SBA & USDA Lending Data and Market Intelligence
Assisted Living Feasibility Study
An assisted living feasibility and market study is the independent analysis a lender, investor or developer relies on to decide whether a proposed or acquired senior care community will fill, hold occupancy and service its debt. Assisted living is an operating business as much as it is real estate. It combines housing with personal care, meals and health-related services for residents who need help with the activities of daily living, and that character shapes both how it is financed and how it must be analyzed. In late 2026 the sector sits at an unusual point: demand risk is at its lowest in a decade, and feasibility risk has moved to cost, lease-up timing and capital structure. Loan Analytics prepares lender-ready and agency-ready studies for assisted living, memory care and broader senior housing. Each is built on an age- and income-qualified demand analysis, a documented competitive and pipeline survey, an absorption and acuity-mix model, and the projections an underwriter actually reviews.
Why Lenders Require an Assisted Living Market Study
Assisted living is financed through a distinct set of channels, and in each one the market study carries real weight. HUD’s Section 232 program offers long-term, fixed-rate, non-recourse financing for assisted living, memory care and skilled nursing. It requires a complete market study, prepared by the independent state-certified appraiser and ordered by the lender, for new construction and substantial rehabilitation. Refinancings may use a truncated study only where the property is stabilized and no change in beds, care mix or local supply is foreseeable. SBA eligibility turns on licensure, not on the building. SOP 50 10 8.1, effective 1 October 2026, treats businesses licensed as assisted living facilities or state-licensed equivalents that provide health services as eligible. Those services include medication help, wellness checks or part-time medical staff. Unlicensed residential facilities and independent living without care remain ineligible. Our analysis of the SBA loan files shows assisted living 7(a) loans charging off at 2.30 percent by count against 6.50 percent across all industries, among the lowest of any sector. In every channel, the study is what lets an underwriter act on evidence rather than on the sponsor’s projections. Because lenders weigh the operator and the care operation heavily, it must address far more than real estate.
The Market: Demand at Historic Highs, Supply at Historic Lows
The defining fact of the assisted living market is a demographic wave that has already arrived. The oldest baby boomers turn 80 in 2026. NIC MAP projects the population aged 80 and older will grow by about a third by 2030 and nearly double by 2040. Federal data show the 85-and-older cohort, the most likely to need assisted living and memory care, rising from 6.5 million in 2022 to 13.7 million by 2040. That demand is meeting historically thin supply. NIC MAP’s third-quarter 2026 data put senior housing occupancy across the 31 primary markets at 90.4 percent, the first reading above 90 percent since 2014 and the 21st consecutive quarterly gain. Assisted living reached 89.1 percent, and its gap with independent living narrowed to 2.6 points, the smallest since 2014. Local spread remains wide, from 94.0 percent in Boston to 86.5 percent in Miami, so the national figure is a starting point, not a conclusion.
Supply growth has nearly stopped. Assisted living inventory grew just 0.4 percent over the past year, against a historical average above 3 percent. Only 16,159 units were under construction in the primary markets in the third quarter, and fewer than 24,000 across the 99 tracked markets, the lowest since 2012. NIC MAP estimates that holding occupancy near 90 percent would require roughly 576,000 additional units by 2030. The current development pace is about 10,445 units a year, roughly a tenth of that need. Rent growth is running at about 4.6 percent annually, and operators are converting it to profit. Welltower’s same-store senior housing operating income rose 21.0 percent in the third quarter, its sixteenth straight quarter above 20 percent. Ventas lifted same-store occupancy to 92.1 percent, with revenue per occupied unit of $5,514 a month. Investors have returned, with senior housing transactions above $15 billion in 2025 and the sector posting the strongest one-year return in the NCREIF property index.
What an Assisted Living Feasibility Study Analyzes
A credible study is built from the primary market area outward, and for assisted living the demand analysis is doubly filtered. The starting point is the age-qualified population, typically households aged 75 and older and increasingly 80 and older, along with their projected growth. HUD’s guidance expects most demand, typically 60 to 80 percent, to originate within the primary market area, which makes its delineation the foundation of the study. Age alone does not define demand, because assisted living is largely private-pay. CareScout’s 2025 survey puts the national median at $6,200 a month, or $74,400 a year, up 5 percent, with memory care well above it. The study therefore filters the age-qualified base by income and assets, including home equity, to identify households that can afford the fee. From that base it derives a penetration or capture rate, the share of qualified demand the subject must attract.
Against demand, the study surveys competitive supply. That means existing assisted living and memory care communities, with their occupancy, unit mix, care levels, pricing, waitlists, age and condition, along with every project under construction or in planning. In states that regulate assisted living through certificate of need, the reviewing agency’s pipeline is part of that survey. From there the study builds the outputs an underwriter tests. The first is the achievable rate and acuity mix: the blend of assisted living and memory care units and the care fees layered on base rent. The second is absorption, which in assisted living is slower and more care-dependent than in conventional housing. The study resolves into an operating model with care revenue, staffing as the largest expense line, margin and the coverage the lender requires, including program-specific thresholds, with sensitivity on slower fill and softer rates.
