Walker & Dunlop provides $28.384 million HUD loan for Memory Care Living

Bethesda, MD According to Walker & Dunlop, Inc., it structured a $28.384 million loan for Memory Care Living. The transaction consisted of a U.S. Department of Housing and Urban Development (HUD) portfolio backed by 14 cottage-style memory care properties. 

Walker & Dunlop vice president, Kevin Giusti, and senior vice president, Michael Vaughn, led the origination team, which arranged the 35-year, fixed rate, fully amortizing loan for Valstone Partners. The HUD financing was structured as a 232/223(f) Health Care Facility refinance with an 80% loan to value.

The HUD loan proceeds allowed the sponsor to repay the existing bank debt, reimburse Valstone for their original acquisition costs and capital expenditures, as well as provide funds for renovation costs at several properties. Within the portfolio, 12 properties were refinanced from the borrower’s existing portfolio, and two were acquired and refinanced.  Benefits of this unique portfolio loan structure include decreased legal, appraisal, and underwriting costs, as well as a shorter application-to-close timeline.

Eric Abel, managing director at Valstone, said, “We were very happy with the execution.”

Charlotte-based vice president, Kevin Giusti said, “This is the largest number of individual properties to be included as one loan under HUD’s scattered site approach in the existence of HUD’s 232 program.  This structure enabled our client to save hundreds of thousands of dollars in additional costs compared to the costs associated with 14 individual HUD loans. Additionally, grouping all 14 individual properties as one combined HUD loan allowed the stronger performing properties to balance out the projects that were still in lease-up thus providing maximum loan proceeds to our client while providing HUD with added collateral and cash flow.”