The recent plunge in the 10-year U.S. Treasury bond rate means senior housing/healthcare borrowers will be getting an even more attractive interest rate on their HUD Lean mortgage loans in the weeks ahead, funding expert Jeffrey A. Davis observes.
Davis is Chairman of Cambridge Realty Capital Companies, one of the nations leading senior housing/healthcare lenders, with more than $3 billion in closed transactions since the mid-1990s. The company has been ranked among the top FHA-insured HUD lenders for more than a decade.
According to Davis, interest rates for HUD 232 loans tend to mirror developments in the government bond market, in May, there was a significant 50 basis point drop in 10-year Treasury yields, from a high of 3.76% in April to 3.25% a month later.
Bond yields nudged up slightly in early June but remain well below highs for the current calendar year.
Its not uncommon for volatility in the equities market to drive bond yields lower. The economic crisis in Europe, a disappointing job report and the calamitous oil spill in the Gulf all have investors on edge.
Some worry that the U.S. economy could be headed for a double-dip recession, while others, including Fed Chairman Ben Bernanke, see a tepid recovery continuing but with stubbornly high unemployment. Whichever scenario unfolds, its unlikely that Treasury bond yields will be moving dramatically higher anytime soon, he noted.
Davis said the Cambridge staff is reminding senior housing/healthcare clients that rates for refinancing with the popular new HUD Lean product are probably as low as theyre likely to get in the current cycle.
Cambridge is the creator of The Signature Experience, a four-step process designed to transform the traditional lender/borrower relationship and identify ideal capital solutions for worthy projects. The company has a national origination office in Los Angeles, and numerous correspondent and brokerage relationships nationwide.
D.C.