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PPP and EIDL Loans on HUD Section 232 Projects

Karyn A. Nunn

June 29, 2020

In an email from Lean Thinking Office of Healthcare Programs on June 27, 2020, it was stated that the Office of Residential Care Facilities (ORCF) “fully supports borrowers and operators of Section 232 facilities pursuing relief for which they are eligible under the recent Federal emergency legislation, including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. If an owner or operator of a FHA-insured facility applies for this type of loan, please send an email to 232PaycheckProtection@hud.gov with the facility name, FHA number and loan amount requested, as well as the contact information that ORCF can contact in the event any additional information is needed. ORCF will exercise, to the extent possible, the flexibility and rapid responsiveness appropriate to the National Emergency.” 

It was also stated the above was “assuming a small EIDL loan without a collateral requirement.”  If there is a collateral requirement with the EIDL, HUD will need to know what the collateral requirement is and if it can be placed in a second position to the HUD mortgage loan or secured by other collateral in order for HUD to approve the debt. Based upon the above, any Section 232 borrower or operator needs to notify HUD of any PPP or EIDL loans for HUD approval.

For any questions in regard to these updates, please reach out to Karyn Nunn.

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