“A master lease will be required on any group of facilities under common control numbering three or more facilities and/or with an aggregate mortgage amount of $15,000,000 or more.”

This will apply to all applications for mortgage insurance pursuant to Sections 223(a)(7), 223(f) or 232 NC/SR; a transfer of physical assets; or a change in lessee or management agent.“ We have previously written about this HUD requirement and explained why we believe it to be an ill conceived solution to a perceived issue. Our HUD lenders have successfully obtained waivers from the master lease due to mitigating circumstances. We have also heard of some borrowers using different HUD lenders for their deals to avoid the master lease. However, HUD has recently indicated that they will no longer grant waivers for master leases on 223(f) applications.