HUD Notices




HUD Notice 2011-18: Updated Processing Guidance for the Section 202 Supportive Housing for the Elderly and Section 811 Supportive Housing for Persons with Disabilities Programs


The Department has developed some revised procedures pertaining to processing activities after selection of Section 202 and Section 811 applications for fund reservations including mixed-finance transactions. The Notice is divided into three parts. The first part addresses general issues that concern all Section 202 and Section 811 proposals in which the Owner has not submitted a firm commitment application. The second and third parts of this Notice specifically address mixed-finance transactions. Section 202 and Section 811 applications that have started firm commitment processing shall proceed to initial closing and start of construction based on administrative instructions in place before the issuance of this Notice.


Follow the link to learn more:
http://portal.hud.gov/hudportal/documents/huddoc?id=11-18hsgn.pdf


 

HUD Notice 2011-30: Use of Reserve for Replacement Accounts in Restructured Mark-to-Market (M2M) Properties


Summary: The notice specifies special requirements governing the use of the Reserve for Replacements account that arise from the Mark-to-Market (M2M) program restructuring of a HUD Multifamily property's debt and rents. The notice also provides additional guidance on how the Reserve for Replacements account must be used for such properties that have completed a restructuring under M2M. In general, owners of M2M restructured properties are required to utilize the Reserve for Replacements account as the primary source for capitalized expenses, due to specific M2M requirements, as outlined in the notice.


Purpose: General guidance on the use of the Reserve for Replacements account in multifamily properties can be found in Chapter 4 of Handbook 4350.1 REV-1; however, there are special requirements governing the use of the Reserve for Replacements account that arise from the Mark-to-Market (M2M) program restructuring of a property's debt and rents. This Notice provides additional guidance on how the Reserve for Replacements account must be used for properties that have completed a restructuring under M2M. Guidance for multifamily FHA-insured properties not subject to M2M restructurings will be issued separately. In general, owners of M2M restructured properties are required to utilize the Reserve for Replacements account as the primary source for capitalized expenses. This is due to specific M2M requirements:



The MRNs (and CRNs) represent the statutorily prescribed debt that HUD expects to be repayable from net project income, in exchange for paying out substantial partial payments of claims from the FHA insurance fund, to provide the cash necessary to complete the M2M restructuring process on behalf of that property owner.


Follow the link to learn more:
http://portal.hud.gov/hudportal/documents/huddoc?id=11-30hsgn.pdf


 

HUD Notice 2011-31: Policy for Treatment of Proceeds Resulting from the Sale of FHA-insured or Secretary-held formerly insured Multifamily Projects by Nonprofit Owners


This Notice provides guidance and clarifications on the Department's policy regarding the use of sale proceeds from a multifamily project sold by a Nonprofit Owner that has an FHA-insured or Secretary-held formerly FHA-insured mortgage. Many Nonprofit Owners of projects that have FHA-insured or Secretary-held, formerly FHA-insured mortgages are selling their properties to purchasers who will maintain the long-term affordability of the project. This Notice clarifies the circumstances under which Nonprofit Owners may retain the proceeds from the sale of a project, and the processing oversight that will be provided by HUD.


Follow the link to learn more:
http://portal.hud.gov/hudportal/documents/huddoc?id=11-31hsgn.pdf


 

Notice H 2011-05: Policies and Procedures for the Deferred Repayment of Operating Assistance Flexible Subsidy Loans


Notice H 2011-05 specifies HUD's policies and procedures for approving an owner's request to defer repayment of an Operating Assistance Flexible Subsidy Loan (including HELP Loans) in conjunction with a mortgage prepayment, mortgage expiration, mortgage insurance termination, or the sale of a project. Approval of deferred repayment of Operating Assistance Flexible Subsidy Loans, sometimes referred to as Flexible Subsidy Loans, requires a waiver by the Assistant Secretary for Housing, the Federal Housing Administration (FHA) Commissioner.


Download a copy of the notice:
Notice H 2011-05 (169 Adobe PDF File)


Checklist for program center review:
Checklist for Program Center Review – Appendix 1 (160 KB Adobe PDF File)


Waiver request memorandum:
Waiver Request Memorandum – Appendix 2 (16 KB Adobe PDF File)


Waiver approval memorandum:
Waiver Approval Memorandum – Appendix 3 (89 KB Adobe PDF File)


 

Notice H 2011-03: Policies and Procedures for the Conversion of Efficiency Units to One-Bedroom Units


Notice H 2011-03 details HUD's policies for converting efficiency units to one-bedroom units in certain types of HUD-assisted and/or insured housing. Under this notice, Hubs and Program Centers are responsible for reviewing requests to convert units. However, Hub Directors may approve conversion requests within their jurisdictions if the proposals conform to the notice's requirements. Although the policy outlined in this Housing notice solely addresses the conversion of efficiency units into one-bedroom units, HUD will continue to consider conversion requests for other unit types on a case-by-case basis.


