Yet another ripple effect touching the assisted living market: the availability (or lack thereof) of capital to finance new construction.
Fannie Mae has a solution though, according to a report from AllAssistedLivingHomes.com. The financial giant is offering a new loan product that “allows companies to borrow on a seven-year note, but make lower monthly payments like it was a thirty-year note (the more traditional route for conventional homeowners).”
Officials at the Department of Housing & Urban Development (HUD) are hopeful that the new loan will alleviate some of the backlog in pending financing requests, providing the necessary funds (even if just near-term), for real estate developers to begin new assisted living projects. Eventually, developers must address the need for long-term funding, but the Fannie Mae loan has been designed to jumpstart new projects in the interim.
The article suggests that, given the demographics, more loan companies will follow Fannie Mae’s lead, making similar special financing options for assisted living operators a priority.