More than a billion dollars in senior home loans are past due, but the situation is improving

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In the first quarter of 2021, over $1 billion in loans connected to senior home communities were delinquent for more than 60 days across 15 different IPass lenders. During this time, foreclosures reached approximately $54 million.

However, according to a recent lending trends study released by the National Investment Center for Seniors Housing & Care, the rate of loan delinquency has decreased dramatically since its high in Q3 2020. (NIC).

Furthermore, closed new permanent and building loans were sluggish in the quarter, with the historic lows since the industry organization began tracking activity in mid-2016. For four quarters in a row, the same-store expansion rate for fixed and building loan issuances has been negative.

Conclusive report

Commercial real estate services firms, banks, and other lenders were among the 15 institutions that contributed to the report. In the first quarter of 2021, total senior housing loan delinquencies totaled $1.087 billion, down 50% from $2.2 billion in the third quarter of 2020 and 30.6 percent sequentially from when the second big wave of positive Covid-19 cases swept the country.

Throughout the epidemic, growth in same-store new construction loans has been negative. The report’s participants had total loan balances of $57.4 billion, with delinquencies accounting for 1.9 percent. Foreclosures totaled $53.8 million in the first quarter, the first time they were noted in the research since the first quarter of 2019.

This could represent increased distress among smaller operators during Covid-19, who were already having operational and financial difficulties before the pandemic’s outbreak.

In the first quarter of 2021, new lending was poor, with $1.2 billion in total concluded loans. Projects being postponed owing to pandemic-related uncertainties hurt new construction financing in particular: the report’s respondents reported $153.1 million in new construction loan volume during the quarter.

In the first quarter of 2021, participants reported closing $789.2 million in new permanent loans, down 45.6 percent from the previous quarter and the lowest volume since the third quarter of 2016.

However, there are signals of hope. The authors of the study highlight anecdotal evidence from participants of increased lender interest in senior housing around the time of vaccination rollouts, which could be reflected in future quarters.

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