U.S. Department of Housing and Urban Development Launches $93 Million Healthcare Loan Sale Ahead of August Auction

The U.S. Department of Housing and Urban Development has announced the Healthcare Loan Sale 2026-2 (HLS 2026-2), a sealed-bid auction of 14 due-and-payable, Secretary-Held commercial mortgage loans backed by 13 properties. The portfolio carries a combined unpaid principal balance of approximately $93 million, with bidding set for August 11, 2026.

Portfolio Details and Auction Structure

The 14 loans offered in HLS 2026-2 are all Section 232 healthcare loans — the federal program through which the Federal Housing Administration insures mortgages on healthcare facilities. The loans are described as "due and payable," indicating they are in default or have otherwise matured without resolution.

HUD noted it reserves the right to add or remove loans from the portfolio prior to the auction date. The agency did not disclose individual property addresses, facility types, bed or unit counts, occupancy levels, or loan-level financial details in its announcement. Prospective bidders seeking property-level information were directed to the Office of Asset Sales' transaction specialist at 1-844-709-0763 or by email at HUDSales@falconassetsales.com, with additional details available at falconassetsales.com.

Program Goals: Cost Recovery and Community Healthcare Access

According to HUD, the Healthcare Loan Sale program is designed to serve several objectives simultaneously: supporting continued access to healthcare in affected communities, reducing FHA's claim costs, minimizing the holding costs associated with defaulted healthcare notes, and maximizing recoveries to the FHA insurance fund.

The agency conducts these loan sales periodically, using various sale structures to dispose of defaulted healthcare mortgage notes that were previously insured by FHA. The HLS 2026-2 offering follows that established pattern, with the sealed-bid format placing price discovery in the hands of the market rather than through a negotiated or listed process.

The aggregate unpaid principal balance of approximately $93 million represents the face value of the loans, not the expected sale price, which will be determined through the sealed-bid process.

How to Participate

Entities interested in participating in the August 11, 2026 HLS 2026-2 sealed-bid auction can contact the Office of Asset Sales' Transaction Specialist at 1-844-709-0763 or email HUDSales@falconassetsales.com. Full details regarding the loans offered are available at falconassetsales.com.

Sources

U.S. Department of Housing and Urban Development via PR Newswire, July 15, 2026