Low-Income Housing Tax Credit Pilot Program Training, Part 2 - HUD - 11/19/12

GOOD MORNING AND GOOD AFTERNOON, MY NAME IS MARGARET
SALAZAR FROM THE OFFICE OF MULTI-FAMILY HOUSING PROGRAMS.
I AM PLEASED TO WELCOME YOU TO THE ONGOING SERIES OF
TRAININGS FOR THE LOW INCOME HOUSING TAX CREDIT PILOT
PROGRAM. TODAY'S SESSION IS ASSISTED
HOUSING UNDER THE LOW INCOME HOUSING TAX CREDIT PILOT.
WE WILL BE COVERING ISSUES RELATED TO ASSISTED HOUSING,
INCLUDING SECTION 8 RENT INCREASES, PRE-PAYMENTS,
WAIVERS, AND OTHER ASSET MANAGEMENT FUKSS.
-- FUNCTIONS. WE'LL ALSO BE TALKING ABOUT
LEGAL ISSUES RELATED TO THE PILOT PROGRAM.
WE WILL HEAR FROM ALL THE PANELISTS TODAY, AND THEN
THERE WILL BE AN OPPORTUNITY FOR US TO TAKE YOUR QUESTIONS,
SO PLEASE DO SEND IN YOUR EMAIL QUESTIONS TO
MARK.C.WEISENBACKER@HUD.GOV. >>> I WOULD LIKE TO INTRODUCE
THE PANELISTS. TO MY LEFT IS ERIC RAMSEY, THE
DIRECTOR OF THE PROGRAM PARTICIPATION AND POLICY
DIVISION IN THE OFFICE OF ASSET MANAGEMENT.
TO ERIC'S LEFT IS DIANA REED, A HOUSING PROGRAM MANAGER,
ALSO IN THE OFFICE OF ASSET MANAGEMENT.
TO HER LEFT IS GLORIA BURTON, ALSO HOUSING PROGRAM MANAGER
IN ASSET MANAGEMENT. AND FINALLY, STAN HULL,
PROGRAM MANAGER IN THE OFFICE OF HOUSING ASSISTANCE AND
GRANT ADMINISTRATION. I WOULD LIKE TO START TODAY'S
PRESENTATION WITH A GENERAL OVERVIEW OF ASSISTED HOUSING
ISSUES. AGAIN, AFTER YOU HEAR FROM ALL
THE PANELISTS, THERE WILL BE AN OPPORTUNITY FOR US TO TAKE
QUESTIONS AND WE'LL TRANSITION INTO THE LEGAL PORTION OF
TODAY'S PRESENTATION. >> SO LET ME TALK A LITTLE BIT
ABOUT THE GOALS FOR ASSISTED HOUSING UNDER THE PILOT
PROGRAM. AS YOU HAVE HEARD IN SOME OF
THE PREVIOUS SESSIONS, ASSISTED HOUSZING IS ONE OF
THE MAIN -- HOUSING IS ONE OF THE MAIN FOCUSES OF THE TAX
CREDIT PILOT PROGRAM. AND REALLY WHAT THE PILOT IS
INTENDING TO DO IS TO FACILITATE THE PRESERVATION OF
THE ASSISTED HOUSING. THAT INCLUDES DRAWING NEW
EQUITY INTO AGING PROJECTS THAT MIGHT HAVE MATURING LOANS
OR EXPIRING SECTION 8 CONTRACTS, AND IT ALSO
INCLUDES BEING ABLE TO USE THAT CAPITAL TO MAKE NEEDED
PROJECT REPAIRS FOR MANY OF THESE PROPERTIES THAT ARE 30
OR 40 YEARS OLD AND NEED SIGNIFICANT CAPITAL
IMPROVEMENTS. THE OTHER GOAL THAT WE HAVE
FOR THE PILOT PROGRAM IS TO REALLY PILOT WAYS TO
STREAMLINE REVIEWS AND LOAN APPROVALS FOR ASSISTED HOUSING
PROJECTS. THAT INCLUDES WE'RE TRYING OUT
DIFFERENT WAYS TO BETTER INTEGRATE THE ASSET MANAGEMENT
AND DEVELOPMENT FUNCTIONS, AND TO FOCUS ON RISK-BASED
UNDERWRITING OF SECTION 8 PROPERTIES AS A WAY TO
FACILITATE AND STREAMLINE APPROVALS OF FINANCING OF
SECTION 8 PROPERTIES. >> ASSISTED HOUSING REALLY HAS
SOME UNIQUE FEATURES, WHICH IS ONE OF THE REASONS WHY WE
CHOSE IT AS A PROGRAM TYPE FOR THE LOW INCOME HOUSING TAX
CREDIT PILOT PROGRAM. PROJECTS THAT ARE ASSISTED
WITH SECTION 8 CONTRACTS WE BELIEVE ARE INHERENTLY LOWER
RISK THAN MARKET RATE PROJECTS OR TAX CREDIT PROJECTS THAT DO
NOT HAVE SECTION 8 ASSISTANCE. FOR THE PILOT, WHAT WE'RE
TALKING ABOUT IS HOUSING, AS A REMINDER FOR FOLKS, THAT HAVE
90% OR MORE UNITS ASSOCIATED WITH A SECTION 8 CONTRACT.
NOW, BECAUSE THAT SUBSIDY IS TIED TO THE PROJECT UNITS, IT
IS INHERENTLY LOWER RISK BECAUSE THERE'S AN ONGOING
FLOW OF SUBSIDY TO THE PROJECT.
WHAT THAT MEANS IS THAT THESE PROJECTS TEND TO HAVE LOWER
VACANCY AND OF THEM OPERATE WITH WAITING LISTS.
SO, AGAIN, YOU DON'T HAVE AS MUCH OCCUPANCY RISK.
TYPICALLY, AS YOU WILL HEAR IN MUCH MORE DETAIL LATER, THE
RENTS OF THESE PROJECTS ARE AKIN TO MARKET RENTS, EITHER
SET BY MARKET OR BUDGET-BASED PROCESSES YOU'LL HEAR ABOUT
LATER TODAY. >> SO FOR THE TAX CREDIT
PILOT, WHAT WE'RE TALKING ABOUT IN TERMS OF UNDERWRITING
IS TO REALLY ADDRESS SOME OF THE UNDERWRITING CHALLENGES
FOR ASSISTED HOUSING. WE BELIEVE ASSISTED HOUSING,
BECAUSE THESE ARE HUD ASSISTED ASSETS, THESE SHOULD BE EASIER
TO UNDERWRITE, BUT UNFORTUNATELY, HISTORICALLY
THEY HAVE BEEN PRETTY COMPLI SKATED AND WE ARE --
COMPLICATED, AND WE ARE TRYING TO UNRAVEL THAT USING THE
PILOT. A COUPLE DIFFERENT THINGS I
WANTED TO FOCUS ON FOR YOU TODAY.
FIRST IS THAT ONE OF THE COMPLICATIONS IS THAT FOR
SECTION 8 CONTRACT PROPERTIES, THE RENTS ARE ACTUALLY SET
THROUGH THE SECTION 8 PROGRAM. THEY ARE EITHER SET BY
BUDGET-BASED FORMULA OR MARKET COMPARABLES, AND THEN RENTS
ARE ADJUSTED EITHER BY A BUDGET OR AN OCAF, AND THERE
ARE MARKET TESTS ON THOSE RENTS DEPENDING ON WHICH
RENEWAL OPTION AN OWNER IS CHOOSING.
OFK WITH THE FHA LOAN APPLICATIONS, THE INCOME
ESTIMATES ARE COMING DIRECTLY FROM THE APPRAISAL THAT'S
REQUIRED FOR THE LOAN PROGRAM AND THE MAP APPRAISAL METH
ODDOLOGY, WHICH DOES NOT ACCOUNT FOR THE RENT SETTING
PROGRAM OF THE SECTION 8 PROGRAM.
WHAT YOU END UP, AND IF YOU'VE DONE THESE LOANS YOU
EXPERIENCED THIS, IS THAT OFTEN THERE'S A CONFLICT
BETWEEN THE RENTS THAT ARE SET THROUGH THE UNDERWRITING
PROCESS, THROUGH THE APPRAISAL AND THE LENDERS' ANALYSIS OF
THAT APPRAISAL, AND THEN THE RENTS THAT ARE SET THROUGH THE
SECTION 8 PROGRAM, EITHER THROUGH THE MARKET RENT
FUNCTION OF THE REST COMP STUDY OR THE BUDGET BASED
FUNCTION. AJD THAT -- AND THAT OF COURSE
CREATES SORT OF A COORDINATION PROBLEM BETWEEN THE
DEVELOPMENT AND THE ASSET MANAGEMENT SIDES OF THE HOUSE
AT HUD. AND IT BECOMES SORT OF WHAT WE
CALL THE CHICKEN AND EGG PROBLEM.
