Changes in Healthcare Financing for Skilled Nursing Facilities in 2024

In the world of healthcare financing, especially for skilled nursing facilities (SNFs), there have been some significant changes recently. However, there's some good news: experts think that more government-backed loans will be approved soon, which could bring new opportunities for growth and stability.

The Role of HUD Lending in skilled nursing facilities

HUD lending, which is a loan provided by the Department of Housing and Urban Development, is significant for SNFs. To get these loans, facilities have to meet specific standards and handle changes in regulations and money matters carefully. The fact that more HUD loans are expected in 2024 shows that SNF managers are dealing with today's problems well and are getting ready for more growth.

Insights from Experts

Two experts, Steven W. Kennedy Jr., from VIUM Capital, and Brad Annis, from Walker & Dunlop, have some exciting things to say about HUD lending and what it means for SNFs.

Medicaid Rates and Money Stability

Medicaid rates, which are decided by each state, have been changing because of things like the higher costs during COVID-19, more expensive labor, and rising interest rates. Even though these changes might not mean SNFs aren’t profitable, they're meant to help make sure nursing homes can keep running. This could also make SNFs more attractive for deals like mergers and acquisitions in the next year or so, especially with interest rates changing.

Dealing with Challenges in HUD Lending

Even though things like interest rates and not having enough workers are challenges, the HUD 232 lending program is still significant for SNFs. Lots of SNFs are applying for these loans, and experts think this trend will continue in 2024.

Getting Through the HUD Loan Process

But getting a HUD loan takes a long time, usually about 8 to 9 months from start to finish. This includes things like getting reports from third-party groups, filling out the loan application, waiting in line, and then having HUD review and approve the loan. While everyone waits for the updated HUD handbook to be approved, people in the industry are hopeful about the future of HUD lending.

Looking Ahead: The Promise of HUD Lending

In summary, HUD lending is significant for SNFs, and it shows how financially strong they are. With more HUD loans expected in the future, SNFs can look forward to more stability and growth, which is good news for everyone involved.