In this edition of The Capital Issue
, our feature article explores how recent changes to the Assisted Living Conversion Program (ALCP) will make it easier for seniors housing owners to repair and improve affordable seniors housing properties that carry ALCP grants. Separately, we bring you our annual credit rating agencies update so you know the outlook for hospitals (refreshingly optimistic) as we approach a new year. In our senior living article, we explain the Transfer of Physical Assets process for providers looking to acquire facilities that carry HUD loans while our housing article gives you a detailed look at recent changes to the Sec. 8 Renewal Policy Guidebook. Lastly, our Fiduciary Focus
article describes why it is imperative to understand the sources of performance differences when comparing your organization's investment performance to that of the top institutional investors.
As always, don't hesitate to reach out to the authors of these articles should you have any questions or want any additional info. Happy reading.
Nick Gesue, CEO
The Capital Issue: October-November 2015
In the last feature article of The Capital Issue, we discussed supportive living facilities and Medicaid waivers as two methods of addressing the wave of low- and moderate-income seniors who are in need of some assistance but who still want to maintain independence. In this edition, we will examine another program that has existed for 15 years but recently underwent a change that will benefit seniors housing owners and residents alike—the Assisted Living Conversion Program (ALCP).
Finally, we have some winners. After years of gloom over stagnant volume growth amid uncertainty over the Affordable Care Act (ACA) and challenging economic forces, the outlook is brighter for many health care providers. The consensus theme of the three largest credit rating agencies (CRAs) is that the rich got richer, while weaker providers continue to struggle adapting to technological and market dynamics.
Due largely to its attractive long-term and non-recourse features, approximately 1,650 senior living facilities have been financed through the U.S. Department of Housing and Urban Development (HUD)/Federal Housing Administration’s (FHA’s) Office of Healthcare Programs (OHP) since 2009. These facilities carry loans that have historically low interest rates that are fixed for up to 40 years from their funding date.
For any owner or manager of a Section 8 (Sec. 8) affordable housing property, the Sec. 8 Renewal Policy Guidebook is a vitally important document, especially when a property’s Housing Assistance Payments (HAP) contract approaches expiration or when an affordable housing property looks to refinance. On August 7, 2015, the U.S. Department of Housing and Urban Development (HUD) released an updated version of the Sec. 8 Renewal Policy Guidebook which will be effective as of Nov. 5, 2015. The changes reflected in the updated version offer affordable housing owners and managers new benefits when refinancing their property through a HUD/Fannie Mae mortgage program.
As many large public funds and private endowments release their FY2015 performance figures, it is only natural for smaller endowments and foundations to compare their own performance to these larger, “benchmark” organizations. The largest university endowments and public pension plans are most often viewed as among the most sophisticated institutional investors in the world, and indeed their performance has, at times, been impressive. But how have these organizations been allocating their portfolios? And what are the sources of the outsized performance that some of the largest organizations have experienced?
The Fiduciary Focus