ARE WE SETTING THE RENTS BASED ON UNDERWRITING OR SETTING THE
RENTS BASED ON THE SECTION 8 PROGRAM AND THEN USING THEM IN
THE UNDERWRITING WHICH RENT SETTING FUNCTION COMES FIRST.
AND I KNOW FROM PERSONAL EXPERIENCE THAT THIS CAN CAUSE
SIGNIFICANT DELAY WHEN YOU'RE TRYING TO REVIEW AND
UNDERWRITE AND APPROVE AN FHA LOAN BECAUSE YOU ARE
TRYING TO NAIL DOWN WHAT THOSE RENTS ARE AND WHAT THAT DOES
TO THE INCOME AND THE LOAN SIZING.
SO WHAT WE'VE DONE FOR THE PILOT IS TO TRY TO ADDRESS
SOME OF THESE COMPLICATIONS. SO THE FIRST THING I WANTED TO
MENTION IS THE PILOT APPLICATION REALLY NEEDS TO
REFLECT THE CONTINUITY BETWEEN THE RENTS THAT ARE USED IN THE
UNDERWRITING AND THE RENTS THAT ARE BEING PROPOSED IN THE
SECTION 8 CONTRACT THAT MAY BE REQUESTED BY THE OWNER.
SO JUST TO KIND OF BACK UP A LITTLE BIT, WHEN YOU'RE
LOOKING AT WHAT'S REQUIRED UNDER THE PILOT FOR THESE
ASSISTED PROJECTS, WE ACTUALLY ARE REQUIRING THE LENDER TO
SNIT WITH -- SUBMIT WITH THE FHA LOAN APPLICATION A COPY OF
THE SECTION 8 CONTRACT RENEWAL REQUEST HAS BEEN SUBMITTED BY
THE BORROWER PRIOR TO THE TAX CREDIT APPLICATION SUBMISSION,
SO WE WANT TO ACTUALLY SEE THE LENDER HAS SEEN THAT CONTRACT
RENEWAL REQUEST, HAS SEEN THE RENTS THE BORROWER IS
REQUESTING AND HAS HAD A CHANCE TO THINK ABOUT THOSE
RENTS IN RELATION SH THE LOAN APPLICATION.
WE ALSO WANT TO SEE A COPY OF THE RENT COMPARABLEABILITY
STUDY THAT IS BEING UTILIZED FOR THE SECTION 8 RENT SETTING
PROCESS. AS A GENERAL RULE, WE WANT TO
SEE THAT THE UNDERWRITING, THE RESTS USED IN THE TAX CREDIT
PILOT APPLICATION UNDERWEREN'TING, WE WANT TO
SEE THOSE RENTS ARE ALIGNED WITH THE RENTS THAT THE
BORROWER IS REQUESTING IN THE HAP CONTRACT.
THAT BORROWER IS REQUESTING A RENT ADJUSTMENT, ESSENTIALLY A
RENT INCREASE AS PART OF THE RENEWAL PROCESS, WOO WATT-R --
WE WANT TO SEE THAT THAT FHA APPLICATION INCLUDES THE
RENTS THAT ARE BEING REQUESTED BY THE BORROWER.
NOW, WE HAVE A COUPLE OF EXAMPLES ACTUALLY OF SOME OF
THE EARLIEST DEALS THAT WE'VE SEEN COME IN THROUGH THE PILOT
PROGRAM WHERE THE OWNER DECIDED THAT THEY ACTUALLY,
AND WORKING WITH THE LENDER, THEY ACTUALLY DID NOT NEED TO
GET THE RENT INCREASE IN ORDER FOR THE FHA LOAN TO PENCIL
OUT. SO THEY WERE ABLE TO ACTUALLY
UNDERWRITE THE LOAN USING THE CURRENT RENTS.
THAT'S GREAT, TOO. THAT'S FINE, TOO.
OFTEN THAT'S NOT WHAT WE'RE SEEING OUT THERE, WE'RE OFTEN
SEEING THAT THE OWNER DOES NEED TO GET THE RENT INCREASE.
SO WE WANT TO SEE THAT THE LENDER HAS TAKEN A LOOK AT
THAT RENT INCREASE, AND IS TAKING THAT INTO ACCOUNT WHEN
THEY ARE DOING THEIR UNDERWRITING, AND OFTEN WE SEE
THAT THOSE RENTS JUST DON'T MATCH UP, AND IT CAN CAUSE A
LOT OF DELAY. SO IF YOU SEE THE SLIDE ON
YOUR SCREEN, YOU'LL SEE THAT THERE ARE A NUMBER OF STEPS
HERE. I'LL TRY TO WALK YOU THROUGH
WHAT WE'RE TRYING TO DO WITH SORT OF THE PROCESS HE CAN
NEARING TO MAKE THIS -- ENGINEERING TO MAKE THIS
PROCESS WORK OUT. AGAIN, IT IS A PROCESS OF
ALIGNING THE SECTION 8 CONTRACT RENEWAL REQUEST WITH
THE LOAN UNDERWRITING AND LOAN SIZING.
SO THE FIRST STEP WOULD BE THE BORROWER ACTUALLY SUBMITS
THEIR SECTION 8 RENEWAL REQUEST TO HUD, AND THE
PBCA AS REQUIRED UNDER THE SECTION 8 RENEWAL GUIDE.
THAT MAY INCLUDE A RENT COMP STUDY.
THIS DOESN'T CHANGE ANY OF THE PROCESSING OF THE HAPPEN
CONTRACT RENEWAL. THAT STEP OF THE OWNER
ACTUALLY PREPARING AND SUBMITTING THE SECTION 8
RENEWAL REQUEST, THAT SHOULD COME FIRST.
IF THE BORROWER IS SUBMITTING A BUDGET-BASED RENT INCREASE,
THEN THEIR RENEWAL REQUEST SHOULD INCLUDE THE NEW DEBT
SERVICE THEY ARE ANTICIPATING AS PART OF THE FHA LOAN.
THAT'S THE CHICKEN AND EGG PROBLEM.
BUT, AGAIN, WE WANT THE LENDER AND BORROWER TO HAVE A
CONVERSATION ESTIMATING WHAT THAT NEW DEBT SERVICE MIGHT
LOOK LIKE APP INCLUDING IT IN THEIR BUDGET BASED REST
INCREASE REQUEST. AFTER SUBMISSION OF THE
RENEWAL REQUEST, THEN THE LENDER IS GOING TO INCORPORATE
THE REQUESTED RENTS INTO THEIR FHA LOAN UNDERWRITING.
THE LENDER WOULD THEN SUBMIT ALONG WITH THEIR FHA LOAN
APPLICATION, AGAIN, THEY SUBMIT A COPY OF THE HAP
CONTRACT RENEWAL REQUEST AND THE RENT COMPARABLEITY STUDY
IF THAT'S REQUIRED UNDER THE RENEWAL OPTION THAT THE
BORROWER IS USING, SUBMITTING THAT TO THE HUD OFFICE ALONG
WITH THE PILOT LOAN APPLICATION.
NOW, THE LENDER CAN USE LOWER RENTS IN THEIR UNDERWRITING
THAN THE RENTS THAT THE OWNER IS REQUESTING, BUT THEY CAN'T
USE RENTS HIGHER THAN WHAT THE BORROWER IS ASKING FOR IN
THEIR SECTION 8 HAP CONTRACT RENEWAL REQUEST, WHICH MAKES
SENSE, BECAUSE THIS WILL BE THE ACTUAL CONTRACT RENTS THAT
THE PROJECT WILL BE EXPERIENCING, AND WE DON'T
WANT THE UNDERWRITING TO BE HIGHER THAN THAT LEVEL.
IF THE OWNER IS REQUESTING A BUDGET-BASED RENT INCREASE, AS
I MENTIONED BEFORE, THE BORROWER IS GOING TO BE
ESTIMATING THAT NEW DEBT SERVICE AND INCLUDING THAT IN
THEIR INITIAL BUDGET-BASED RENT REQUEST.
