One of the most common (and frustrating) reasons FHA and HUD loans get delayed is missing or incorrectly structured Sexual Abuse & Molestation (SAM) insurance. Most borrowers and even many lenders do not realize how critical this coverage is until the deal is already deep in underwriting.

SAM insurance is often required for multifamily, affordable housing, senior living, and healthcare-related properties. These asset classes inherently involve ongoing interaction between staff, tenants, and third parties. Because of this, HUD and FHA lenders view abuse-related liability as a high-severity exposure that must be addressed before closing.

The issue is not just whether you have SAM coverage. What matters is whether the coverage meets very specific requirements. Policies frequently get rejected because they exclude key exposures, have incorrect limits, or fail to include lender-specific wording. In many cases, a borrower believes they are covered, only to discover late in the process that the policy is not acceptable.

This creates a cascade of problems. Underwriters issue last-minute conditions, brokers scramble to find replacement coverage, and closing timelines get pushed. In competitive or time-sensitive deals, this can put the entire transaction at risk.

The solution is simple but requires expertise: secure FHA-compliant SAM insurance early in the process. This means working with carriers that understand the exposure and structuring the policy correctly from the start.

Borrowers who plan ahead and work with specialists can avoid delays, reduce stress, and move through underwriting smoothly. In contrast, those who treat SAM insurance as an afterthought often face unnecessary complications that could have been avoided entirely.

HCP National helps multifamily and healthcare borrowers secure compliant FHA & HUD SAM insurance quickly, so your loan keeps moving. Request a quote now.