HUD and REITs

Healthcare financing for skilled nursing facilities has been undergoing significant shifts since COVID bailouts; the growth outlook has improved and approval of government-backed loans is expected to rise in the coming months.

The Department of Housing and Urban Development’s (HUD) lending in the skilled nursing space for loans requires that facilities meet certain standards and achieve a delicate balance between regulatory changes, financial stability, and the demand for quality care. HUD Senior Living financing program lending volume has increased in fiscal year 2024, potentially reaching pre-pandemic levels, which could indicate improved financial stability for nursing homes.

The lending environment will likely heat up over the course of 2024, particularly for skilled nursing providers willing to explore new relationships when unable to tap traditional sources.

More money will hopefully bring more oversight for safety and to deter waste, fraud, and abuse of taxpayer monies.

Regardless of where they’re operating, nursing homes will continue to attract loans because it is an extremely profitable industry. Increased adjustments in Medicaid rates will make nursing home operations even more financially viable.

Ari Adlerstein, co-head of senior housing and healthcare for Meridian Capital Group, recently said:

“Our industry just has tenacity. We manage to get through it and figure out a way. Most importantly, it’s needs-based, and we’ve got to keep it going because there’s no better option.”