BUT THEN AT SOME POINT DURING THE FIRM COMMITMENT
PROCESSING, HUD AND WORKING WITH THE LENDER IS GOING TO BE
FINALIZING THE LOAN SIZING AND WILL KNOW AT SOME POINT THE
FINAL DEBT SERVICE TYPICALLY WHEN THE FIRM COMMITMENT IS
ISSUED. SO THEN THE BORROWER WOULD GO
BACK AND CL YOU THE NEW DEBT -- AND INCLUDE THE NEW
DEBT SERVICE, THE REAL ACTUAL DEBT SERVICE IN THAT
BUDGET-BASED REQUEST. SO THEN THE RENT INCREASE CAN
BE APPROVED. SO WHAT ARE THE BENEFITS OF
THIS APPROACH? NOW, STILL SOUNDS PRETTY
COMPLICATED, RIGHT? IF YOU FOLLOW THOSE STEPS I
JUST WENT THROUGH, IT SHOULD HELP TO CUT DOWN ON SOME OF
THE MISCONCEPTIONS AND MISUNDESTANDINGS AND THE BACK
AND FORTH, BOTH WITHIN HUD ASSET MANAGEMENT DEVELOPMENT
BETWEEN HUD AND THE LENDER, AND THEN BETWEEN THE LEND
LENDER AND THE BORROWER. HOPEFULLY WE HAVE A PATHWAY
NOW TO KIND OF CUT DOWN ON SOME OF THAT BACK AND FORTH.
SO WE'RE HOPING THAT A LOT OF THE COORDINATION IS BETWEEN
THE LENDER AND THE BORROWER AND THAT THAT IS HAPPENING
BEFORE THE LENDER IS SUBMITTING THE LOAN
APPLICATION SO THAT WHEN HUD SEES IT, WE HAVE THE BENEFIT
OF ALL OF THAT WORK THAT'S BEEN DONE UP FRONT BETWEEN THE
LENDER AND THE BORROWER. AS A GENERAL RULE, WHAT WE'VE
SAID IN ALL OF OUR GUIDANCE IS THAT IF THE RESTS IN THE --
RENTS DO NOT MATCH THE SECTION 8 RENT REQUEST, WE'LL REJECT
THAT APPLICATION. AGAIN, IT CUTS DOWN ON WEEKS
OF BACK AND FORTH. THAT'S A GENERAL RULE.
THERE MIGHT BE SOME CASES WHERE THE LENDER MIGHT BE ABLE
TO MAKE A CASE FOR WHY THE RENTS DON'T MATCH UP AND WHY
THEY ARE USING DIFFERENT RENTS.
THAT'S FINE. WE WANT TO KNOW THAT THE
THOUGHT HAS BEEN PUT INTO IT AND THAT IT IS A DELIBERATE
DECISION, UNDERWRITING DECISION BY THE LENDER.
THE OTHER BENEFIT TO THIS APPROACH IS THAT -- AND ALL OF
WHAT WE'RE TRYING TO DO HERE WITH THE PILOT IS REALLY
ENGAGING ASSET MANAGEMENT EARLY.
WE REALLY WANT THE DEVELOPMENT UNDERWRITING TO CONFER EARLY
ON, THE BORROWER'S PERFORMANCE, NEEDS.
PROJECT AND EXPENSES AND INCOME.
AND WHAT THAT IS REALLY ABOUT IS THAT WE WANT ASSET
MANAGEMENT TO BE INVOLVED, NOT ONLY ON SOME OF THE KIND OF
TECHNICAL STEPS FOR APPROVING RENT INCREASES AND APPROVING
THE WAIVERS AND PREPAYMENT, BUT ACTUALLY TO BE INTEGRATED
AS A PARTNER HERE TO KIND OF GIVE THE DEVELOPMENT SIDE OF
THE HOUSE SOME IMPORTANT INFORMATION ABOUT WHAT REALLY
THE PLAN IS FOR THIS PROPERTY, WHAT THE PROPERTY NEEDS, AND
WHAT SOME OF THE RISKS ARE. TOO OFTEN WHAT WE'VE SEEN IS
THAT ASSISTED HOUSING IS SORT OF TREATED AS IF ITS A MARKET
RATE HOUSING WHEN WE DO THE UNDERWRITING WORK.
WHAT WE REALLY BELIEVE IS THAT, FOR EXAMPLE, THE
VALUATION PORTION OF THE UNDERWRITING REVIEW THAT HUD
IS DOING ISN'T AS CRITICAL HERE FOR THE SECTION 8
PROPERTIES IN TERMS OF DOING A SITE REVIEW TO LOOK AT
COMPARABLES. WHAT WE REALLY WANT IS SOME
CRITICAL THINKING ABOUT THE REPAIRS THAT ARE NEEDED, THE
CAPACITY OF THE BORROWER, AND SOME OF THAT OTHER REALLY KEY
INFORMATION THAT ASSET MANAGEMENT HAS.
AND THAT'S WHY WE'RE ASKING THE DESIGNATED UNDERWRITER TO
DO A DESK REVIEW, AND NOT TO FOCUS ON DOING -- HAVING THE
APPRAISER GO OUT AND DO THE TYPICAL VALUATION SITE VISIT
THAT'S BEEN REQUIRED BY THE MAP PROGRAM.
AGAIN, THE DESIGNATED UNDERWRITER IS ENCOURAGED TO
COORDINATE WITH ASSET MANAGEMENT, IF POSSIBLE, ASSET
MANAGEMENT COULD ATTEND THE SITE VISIT AS WELL, BUT WE
DON'T WANT OUR FOLKS TO SPEND THEIR TIME GOING THROUGH
THINGS LIKE RENT RULES AND OCCUPANCY HISTORY, THAT'S
REALLY CRITICAL FOR MARKET RATE PROPERTIES, BUT SINCE
THAT INFORMATION IS AVAILABLE IN IRUMS, IT IS NOT AS KEY TO
REALLY MAKING STRONG RISK-BASED UNDERWRITING
DECISIONS FOR ASSISTED HOUSING PROPERTIES.
WITH THAT I WILL TURN IT OVER TO MY COLLEAGUES FIRST WILL BE
ERIC RAMSEY, TALKING ABOUT 2530S AND OTHER ISSUES RELATED
TO POLICY AND PARTICIPATION. >> THANK YOU, MARGARET.
JUST BY WAY OF INTRODUCTION, WITH ME, MY COLLEAGUES HERE,
DIANA REED WILL BE SPEAKING TO YOU ABOUT PREPAYMENT
PROCESSING, AND GLORIA WILL BE SPEAKING TO YOU ABOUT THE
SPECIAL APPROVALS FOR PREPAYMENT.
AND WE HAVE SAM TALKING TO YOU ABOUT THE TAX CREDIT PILOT AS
WELL AS THE SECTION 8 ON CONTRACT RENEWAL.
AS MOST OF YOU KNOW IN THIS PROCESS, 2530 APPROVAL IS VERY
IMPORTANT, AND TO MAKE SURE THAT THIS PROCESS IS COMPLETED
IN A TIMELY MANNER, WE WANT TO MAKE SURE THAT THE 2530
APPLICATION IS APPROVED. WHAT THAT MEANS IS THAT THE
OWNER HAS SIGNED TO THE CERTIFICATION THAT THE
INFORMATION IS CORRECT, THEIR PARTICIPATION IS LISTED ON THE
FORM, AND THE FORM IS DATED. ONE OF THE ISSUES THAT CAN BE
A RED FLAG IN THE APPROVAL PROCESS IS OUTSTANDING FLAGS.
IF THE OWNER HAS NOT SUBMITTED FINANCIAL STATEMENTS OR THEY
HAVE A BELOW 60 PHYSICAL INSPECTION SCORE, OR THE
MANAGEMENT OCCUPANCY REVIEW RATING IS UNSATISFACTORY OR
BELOW AVERAGE, THAT COULD BE A CONCERN.
