FHA recently announced that it will be making two major changes to its Section 232 mortgage insurance program that will significantly improve application processing and loan closing times and lead to considerably more user-friendly policies and loan administration practices.

Effective July 1, FHA will be adopting the “Lean” management process, developed by Toyota, to simplify the application process and to further streamline the review time beyond the scope of the successful Multifamily Accelerated Processing (MAP) program. Under Lean processing, applications will be filed electronically, feature fewer exhibits and require “conventional”, market-based appraisals. The goal of Lean processing is to review an application, issue a commitment and get to closing within 40 days. FHA developed the Lean program in their Seattle Office, and the results were reportedly spectacular – it took a test case roughly three weeks to go from application submission to loan closing!

Two of our senior personnel – Anthony Luzzi and Kerrie Tomasiewicz – will be among the first lenders to undergo Lean training with HUD staff in Seattle next week. Our participation will ensure that Sims Mortgage Funding, Inc. will be among the first to be approved to submit applications under the Lean program.

The Lean processing is part of FHA’s broader effort to reorganize the Section 232 program to make it more efficient and responsive to the needs of the senior housing and healthcare community. Also effective July 1, FHA’s Office of Insured Healthcare Facilities (OIHF), based in Washington, DC and with jurisdiction over the Section 242 hospital mortgage insurance program, will become responsible for Section 232.

By moving the Section 232 program to the OIHF and expanding that office’s professional staff with individuals experienced in healthcare development, finance, operations and management, FHA believes it can create a unified single-source for healthcare and senior housing program and policy development, and going forward, a more consistent and user-friendly platform for borrowers, lenders, and operators.

Contact Sims Mortgage Funding, Inc. for more information on what promises to be one of the most significant developments at FHA in years.