How to use
Use this decision tree to route a senior housing deal to the right capital source. Each branch screens acuity level, payor mix, operator quality, and stabilization stage, then names the lender options and typical 2026 pricing band. Pair with the operator coverage sizer for the underwriting box on the chosen path.
Step 1. Acuity-level branch
Acuity is the first split. The lender options is materially different across active-adult, IL, AL, MC, SNF, and CCRC. Conflating these acuity levels produces wrong financing decisions on both sides.
- Active adult (55+, no licensed care) → finance as multifamily; full agency program access.
- Independent living (IL) → agency seniors / bank / CMBS; 25 to 50 bps wider than market-rate multifamily.
- Assisted living (AL) → agency seniors / FHA 232 / bank / debt fund; 50 to 150 bps wider than IL.
- Memory care (MC) → FHA 232 / specialty bank / debt fund; wider still than AL; thinner construction bench.
- Skilled nursing (SNF) → HUD 232 LEAN dominates; specialty bank for bridge.
- CCRC / continuing-care → tax-exempt bond + entrance-fee receipts + residual loan; specialist lender options.
Step 2. Payor-mix and regulatory branch (SNF / AL)
Payor mix narrows the lender pool further on SNF and (to a lesser extent) AL. Per CMS data, Medicaid mix above 60% to 70% drops most banks and CMBS shops out of the underwriting set.
- Private-pay or Medicare Part A (post-acute) SNF → bank perm available; HUD 232 LEAN preferred long-term.
- Mixed-payor SNF (Medicaid 30% to 60%) → HUD 232 LEAN; bank bridge to LEAN for repositioning.
- Medicaid-heavy SNF (>60% Medicaid) → HUD 232 LEAN only; bank bridge thin.
- AL with Medicaid waiver mix → HUD 232 / specialty bank only.
- Pull AHCA / state survey history pre-application, immediate-jeopardy or substandard-quality citations gate every program.
Step 3. Operator-quality branch
Operator quality determines pricing tier and program access. The same asset under a top-quintile operator vs. a bottom-quintile operator routes to entirely different lenders.
Step 4. Stabilization-stage branch
Stabilization stage decides bridge vs. perm vs. take-out structure. New construction, repositioning, and lease-up each route differently.
- Stabilized + top-quintile operator → straight to FHA 232 LEAN (SNF/AL) or agency seniors (IL/AL).
- Stabilizing within 12 months → bank or debt-fund bridge with HUD 232 take-out scoped at closing.
- Repositioning (1 to 3 yr to stabilization) → bank bridge or specialty debt fund; size to stabilized take-out underwriting.
- New construction → specialty construction lender (bank or debt fund) with HUD 232 LEAN take-out scoped at closing; completion + carry guaranty.
- Distressed / workout → debt fund or specialty bank only; equity infusion typically required.
Step 5. Output and next step
After running the four branches, the deal lands on a named lender options, an indicative pricing band, and a leverage cap. Pair the output with the senior housing operator coverage sizer for the underwriting-box math, then engage 2 to 3 lenders on the named bench for term sheets.
- Engage 2 to 3 lenders on the named bench, single-lender execution leaves 25 to 75 bps on the table.
- Pull state survey history and 2 to 3 yr audited operator financials before approaching any lender.
- For HUD 232 LEAN routes, allow 6 to 12 months from application to closing; pair with bank bridge if timing is tight.
- For CCRC routes, engage tax-exempt-bond underwriting counsel before structuring.