SO YOU NEED TO WORK WITH THE OWNERS OR THE MANAGEMENT
AGENTS TO MAKE SURE ANY OUTSTANDING FLAGS ARE
RESOLVED. YOU SHOULD CONTACT THE LOCAL
FIELD OFFICE THAT HAS JURISDICTION OVER THE PROPERTY
TO MAKE SURE THAT THOSE FLAGS ARE RESOLVED TIMELY SO THAT
WHEN IT'S TIME TO APPROVE THE LOAN, THOSE ISSUES HAVE BEEN
RESOLVED. THERE ARE CERTAIN FLAGS THAT
HAVE TO BE RAISED TO THE HEADQUARTERS LEVEL, FOR
EXAMPLE, THERE'S AN ISSUE CONCERNING DEFAULT,
FORECLOSURES, BANKRUPTCIES, SUSPENSIONS OR DEBARMENT, THE
OWNER SHOULD SUBMIT THE DOCUMENTATION TO THE LOCAL
FIELD OFFICE, EXPLAINING EXACTLY WHAT HAS GONE ON TO
CAUSE THOSE ISSUES, AND THE FIELD OFFICE SHOULD SEND THAT
INFORMATION HERE TO HEADQUARTERS.
THERE WOULD NEED TO BE REVIEWED BY A REVIEW COMMITTEE
TO MAKE SURE THAT APPROVAL, IF GRANTED, FOR THIS TRANSACTION,
IS GRANTED SO THAT IT CAN BE MOVED FORWARD.
THAT'S A QUICK AND DIRTY OVERVIEW OF THE 2530 PROCESS.
YOU CAN REFER TO HANDBOOK 4065.1, WHICH IS THE PREVIOUS
PARTICIPATION HANDBOOK, PROVIDES INFORMATION ON THE
ISSUES THAT I'VE JUST DISCUSSED, AS WELL AS 24
CFR SUBPART H, WHICH PROVIDES GUIDANCE ON THE 2530 PROCESS.
NOW I AM GOING TO TURN IT OVER TO DIANA REED, SHE IS GOING TO
SPEAK TO YOU ABOUT THE PREPAYMENT PROCESSING.
>> THANK YOU, ERIC. MY NAME IS DIANA REEDS, AND I
WILL BE GOING OVER THE PREPAYMENT PROCESSING
SUBMISSION REQUIREMENT. FOR AN FHA INSURED MORTGAGE,
THE LENDER MUST SUBMIT THE FORM HUD 9807 ELECTRONICALLY
TO RONALD McDOWELL, THE CHIEF MULTI-FAMILY INSURANCE
OPERATIONS BRANCH TO THE ATTENTION OF CHARMAINE ST.
ROSE AT THE FOLLOWING EMAIL ADDRESS.
CHARMAINE.SAINT.ROSE@HUD.GOV, OR FAX THE INFORMATION TO HER
AT 202-401-3246. ANY QUESTIONS RELATING TO THE
PREPARATION OR SUBMISSION OF THE FORM HUD 9807 SHOULD BE
DIRECTLY DIRECTED TO MISS ROSE AT 202-402-2029.
THE WRITTEN REQUEST TO PRE-PAY A HUD-HELD MORTGAGE SHOULD BE
SUBMITTED TO DEBORAH CARTWRIGHT, CHIEF OF THE
MULTI-FAMILY SERVICING BRANCH TO THE ATTENTION OF PAT TAUBER
AT THE FOLLOWING ADDRESS. MULTI-FAMILY NOTE SERVICING
BRANCH@HUD.GOV. OR BY FAX AT 202-619-8408.
QUESTIONS RELATING TO THE SUBMISSION OR WRITTEN REQUEST
TO PRE-PAY A HUD-HELD MORTGAGE SHOULD BE DIRECTED TO PAT
TAUBER AT 202-402-2772, OR DEBORAH CARTWRIGHT AT
202-402-2753. THE REQUEST TO SUBMIT A 2028
DIRECT LOANS ARE SUBMITTED DIRECTLY TO THE LOCAL HUD
FIELD OFFICES OR THE PROGRAM CENTER WHICH HAS JURISDICTION
OVER THE PROPERTY FOR REVIEW, AND RECOMMENDATION FOR
APPROVAL TO HUD HEADQUARTERS ASSET MANAGEMENT.
INDICATE ON YOUR FORM THAT THE PREPAYMENT REQUEST IS GOING TO
BE A TAX PILOT PROGRAM. YOU HAVE 120 DAYS FOR US TO
PROCESS THE REQUEST, SO MAKE SURE THAT EVERYTHING IS IN
COMPLIANCE AND UP TO DATE SO WE CAN PROCESS THE REQUEST IN
A TIMELY FASHION. PREPAYMENT PROCESSING FOR THE
MORTGAGE NOTE, CONTAINED PREPAYMENT LOCKOUT
RESTRICTIONS MAY BE APPROVED FOR PREPAYMENT NO EARLIER THAN
30 DAYS PRIOR TO THE EXPIRATION OF THE PREPAYMENT
LOCKOUT END DATE. LACK OF OWNER COMPLIANCE WITH
OUTSTANDING HUD POLICIES, PROCEDURES, REGULATORY OR
STATUTORY REQUIREMENTS CAN CAUSE DELAYS IN ISSUE EWING
APPROVAL OF THE REQUEST TO -- ISSUING APPROVAL OF THE
REQUEST TO PRE-PAY. IF IT'S DETERMINED THAT YOUR
REQUEST FOR PREPAYMENT IS INCOMPLETE, THE LOCAL HUD
OFFICE IS NOTIFIED OF THE DEFICIENCIES.
IF THE DEFICIENCIES ARE NOT RESOLVED IN A TIMELY MANNER,
THE REQUEST TO REPAY LOANS MAY BE DELAYED.
IF THE LENDER OR THE LOCAL HUD OFFICE WILL BE NOTIFIED OF THE
TERMS AND CONDITION OF THE PREPAYMENT APPROVAL.
THERE ARE NINE HUD OFFICES THAT ARE UNDER THE TAX PILOT
PROGRAM. GLORIA BURTON IS ONE OF THE
CONTACTS, AND KIMBERLY BRITT IS HER BACKUP.
THE OFFICES THAT THEY WILL BE SERVICING IS LAATLANTA, LOS
ANGELES -- ATLANTA, LOS ANGELES, SAN FRANCISCO,
DENVER, AND DETROIT. I WILL BE SERVICING, AND MY
BACKUP IS ISABELLA KABISTART FOR THE FOLLOWING OFFICES.
BOSTON, CHICAGO, FT. WORTH, AND SEATTLE.
IF YOU CANNOT CONTACT THE PEOPLE THAT ARE LISTED FOR
YOUR OFFICES, YOU CAN CONTACT ANY OF THE PEOPLE THAT I JUST
MENTIONED IN THE SLIDES. JUST FOR THE PILOT PROGRAM,
PLEASE INDICATE ON THE PREPAYMENT REQUEST THAT THESE
PRE-PAYMENTS ARE FOR THE PILOT PROGRAM ONLY.
ANY PRE-PAYMENTS OTHER THAN THE PILOT PROGRAM WILL STILL
BE SUBMITTED TO YOUR LOCAL HUD OFFICE AND YOUR REGULAR
CONTACTS, WHICH IS THE PROGRAM CENTER, WHICH IS THE HOUSING
PROGRAM CENTER, WILL STILL PROCESS YOUR REQUEST, THE
HOUSING PROJECT MANAGERS, I'M SORRY, WILL STILL PROCESS THE
REGULAR PREPAYMENT REQUESTS. GLORIA BURTON WILL PRESENT THE
SPECIAL APPROVALS ON PREPAYMENT.
GLORIA? >> THANK YOU, DIANA.
MY NAME IS GLORIA BURTON, I AM A HOUSING PROJECT MANAGER IN
THE OFFICE OF ASSET MANAGEMENT.
THE NOTICE FOR THE TAX CREDIT PILOT SAYS THE POINT OF
CONTACT WILL BE DESIGNATED BY ASSET MANAGEMENT.
I AM THAT DESIGNATED POINT OF CONTACT FOR THE TAX CREDIT
PILOT. DIANA REED WILL SERVE AS THE
BACKUP, AND WE ALSO HAVE TWO ADDITIONAL STAFF IN THE OFFICE
OF ASSET MANAGEMENT THAT WILL ASSIST DIANA AND MYSELF WITH
THESE PROPERTIES THAT ARE DESIGNATED FOR THE PILOT.
THOSE TWO STAFF BEING ISABELLA KABISTART AND KIMBERLY BRITT.
TODAY I'M GOING TO GO OVER WITH YOU SOME OF THE NUANCES
THAT I AM GOING TO CALL THEM, ASSOCIATED WITH THE ASSISTED
HOUSING PROJECTS. FIRST I WILL START WITH THE
SECTION 236 PROJECTS. I WILL LET YOU KNOW THAT THE
SECTION 236 DECOMING NOTICE -- DECOUPLE ING NOTICE IS
READY FOR PUBLICATION VERY SOON.
