savings now and have a competitive edge in the market.

“You may be at a competitive disadvantage to an operator down the street who was able to lock in at 5.40 percent, and you don’t have to worry about refinancing that loan for another 10-15 years. And as we discussed, if the rates down go down over the next year or two, you always have an opportunity to lower that,” he said.

The volumes of HUD loans, called Section 232 loans, have been rising with the Federal Housing Administration (FHA) saying the program enjoyed a “landmark year” in fiscal year 2025, issuing a new record of $8.1 billion in firm commitments and closing $6 billion in mortgages for some 337 loans for residential care facilities.

FHA insures mortgages for SNFs, assisted living communities, board and care homes, and intermediate care facilities under Section 232 of the National Housing Act. Last year’s loans dwarfed the $4.1 billion in Section 232 firm commitments approved in FY 2024.

See more on the FHA news at https://tinyurl.com/9jws4s6x

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