Download a copy of the notice:
Notice H 2011-03 (170 KB Adobe PDF File)


 

Notice H 2010-26: Subordination of Section 202 Direct Loans


Notice H 2010-26 establishes policy and procedures for the review of requests to subordinate Section 202 direct loans ONLY in cases where refinancing these loans under Notice H 04-21 (Post-1974 Section 202 Projects) is not feasible. Subordination of a Section 202 direct loan may, under certain circumstances, provide benefits to both the Department and its industry partners in the preservation of low and moderate-income elderly housing.


Download a copy of the notice:
NOTICE 2010-26 (68 KB Adobe PDF File)


 

Notice H 2010-22: Guidelines for Assumption, Subordination, or Assignment of Mark-to-Market (M2M) Program Loans in Transfer of Physical Assets (TPA) and Refinance Transactions


Notice H 2010-22 amends and restates HUD's draft Guidance dated June 2006, titled "Draft Policy for Assumption and Subordination of Mark-to-Market ("M2M") Notes in Transfer of Physical Assets ("TPA") Transactions." The Guidelines outlined in this Notice apply to any Request to assume, subordinate, and/or assign a loan evidenced by a Note (defined below), and to waive the due-on-sale or refinance clause contained therein. This Guidance also applies to Requests to assume and/or subordinate loans originated under M2M's predecessor program, the Portfolio Reengineering Demonstration Program ("Demonstration Program"). The Guidelines contained in this Notice are effective immediately for all such transactions.


The Guidance outlines a request process and review criteria for owners who wish to refinance or sell a property ("Property") that has received the benefits of a debt restructuring under M2M or the Demonstration Program, and where the loans evidenced by a Mortgage Restructuring Note ("MRN"), and/or a Contingent Repayment Note ("CRN"), or a Demo Note (all as further defined below), will be assumed and/or subordinated, or where HUD will approve debt assignment, modification or forgiveness with respect to a MRN and/or CRN to a qualifying nonprofit purchaser. These requests may be approved, rejected or modified by HUD in its sole discretion. To initiate the process, owners and purchasers would submit a request for waiver of the due-on-sale or refinance clause ("Request"). In response to the Request, OAHP will provide owners and purchasers with a checklist, which must be filled out and returned to OAHP.


Download a copy of the notice:
Notice H 10-22 (157 KB Adobe PDF File)


 

Notice H 2010-17: Revised Procedures for Requesting Inspections from Real Estate Assessment Center


Notice H 2010-17 expands on the revisions for servicing properties with physical condition scores below 60 that were announced in Notice H 2010-041. Specifically, this Notice delegates the authority to order certain special purpose physical inspections from the Real Estate Assessment Center (REAC) to the Hub Director or his or her designee2.


Download a copy of the notice:
Notice H 2010-17 (103 KB Adobe PDF File)


1 - Notice H 2010-04, captioned, "Revised Protocol for Placing Flags in the Active Partners Performance System (APPS) When a Property Receives a Physical Inspection Score Below 60 but Above 30" was issued on January 22, 2010. H 2010-04 expires on January 31, 2011. We will incorporate this guidance into that Notice when it is renewed.
2 - For simplicity, we will refer to the "Hub Director" throughout the remainder of the Notice instead of continually referring to "the Hub Director or his or her designee."

 

Notice H 2010-14: Policy and Procedure for Prepayment and Refinancing of Section 202 Projects Funded Prior to 1975


Notice H 2010-14 provides guidance for prepayments and refinancing of Section 202 Direct Loan projects funded prior to 1975 to help preserve elderly housing.


Download a copy of the notice:
Notice H 2010-14 (231 KB Adobe PDF File)


Authorities:
Authorities – Attachment 1 (69 KB Adobe PDF File)


Calculation of Project Benefits:
Calculation of Project Benefits – Attachment 2 (401 KB Adobe PDF File)


 

Notice H 2010-11: HUD Multifamily Risk Mitigation


Notice H 2010-11 revises underwriting standards, policies and procedures for mortgage insurance under the Federal Housing Administration's (FHA's) Multifamily Housing programs. This Housing Notice is not applicable to the health care programs administered by the Office of Healthcare Programs (Section 232, or refinancing of Section 232 pursuant to Sections 223 (f) or 223 (a) (7)). The Notice will be effective 60 days from the date of issuance, as discussed below in the section titled "Implementation".


Download a copy of the notice:
Notice H 2010-11 (265 KB Adobe PDF File)


Sample schedule of real estate owned:
Schedule of Real Estate Owned – Attachment A (158 KB Adobe PDF File)


Sample schedule of mortgage debt:
Schedule of Mortgage Debt – Attachment B (84 KB Adobe PDF File)