UNTIL SUCH TIME AS THE NOTICE IS PUBLISHED, YOU SHOULD
CONTINUE TO FOLLOW THE GUIDANCE CONTAINING
OUTSTANDING HOUSING NOTICE 2008.
ONE OF THE OTHER NUANCES FOR SECTION 236 PROJECT BECOMES
EXCESS RENTAL INCOME. EXCESS INCOME IS DUE AT THE
TIME OF PREPAYMENT. FOR THOSE OWNERS WHO HAVE
OUTSTANDING RECEIVABLES, YOU FOLKS THERE IN THE FIELD
OFFICE SHOULD BE WORKING WITH THE OWNER TO COLLECT THE
RECEIVABLES AND/OR THE REPORTS IF IN FACT THE OWNER CHOOSES
TO ENTER INTO A REPAYMENT AGREEMENT, YOU SHOULD BE
WORKING WITH THAT OWNER NOW TO -- YOU SHOULD BE WORKING
WITH THAT OWNER NOW TO ENTER INTO THAT REPAYMENT AGREEMENT.
JUST AS A REMINDER, ALL EXCESS RECEIVABLES AND INCOME REPORTS
ARE TO BE SUBMITTED TO WWW.PAY.GOV.
IF THERE ARE ANY QUESTIONS REGARDING EXCESS INCOME.
OR OWNER DEFICIENCIES FOR THESE PILOT PROPERTIES, NOW IS
NOT TOO SOON. TO CONTACT MYSELF, DIANA
REED, ISABELLA, OR KIMBERLY BRITT.
AS SOON AS WE KNOW ABOUT ANY DEFICIENCIES OR CORRECTIVE
ACTION, THE SOONER, THE BETTER.
I WILL MOVE INTO USE AGREEMENTS, FOR SOME OF THE
ASSISTED HOUSING PROJECTS, THOSE PROJECTS MAY CURRENTLY
BE ENCUMBERED BY AN EXISTING USE AGREEMENT.
IN A REQUEST FOR CHANGES OR AMENDMENTS TO THE EXISTING USE
AGREEMENT REQUIRED A RECOMMENDATION FROM THE LOCAL
HUD OFFICE TO MARK BANKIRK, DIRECTOR OF OFFICE OF ASSET
MANAGER. AND I NEED TO SAY THAT IN A
REQUEST FOR A WAIVER OF ANY TYPE NEEDS TO BE SUBMITTED BY
THE FIELD OFFICE TO THE OFFICE OF ASSET MANAGEMENT IN A
TIMELY MANNER, GIVEN THE TIME FRAME FOR WHICH WE HAVE TO
FROM SES THE -- PROCESS THE REPAYMENT AND GET APPROVAL
BACK FROM THE LENDER AND NOTIFICATION BACK TO THE FIELD
OFFICE. I WILL MOVE TO THE FLEXIBLE
SUBSIDY PROGRAM NOW. THE FLEXIBLE SUBSIDY PROGRAM
CONSISTS OF TWO COMPONENTS: THE OPERATING ASSISTANCE
PROGRAM, AS WELL AS THE CAPITAL IMPROVEMENT LOAN
PROGRAM. THE DEPARTMENT HAS IN PLACE
HOUSING NOTICE H-1105 THAT DEALS WITH DEFERMENT OF
REPAYMENT OF FLEXIBLE SUBSIDY OPERATING ASSISTANCE LOANS.
IF IN FACT YOU BECOME AWARE THAT AN OWNER AFTER PROPERTY
PARTICIPATING IN THE PILOT CHOOSES TO DEFER REPAYMENT OF
THE FLEXIBLE SUBSIDY OPERATING ASSISTANCE LOAN, YOU FOLKS
THERE IN THE FIELD SHOULD BE WORKING WITH THE OWNERS NOW TO
ENSURE THAT A RECOMMENDATION COMES INTO YOUR OFFICE, AND
THEN SUBMIT IT TO MARK BANKIRK, DIRECTOR OF OFFICE OF
ASSET MANAGER. WE CANNOT PRESS TOO MANY TIMES
THE NEED TO SUBMIT THOSE REQUESTS TO US AS SOON AS
POSSIBLE, AND IF THERE ARE ANY ISSUES THAT NEED TO BE
RESOLVED, AND YOU NEED HEADQUARTERS ASSISTANCE DURING
THE PROCESS AND OF THESE APPLICATIONS TO DEFER
REPAYMENT, FEEL FREE TO CONTACT ONE OF THE FOUR POINTS
OF OFFICE AND OUR CONTACT INFORMATION IS PROVIDED IN THE
SLIDE SHOW AND THEY HAD BE MADE AVAILABLE TO YOU AT A
LATER DATE. THE CAPITAL IMPROVEMENT LOAN
MAY NOT BE DEFERRED BEYOND THE MORTGAGE ORIGINAL MATURITY
DATE. SO IF THERE ARE ANY QUESTIONS
THAT YOU HAVE REGARDING OWNER DEFICIENCIES, PLEASE FEEL FREE
TO GIVE MYSELF, DIANA REED, ISABELLA KABISTART, OR
KIMBERLY BRITT A CALL. AND JUST A COUPLE OF OTHER
POINTS. IF DIANA -- AS DIANA
EXPRESSED, THE PREPAYMENT CHECKLIST, WE ASK A MYRIAD OF
QUESTIONS ON THAT PREPAYMENT CHECKLIST, AND WE NEED FOR
THOSE QUESTIONS TO BE ANSWERED VERY CLEARLY AND IN THEIR
ENTIRETY, SO BY THE TIME THE PREPAYMENT GETS TO US, WE CAN
ISSUE A TIMELY APPROVAL BACK TO THE FIELD OFFICE AND BACK
TO THE LENDER. THERE ARE LINKS TO THE
REFERENCES THAT I'VE MENTIONED.
THE SECTION 236 EXCESS INCOME REPORTING NOTICE IS A LINK.
THERE IS A LINK FOR THE SECTION 202 NOTICE, HOUSING
NOTICE 2012-8, THERE IS ALSO A LINK FOR THE 2530 RULES AND
REGULATIONS, AND THERE IS ALSO A SLIDE THAT PROVIDES THE
CONTACT INFORMATION FOR ALL OF US IN THE OFFICE OF ASSET
MANAGEMENT THAT WILL BE ASSISTING YOU WITH PROCESSING
OF ASSESS MANAGEMENT ISSUES THAT MAY SURFACE DURING THE
PILOT. WITH THAT, I WILL PASS IT OF
OFF TO STAN HOUL. IPASSING IT OFF TO STAN WHO
WILL DO ALL OF THE WORK. >> THANK YOU, GLORIA, I KNEW
YOU WERE GOING TO DO THAT TO ME.
LET ME CATCH US UP HERE. I KIND OF FEEL LIKE A BIT OF
AN ORPHAN, BECAUSE ERIC, DIANE AND GLORIA ALL WORK FOR ASSET
MANAGEMENT. AND FOR THE WAIVER REQUEST
THAT ARE THROUGH ASSET MANAGER -- ASSET MANAGEMENT,
THEY GO TO MARK. HOWEVER, WE ARE TALKING ABOUT
THE SECTION 8 RENEWAL GUIDE, AND CHANGES OR WAIVERS THAT
ARE GOING TO BE SUBMITTED TO THAT PROGRAM, THOSE NEED TO
COME TO THE OFFICE OF HOUSING ASSISTANCE AND GRANT
ADMINISTRATION TO KATE OR KATHRYN M. BRENNAN.
WE'LL MENTION THAT AGAIN IN A FEW MINUTES, BUT JUST WANTED
TO ALERT YOU TO THAT. WANTED TO TALK A LITTLE BIT
ABOUT THE SECTION 8 CONTRACT RENEWALS, BECAUSE THE SECTION
8 CONTRACT RENEWALS ARE POLICY -- OUR POLICY IS IN THE
SECTION 8 RENEWAL POLICY GUIDE, WHICH CAN BE FOUND ON
THE WEBSITE. THERE'S SIX RENEWAL OPTIONS,
BUT TODAY WE'LL FOCUS ON TWO OF THOSE AND THEN HIGHLIGHT
THIS OTHER ITEM WHICH IS CALLED THE CAPITAL REPAIRS AND
TRANSFER PROGRAM. OPTION 1 IS WHAT IS CALLED
MARKUP TO MARKET. MANY OF YOU PROBABLY ALREADY
KNOWN THE DETAILS -- KNOW THE DETAILS TO THESE, BUT THIS IS
KIND OF A LITTLE BIT OF A REFRESHER.