The Demand-and-Penetration Test
The most important discipline in an assisted living study is that demand must clear two filters at once, age and affordability. A study that applies only the first overstates the market. A trade area with a large and growing 80-plus population can still fail to support a new community if too few households can afford private-pay care. The middle-market gap is measurable. NORC’s 2022 update of its “Forgotten Middle” research projects 15.9 million middle-income seniors by 2033, of whom 39 percent could not afford assisted living even after drawing on home equity. In high-cost states the share is far higher: in California, NORC found 89 percent could not cover the rent without selling a home. The discipline is to size demand from the age- and income-qualified population together, apply a defensible penetration rate, and test the result against current competitor occupancy, waitlists and rates rather than the demographic headline.
Public payers matter at the margin. GAO reports that Medicaid programs in 44 states cover assisted living services, and about 17 percent of residents rely on Medicaid, a share that rises to 32 percent among residents under 75. A study must state the payer mix it assumes and the state reimbursement rates behind it. Demand is also need-driven rather than discretionary. Residents move in because they need help with daily activities or because of cognitive decline, which makes demand more resilient to economic cycles but ties it closely to acuity, staffing capacity and the adult children who often decide. A study earns its keep by reading age, income, payer mix, penetration and the competitive set together, and grounding the conclusion in the specific submarket.
Regulatory and Operational Complexity
Assisted living carries a regulatory and operational burden that few other asset classes share, and a serious study treats it as a defining workstream. Communities are licensed by the state, and the license defines the care that can be delivered, the residents who can be admitted and, for SBA purposes, whether the business is eligible at all. Under SOP 50 10 8.1 the lender must review the license terms directly. Where a third-party manager runs the community, the owner must retain meaningful oversight of the budget, major expenditures, bank accounts and staff. A manager with sole discretion makes the borrower an ineligible passive business. A minority of states also require a certificate of need or similar approval, which adds time and uncertainty. The rules keep moving: Connecticut now requires a hearing before an assisted living fee increase of more than 10 percent, and CMS is developing quality measures for Medicaid-funded home and community-based services. Staffing ratios, clinical requirements and labor costs shape both the cost structure and the risk profile, and the largest public operators still report expense growth above 4 percent a year. That is why operator experience is decisive, and why a study that quantifies the regulatory path and the staffing model gives a lender a far more complete picture than a real estate analysis alone.
Development Costs and the Feasibility of Building
Hard costs feed directly into total project cost, loan sizing and the coverage a lender stress-tests, and assisted living is among the more expensive property types to build. Weitz’s mid-2026 survey for the American Seniors Housing Association places mid-level assisted living at $281 to $358 per gross square foot and high-acuity assisted living at $365 to $454. Tariffs, labor shortages and lingering cost pressure persist. Timelines are long. NIC data show the average 2023 project took 29 months from start to opening, against a median of about 24 to 25 months and roughly 16 months a decade earlier. A project breaking ground today will open into conditions two years out. NIC MAP notes that replacement costs are only now beginning to fall below acquisition prices in some markets, the threshold at which new development starts to make sense. The test is direct: achievable rates must support a cost basis at today’s replacement cost, not at acquisition comparables, at fees the trade area can afford. Loan Analytics grounds the cost side of every model in current bids and the specific market’s labor and licensing conditions.
Financing an Assisted Living Project: HUD, SBA, Agency, and Conventional
Assisted living is served by specialized channels, and the right structure depends on the project and the operator. HUD’s Section 232 program issued a record $8.1 billion in firm commitments in fiscal 2025, roughly double the prior year, across 337 loans. Nearly all were refinancings; only seven were new construction or other transactions. HUD’s express lane now issues commitments on low-risk refinancings in as little as one to two weeks, and lender term sheets cap new-construction assisted living at about 75 percent of stabilized value. SBA 7(a) and 504 serve licensed, owner-operated communities, often for smaller operators and ground-up projects. The 504 contribution rises to 15 percent for a business operating two years or less or for a limited-purpose building, and to 20 percent where both apply. Under SOP 50 10 8.1, acquisitions must also show 1.25x coverage on historical earnings, with a Quality of Earnings report above $3 million. Agency appetite is limited: Freddie Mac describes its seniors housing purchases as limited, and Fannie Mae’s seniors book has contracted to about $10.5 billion. USDA Community Facilities financing reaches public and nonprofit borrowers in rural communities, and bank, bridge and healthcare REIT capital complete the market. In every channel, the market study connects the sponsor’s plan to the capital provider’s standard.
Work With an Assisted Living Feasibility Study Consultant
Loan Analytics prepares independent feasibility and market studies for assisted living, memory care and senior housing projects financed through HUD, SBA, agency, conventional and USDA channels, built on the same demand, supply and lending data described on this page and extended to the subject property. Each study is structured to its channel. HUD studies follow the Section 232 requirements, and SBA studies document the licensure and management-oversight tests under SOP 50 10 8.1. The study arrives as a third-party document written for the lender or investor. It covers primary-market-area demand filtered by age and income, payer mix, a competitive and pipeline survey, acuity-mix and rate analysis, absorption modeling, operating projections and sensitivity testing. To scope one, use the form below or write to Info@analytics.loan. Include the site location, the care types and unit count, whether the project is ground-up or an acquisition, and the intended financing channel, and we come back with scope and timeline.