Transcript Generated by AI 00:01 Hey, 00:02 Mark Parkinson back with Park Place, 00:03 and we're here with Eric Howard from Capital Funding Group for our January, 00:07 February 2026 00:10 HUD rate 00:11 update. 00:11 And Eric, 00:12 welcome back to the website. 00:14 Thanks, 00:14 Mark. 00:14 Appreciate it. 00:15 Glad to be here. 00:16 And 00:16 it's great to get a report from you every month. 00:18 So let's just get straight to it. 00:20 At what interest rate are HHUD loans closing at right now? 00:24 So, 00:24 uh, 00:24 if you were to lock a HUD rate today, 00:26 Mark, 00:27 you're probably just below 5.4%. Um, 00:30 that number has, 00:31 uh, 00:31 has continued to come down over the last, 00:33 call it, 00:34 uh, 00:34 six months. 00:35 Uh, 00:35 we were relatively flat in terms of loans that closed in December. 00:39 Uh, 00:39 relative to November, 00:41 where the rates, 00:41 uh, 00:41 on average were about 5.7%, 00:44 5.8%. 00:45 So, 00:45 uh, 00:46 we, 00:46 we've, 00:46 uh, 00:46 we've picked up some basis points here and, 00:48 um, 00:49 and, 00:49 and continue to look good at, 00:50 at again, 00:50 5.4%. 00:52 Uh, 00:52 5.4% is an incredible rate. 00:54 I wish I would have had that back when we had our buildings. 00:57 Uh, 00:57 what has it been? 00:58 What, 00:58 where, 00:59 where was it, 00:59 you know, 01:00 in the last year, 01:00 what have some of the higher rates been? 01:03 So, 01:03 as we've discussed briefly in the past, 01:05 you know, 01:05 there's some volatility around these rates, 01:07 in particular as it relates to the 10-year treasury. 01:09 But when you go back uh to probably May of last year, 01:13 we were as high as 6.2% uh in terms of where, 01:16 where rates were locking. 01:17 So, 01:17 uh, 01:18 if you would have started your process then, 01:20 um, 01:21 that, 01:21 and, 01:21 and gotten into the queue, 01:23 gotten through processing, 01:24 even given the governmental shutdown, 01:26 you'd be in a great position here today to be locking rates around 5.4%. 01:30 Well, 01:30 I mean, 01:30 5.4, 01:31 folks have the ability to, 01:32 to lock in now at that rate, 01:34 it feels to me like they should. 01:36 The, 01:36 the market, 01:37 how has the market responded to this? 01:38 What's going on with HUD volume? 01:40 So, 01:40 volume has been at historic levels, 01:42 Mark, 01:43 and, 01:43 and really, 01:44 uh, 01:44 the, 01:44 the use of the program has continued to accelerate, 01:46 uh, 01:47 as we've discussed again over the last handful of months. 01:49 Uh, 01:50 the administration's really done some unique things in terms 01:52 of trying to make the process more efficient. 01:54 And so, 01:55 it's really a dynamic that uh if you're not using the program, 01:58 uh, 01:59 you're, 01:59 you may be at a competitive disadvantage to, 02:01 uh, 02:01 to an operator or an owner down the street who's now locking at 5.4%, 02:05 doesn't have to worry about refinancing that loan for another 10 or 15 years. 02:09 And, 02:09 uh, 02:09 as we've discussed, 02:10 if rates go down here over the next year or two, 02:12 you always have an opportunity to lower that. 02:14 So, 02:15 Uh, 02:15 program, 02:16 uh, 02:16 interest and volume has been fantastic, 02:18 and, 02:18 uh, 02:18 we're seeing great, 02:19 uh, 02:20 great use, 02:20 uh, 02:20 in terms of, 02:21 uh, 02:21 operators and borrowers coming into the program. 02:23 Well, 02:24 Eric, 02:24 thanks for the great news. 02:25 I mean, 02:26 a 5.4% rate forever, 02:28 non-recourse. 02:29 I don't know why anybody wouldn't do it. 02:30 And the point that Eric makes is a really valid one. 02:32 If you don't and you're stuck at 7 or, 02:34 or higher. 02:35 You're trying to compete against somebody whose money is 02:37 a lot cheaper and in the long run, 02:39 that is very hard to do. 02:40 Eric, 02:41 thanks again for the great news and uh we appreciate everybody watching this. 02:45 Thank all of you for your support of Park Place.