OPTION 1 IS MARKUP TO MARKET. OPTION 2, IS MARK UP TO
BUDGET. IF AN OWNER GOING THROUGH THE
TAX CREDIT PROGRAM WANTS TO SIMPLY GO THROUGH MARKUP TO
MARKET, OR MARKUP TO BUDGET WITHOUT ANY SPECIAL CONDITIONS
PLACED ON IT, THEN THERE IS NO NEED FOR ADDITIONAL ACTION TO
GO THROUGH. HOWEVER, IF THEY WANT TO USE
THIS THING CALLED THE CAPITAL REPAIRS AND TRANSFER PROGRAM,
THEN THERE ARE SOME ADDITIONAL ISSUES WE NEED TO TALK ABOUT A
LITTLE BIT. CHAPTER 15'S MAJOR BENEFIT IS
SOMETHING CALLED AFTER REHAB RENTS.
BASICALLY WHAT AFTER REHAB RENTS, THE LONG AND SHORT
STORY, IS THAT IF YOU ARE PARTICIPATING IN CHAPTER 15,
AN APPRAISER CAN UNDERTAKE A REST COMP -- RENT COMP STUDY
AND DETERMINE TWO SETS OF MARKET RENTS FOR THAT PROJECT.
THEY WERE LOOK AT THE PROJECT AS, FOR EXAMPLE, A 30-YEAR-OLD
PROGRAM THAT HASN'T HAD A COAT OF PAINT IN 30 YEARS, AND
DETERMINE WHAT THAT MARKET RENT WOULD BE, BUT MORE
IMPORTANTLY, THEY WOULD BE LOOKING AT THE SCOPE OF WORK
THAT IS PROPOSED FOR THE DEVELOPMENT, AND THEN GO BACK
AND DO A SECOND -- NOT THE ENTIRE STUDY, BUT A SECOND
REVIEW TO SEE WHAT THE MARKET RENTS WOULD BE FOR THE AFTER
REHAB RENTS ON THAT PROJECT. WHAT'S IMPORTANT ABOUT THAT IS
THAT WE HOPE THAT AFTER THE REHABILITATION IS UNDERTAKEN,
THAT THE VALUE OF THE PROPERTY IS GOING TO BE WORTH MORE, AND
THAT IT WILL REFLECTED IN THE AFTER REHAB RENTS, THAT THE
OWNER WILL THEN BE ABLE TO TAKE THE -- TO THE LENDER AND
SAY HERE'S MY ADDITIONAL INCOME, HERE'S MY CASH FLOW,
AND THEREFORE I CAN AFFORD A LARGER LOAN TO WORK ON THIS
PROJECT. NOW, CURRENTLY IN THE GUIDE,
THIS PROGRAM IS ONLY AVAILABLE TO NON-PROFITS.
AND THAT'S WHERE THE EASY PART STOPS, AND THE LITTLE BIT MORE
DIFFICULT PART STARTS. IN FEBRUARY OF LAST YEAR, THE
DAS ISSUED A NOTICE -- EXCUSE ME, A MEMO TO THE FIELD, THAT
SAID THAT FOR-PROFIT OWNERS WOULD BE ABLE TO -- FOR-PROFIT
OWNERS WOULD BE ABLE TO USE CHAPTER 15, THERE WOULD BE NO
USE RESTRICTIONS, AND THE REQUIREMENT FOR A LESS THAN
30 -- A RE-AC SCORE OF LESS THAN 30 WOULD BE WAIVED.
ON MAY 18TH OF THIS YEAR, WE ISSUED ADDITIONAL INSTRUCTIONS
THAT DISCUSSION THAT NO LONGER ARE WE HAVING CONTRACT
EXTENSIONS, BUT WE ARE REQUIRING IF YOU WANT TO
PARTICIPATE AND IF YOU WANT A 20-YEAR CONTRACT THAT THEY
WOULD BE EARLY TERMINATION OF THE EXISTING CONTRACT, THE
PSYCH OF A NEW -- SIGNING OF A NEW CONTRACT FOR 20 YEARS,
WITH THIS THING CALLED THE PRESERVATION EXHIBIT, WHICH
WOULD TACK ON AT THE END OF THE 20 YEARS THE BALANCE FOR
THE CONTRACT THAT'S BEING TERMINATED.
ALSO, ESPECIALLY FOR MARKUP TO MARKET, RENTS WOULD NO LONGER
BE USE RESTRICTED. WE'LL GET A LITTLE MORE DETAIL
ON THAT IN JUST A MINUTE. WHAT DOES THAT MEAN?
THAT MEANS FOR CAPITAL REPAIRS AND THE TRANSFER PROGRAM,
OTHERWISE KNOWN AS CHAPTER 15, A NON-PROFIT PURCHASER OR
OWNER CAN RENEW UNDER -- CAN USE CHAPTER 15, AND RENEW
UNDER OPTION 2, WHICH IS MARKUP TO BUDGET.
A FOR-PROFIT OWNER, AND I EMPHASIZE OWNER, CAN ALSO USE
CHAPTER 15, AND RENEW UNDER OPTION 1, BUT YOU HAVE TO
SUBMIT A WAIVER TO OUR OFFICE FOR PERMISSION TO -- FOR THE 0
FOR-PROFIT OWNER TO USE CHAPTER 15.
LAST, BUDGET-BASED RENTS FOR OPTION 2, AS MARGARET
MENTIONED EARLIER, BUDGET-BASED RENTS CAN BE USED
NOT TO EXCEED THE MARKET, AND IN THE BUDGET, YOU CAN USE THE
NEW DEBT SERVICE. THAT IS THE DEBT SERVICE
ASSOCIATED WITH THE TRANSACTION.
IF YOU ARE A FOR-PROFIT AND YOU WANT TO PURCHASE A
PROJECT, YOU CAN ONLY RENEW UNDER MARKUP TO MARKET, BUT,
AGAIN, YOU CAN USE CHAPTER 15, IF YOU SEEK A WAIVER, OR IF
THE OWNER SEEKS A WAIVER, AND THAT WAIVER IS RECOMMENDED BY
THE FIELD TO HEADQUARTERS. THE IMPORTANT THING THERE IS
THAT THERE ARE A FEW OTHER ISSUES RELATED TO MARKUP TO
MARKET THAT WE'RE TRYING TO STREAMLINE FOR THE RENEWAL
PROCESS. YOU CAN ASK FOR PARTICIPATION
TO USE CHAPTER 15. YOU CAN ALSO ASK FOR A WAIVER
TO SECURE A HUD RCS THAT'S NORMALLY PART OF THE MARKUP TO
MARKET PROCESS. THERE USED TO BE A VEE
STRIKS -- A RESTRICTION IN OPTION 1, MARKUP TO MARKET,
THAT RENTS WOULD BE RESTRICTED TO THE USE RESTRICTIONS, BUT
AS I MENTIONED EARLIER, THOSE RESTRICTIONS WERE REMOVED IN
MAY. NOW, IF YOU HAVE -- IF YOU
RENEW UNDER MARKUP TO MARKET, BECAUSE THERE WILL BE TAX
CREDITS ASSOCIATED WITH THE PROPOSALS OR THE TRANSACTION,
AND BECAUSE THOSE TAX CREDITS WILL PLACE A USE RESTRICTION
ON THE PROPERTY, BECAUSE THERE'S A USE RESTRICTION ON
THE PROPERTY, THE PROJECT CAN ONLY RENEW UNDER OPTION 1-B.
NOW, THE CRITERIA FOR OPTION 1-B ARE LOW VACANCY RATE, A
VULNERABLE POPULATION SERVED, OR COMMUNITY SUPPORT.
AND ONE OF THE THINGS THAT WE ALLOW IS COMMUNITY SUPPORT, IS
THE ALLOCATION OF LOW-INCOME HOUSING TAX CREDITS.
SO IF A PROJECT IS GETTING LOW-INCOME HOUSING TAX
CREDITS, IT'S FAIRLY EASY TO MEET THOSE CRITERIA.
