The Department of Housing and Urban Development has developed a series of support vehicles as part of its COVID-19 assistance program, designed to help its affordable senior housing and healthcare borrowers address their obligations to the agency and also to take care of their residents.
The benefits:
- Suspending monthly deposits to be placed for replacement reserves through July 31, or longer if the authority to grant this benefit is extended;
- Using operating deficit funds to make debt service payments, subject to repayment provisions in the subject escrow agreement;
- Using debt service reserves to meet debt service payments, subject to repayment provisions in the subject escrow agreement;
- Using replacement reserves to meet debt service payments required, so long as the reserve for replacement reserve account does not fall below $1,000 per unit.
“HUD, like many lenders across the United States, realized that they need to support their borrowers and help them get through this terrible time,” noted Cambridge Realty Capital President Jeffrey Davis. “Obviously of great concern to operators is the ability to continue delivering the necessary level of service to residents, and not just maintaining the status quo but also being able to respond to emergent needs that arise due to the COVID-19 virus, which has infiltrated many senior facilities across the country.”