AND INCIDENTALLY, OF THOSE THREE CRITERIA, PROJECT ONLY
HAS TO MEET ONE OF THOSE IN ORDER TO QUALIFY FOR OPTION
1-B. LET ME GO INTO A LITTLE BIT OF
INFORMATION, BECAUSE, AGAIN, THESE -- THIS IS ANOTHER
SERIES OF WAIVER REQUESTS THAT AS THE OTHER FOLKS ON THE
PANEL MENTIONED, PLEASE SUBMIT THOSE TO US AS SOON AS YOU
CAN, BECAUSE SOMETIMES IT TAKES A WHILE TO DO THE REVIEW
OF THESE. BUT BASICALLY WHAT WE'RE
LOOKING FOR IN THESE TYPES OF TRANSACTION ACTION WAIVER
REQUESTS ARE A DESCRIPTION OF THE TRANSACTION, THE SOURCES
AND USES ASSOCIATED WITH THE PROJECT, A DESCRIPTION OF THE
FINANCING, EITHER THE DEBT FINANCING, THE EQUITY THAT'S
GOING TO BE PROVIDED, ANY OTHER STATE AND LOCAL
FINANCING THAT MAY BE INVOLVED, THAT TYPE OF THING.
AND THE SPECIFIC PROVISIONS THAT YOU WANT TO BE WAIVED.
IF YOU ARE LOOKING AT THOSE SPECIFIC PROVISIONS.
AS I MENTIONED EARLIER, THESE WAIVER REQUESTS COME TO KATE
WREN AN -- BRENNAN, AND WE WILL ENDEAVOR TO REVIEW THOSE
AS QUICKLY AS POSSIBLE, AND GET THEM BACK TO YOU AND GET
THE APPROVALS MADE AS SOON AS POSSIBLE.
WITH THAT, I THINK I WILL HAND IT BACK OVER TO MARGARET.
AND -- >> GREAT.
SO WE'RE PREPARED TO TAKE YOUR QUESTIONS NOW.
PLEASE FEEL FREE TO EMAIL THOSE TO US.
THE EMAIL ADDRESS IS MARK.C.WIESENBANKER@HUD.GOV.
HOPE YOU HAVE THE SPELLING OF THAT.
I THINK WE HAVE OUR FIRST QUESTION, WHICH IS WHEN THE
OWNER GETS A RENT COMP STUDY, IS IT AT AFTER REHAB MARKET
RENTS, AND THEN THE SECOND PART OF THE QUESTION IS, IF
YES, CAN THE AFTER REHAB RENTS GO INTO EFFECT AT CLOSING, AND
BEFORE I TOSS THIS BACK TO STAN, I JUST WANT TO CLARIFY
THAT THIS IS IN THE CONTEXT OF A 223-F, WHICH IS A TAX CREDIT
PILOT 223-F THAT ALLOWS REPAIRS UP TO $40,000 PER
UNIT. >> OKAY.
>> WHAT ARE YOUR THOUGHTS, STAN?
>> MY THOUGHTS ARE THAT IT SHOULD BE FAIRLY EASY QUESTION
BECAUSE I AM ASKED THIS QUESTION ABOUT TWICE A WEEK.
THE LONG AND THE SHORT OF THIS IS THAT UNDER NORMAL
CIRCUMSTANCES THE AFTER REHAB RENTS FOR A SUBSTANTIAL REHAB
GO INTO EFFECT AT THE TIME WHEN THE WORK IS COMPLETED,
AND YOU IN THE FIELD OFFICE ARE SATISFIED THAT THE WORK
HAS BEEN DONE. HOWEVER, IN SOME INSTANCES,
UNDER CERTAIN FINANCING OPTIONS, YOU CAN ASK THAT THE
RENTS GO INTO EFFECT AT CLOSING.
HOWEVER, THAT'S VERY TIGHTLY REGULATED WE LOOK AT THREE
FINANCING SOURCES, WE LOOK AT THE 223-F, WE LOOK AT EITHER
THE FANNIE OR THE FREDDY REHAB PROGRAM, AND WE REQUIRE THE
OWNER SIGN A DOCUMENT THAT ALLOWS THE FIELD OFFICE TO
CALL RENTS BACK IF WHEN THE WORK IS DONE IT DOES NOT
SATISFY, AND DOES NOT MEET THE CRITERIA THAT STARTED OUT WITH
THE INCREASE IN THE RENTS IN THE BEGINNING.
SO, YES, IT IS ALLOWED, BUT THERE ARE CERTAIN CONDITIONS,
AND YOU GUYS ARE THEN GIVEN THE RESPONSIBILITY FOR
EXAMINING THE WORK TO MAKE SURE THAT THE WORK ACTUALLY
MEETS THE SCOPE OF WORK, AND THEREFORE COMES UP TO WHAT THE
ORIGINAL RCS SAID THE CONDITIONS WOULD JUSTIFY THE
AFTER REHAB RENTS. >> GREAT.
WHILE WE'RE WAITING FOR ADDITIONAL QUESTIONS, I HAD A
QUESTION FOR ALL OF THE PANELISTS TODAY, WHICH IS,
WE'VE TALKED ABOUT, YOU KNOW, WAIVERS FOR THINGS LIKE AFTER
REHAB RENTS, AND THE USE OF CHAPTER 15, WE TALKED ABOUT
PREPAYMENT APPROVALS, 2530S, WE TALKED ABOUT OTHER WAIVERS.
AND I WAS JUST WONDERING IF YOU HAD ANY ADVICE FOR THE
FOLKS IN THE FIELD WHO ARE GOING TO BE SUBMITTING SOME OF
THESE REQUESTS. WHAT ARE SOME OF THE COMMON
SOURCES OF DELAY OR THINGS THAT ARE OMITTED FROM SOME OF
THESE REQUESTS,Y HINTS OR TIPS YOU CAN PROVIDE TO THE
AUDIENCE TO MAKE THESE GO A LITTLE MORE SMOOTHLY?
>> JUST MAKE SURE WHEN THEY HAVE THE CHECKLIST, THE
CHECKLIST KIND OF BREAK IT DOWN, IF IT SAYS A USE
AGREEMENT GOES WITH THE PROPERTY, MAKE SURE YOU ATTACH
THE USE AGREEMENT AND SEND IT. THE PREPAYMENT CHECKLIST
PRETTY MUCH TELL YOU WHAT TO SEND IN, BUT A LOT OF PEOPLE
DON'T READ THE CHECKLIST AND SEND IN THE DOCUMENTS THAT WE
ARE REQUESTING. SO AS LONG AS YOU FOLLOW THE
CHECKLIST, YOU SHOULD BE PRETTY MUCH OKAY.
>> OKAY. >> AS IT RELATES TO THE 2530
APPROVAL PROCESS, IF THE OWNER HAS DESIGNATED A PEM OF THE
ORGANIZATION TO SIGN ON BEHALF OF THE ENTIRE ORGANIZATION,
THEN THAT DESIGNATION OR THE AUTHORIZATION FOR THAT
INDIVIDUAL TO SIGN ON BEHALF OF THE CORPORATION, THAT
SHOULD BE SUBMITTED WITH THE DOCUMENTATION SO IT WON'T BE
DELAYED. >> OKAY.
ANYTHING ELSE YOU FOLKS WANT TO ASK?
>> MARGARET, VERY QUICKLY FOR THE FLEX WAIVERS, IF THERE IN
THE FIELD OFFICE YOU ALL WOULD FOLLOW THE FORMAT THAT IS
ESTABLISHED IN THE HOUSING NOTICE 11-05, IT WOULD MAKE
THE PROCESS MOVE FASTER. BE SURE TO PROVIDE US WITH ANY
AND ALL INFORMATION THAT YOU THINK THAT WE CAN USE TO MAKE
A DETERMINATION AND SEND THE RECOMMENDATION FORWARD,
FOLLOWING THE FORMAT IS CRITICAL, IT SPEEDS THE
PROCESS. THE LESS QUESTIONS THAT WE
HAVE TO COME BACK TO YOU FOR VERIFICATION ON, THE FASTER
THE PROCESS CAN MOVE, AND BECAUSE THAT WAIVER HAS TO BE
APPROVED BY THE ASSISTANT SECRETARY FOR HOUSING,
FHA COMMISSIONER. >> OKAY, GREAT, THANK YOU SO
MUCH. I THINK WE HAVE A COUPLE OF
QUESTIONS COMING IN. >> MARGARET?
>> JUST TO MAKE MENTION FOR THE SECTION 8 WAIVER REQUEST,
ONE OF THE IMPORTANT THINGS THAT SOMETIMES DOESN'T COME
THROUGH IS IN THE COVER LETTER THAT YOU HAVE TO SEND TO US,
RECOMMENDING THE CHANGE, THE WAIVERS, YOU NEED TO CLEARLY
INDICATE WHAT WAIVERS YOU'RE REQUESTING FOR -- ASKING FOR.
SOMETIMES THOSE DON'T REALLY COME THROUGH, AND IT IS KIND
OF HARD TO FIGURE THEM OUT. >>
>> GREAT, THANK YOU. I THINK THE NEXT QUESTION IS
MORE OF SOMETHING FOR US TO FOLLOW UP ON.
IT SAYS, WHEN WILL ASSET MANAGEMENT BE INFORMED ABOUT
THE CHANGES IN THE 9807 PROCESSING WITH REGARDS TO THE
TAX CREDIT PILOT, AND I THINK THE REASON FOR THIS QUESTION
IS THAT THE PREDOMINANT AUDIENCE FOR THIS BROADCAST
IS, OF COURSE, THE DEVELOPMENT STAFF, NOT NECESSARILY ASSET
MANAGEMENT, AND I THINK I WOULD JUST, WE WILL TAKE THAT
BACK TO ASSET MANAGEMENT, AND MAKE SURE THAT THAT GETS
COMMUNICATED IN A PHONE CALL. THE NEXT QUESTION, I THINK
MIGHT ALSO BE FOR STAN. IT SAYS, DOES THE SECTION 8
RENEWAL POLICY FOR BUDGET RENT INCREASE UNDER OPTION 2
INCLUDE A LINE ITEM FOR DEBT SERVICE COVERAGE, IF NOT, DO
YOU PERMIT WAIVERS ON A CASE BY CASE BASIS.
>> GO AHEAD, MARGARET. >> STAN AND MY FAVORITE TOPIC.
[ LAUGHTER ] >> WE ARE LAUGHING BECAUSE WE
GET THIS QUESTION A LOT. >> QUESTION.
>> IT IS CLEAR AS MUD. >> YES, CLEAR AS MUD.
THE SHORT ANSWER IS THAT WE DO, BUT YOU NEED TO -- THAT
WOULD BE AN ITEM THAT YOU NEED TO AT LEAST HIGHLIGHT TO US,
BECAUSE AT THIS POINT IT'S NOT AN ISSUE OF WAIVERS, BUT IT IS
ALSO NOT CLEARLY IN GUIDE ANSZ, SO YOU WOULD NEED TO
HIGHLIGHT THAT IN THE MATERIAL THAT YOU SUBMIT TO US.
>> AND I WOULD ALSO ADD THAT THE PLACE WHERE WE DO HAVE
CLEAR GUIDANCE ON THIS IS IN THE CONTEXT OF A SECTION 202
PREPAYMENT THAT INCLUDES A SECTION 8 CONTRACT RENEWAL,
AND IF YOU'VE SEEN THE MOST RECENT GUIDANCE FOR 202
PREPAYMENTS, THERE'S A FREQUENTLY ASKED QUESTIONS
DOCUMENT FOR NOTICE 2012.08 THAT TALKS ABOUT THE DEBT
SERVICE COVERAGE LINE ITEM AND SOME GUIDANCE FOR HOW TO LOOK
AT THAT. THE OTHER PLACE WHERE IT'S
BEEN UTILIZED IS IN THE CONTEXT OF THE SECTION 236
IRP DECOUPLEING. WE CAN SAY, YES, IT CAN BE
INCLUDED THERE, AND OTHERWISE IF YOU'RE ASKING FOR A WAIVER
AND YOU'RE INCLUDING THAT IN PART OF THE WAIVER REQUEST, AS
STAN SAID, YOU WOULD WANT TO HIGHLIGHT THAT.
SO WE WILL BE AVAILABLE FOR FOLLOW-UP QUESTIONS IF FOLKS
WANT TO PROVIDE US WITH QUESTIONS, WE'RE HAPPY TO DO
THAT. BUT AT THIS TIME WHAT I WOULD
LIKE TO DO, WE'LL TAKE A QUICK FIVE-MINUTE BREAK.
WHEN WE RETURN, WE WILL SWITCH GEARS AND I WILL BE INVITING
KATHY SOROCA UP HERE FROM THE OFFICE OF GENERAL COUNSEL TO
LET US THROUGH A DISCUSSION OF LEGAL ISSUES.
I WOULD ALSO LIKE TO THANK OUR PANEL TODAY FOR YOUR
PARTICIPATION. THANKS, AND WE'LL SEE YOU IN A
FEW MINUTES. KATHIE SOROKA SORE OBSERVING A
SOROKA KATHIE SOROKA >>> HELLO, EVERYONE, WELCOME
BACK. THANK YOU FOR REJOINING US FOR
THE CONTINUATION OF OUR TRAINING SESSION HERE TODAY.
IN A MOMENT, I WILL INTRODUCE OUR NEXT SPEAKER.
BUT BEFORE I DO THAT, I JUST WANTED TO CLARIFY A POINT WE
GOT A FOLLOW-UP QUESTION TO THE ASSISTED HOUSING PANEL
THAT WE JUST DISBANDED, AND THAT IS A QUESTION TO CLARIFY
SOMETHING ABOUT THE REHAB LIMITS FOR THE 223-F PILOT
PROGRAM. AND HOW THAT RELATES TO THE
TIMING OF THE POST-REHAB RENT INCREASES.
SO MY COLLEAGUE STAN HOUL MENTIONED, WE HAVE THE
ABILITY TO APPROVE POST-REHAB RENT INCREASES TO TAKE EFFECT
AT THE TIME OF THE LOAN CLOSING AT THE INITIAL
ENDORSEMENT IN THE CASE OF A 223-F.
BUT IF YOU'RE FAMILIAR WITH THE SECTION 8 RENEWAL GUIDE,
YOU MAY KNOW THAT THERES A REQUIREMENT THAT THE REPAIR
LIMITS OF ESSENTIALLY BE SET AT THE TYPICAL 223-FLEVELS.
THAT IS TO SAY, THE 6500 TIMES THE HIGH COST FACTOR THAT THE
RENTS CAN TAKE EFFECT AT INITIAL ENDORSEMENT,
INITIAL/FINAL IN THE CASE OF A 223-FFL.
IF THE RENTS -- EXCUSE ME, IF THE REPAIRS ARE BELOW THAT
223-FTHRESHOLD. UNDER THE PILOT PROGRAM,
BECAUSE ITS A PILOT, AGAIN, AS STAN MENTIONED, YOU CAN
REQUEST PERMISSION TO HAVE THOSE RENTS TAKE EFFECT AT THE
TIME OF THE INITIAL FINAL ENDORSEMENT.
AND WHEN YOU DO THAT, JUST LET US KNOW IT IS FOR THE TAX
CREDIT PILOT PROGRAM AND WE WILL CONSIDER THAT, AND HAVING
THOSE RENTS TAKE EFFECT AT THE TIME OF THAT CLOSING, EVEN IF
THE REPAIRS ARE UP TO THE 40,000 PILOT LEVEL.
JUST WANTED TO MAKE A NOTE THAT WE KNOW THAT THAT DOES
CONFLICT WITH WHAT IS IN THE RENEWAL GUIDE.
IN THE SPIRIT OF THE PILOT, WE WILL CERTAINLY CONSIDER THAT
REQUEST. I'M SURE THERE WILL BE A
NUMBER OF OTHER TECHNICAL QUESTIONS AND WE WILL BE HAPPY
TO TAKE THOSE AS FOLLOW-UP AFTER TODAY'S SESSION.
TODAY WHAT I WOULD LIKE TO DO NOW IS INTRODUCE OUR NEXT
GUEST, KATHIE SOROKA, SPECIAL ASSISTANT IN THE OFFICE OF
GENERAL COUNSEL HERE AT HUD. DELIGHTED TO HAVE HER
EXPERTISE HERE. SHE WILL BE TALKING TO US
ABOUT LEGAL ISSUES RELATED TO PILOT APPLICATIONS.
>> THANK YOU, MARGARET. WE'LL BE TALKING JUST ABOUT A
COUPLE POINTS REGARDING THE LEGAL REVIEW PROCESS AND
REQUIREMENTS. FIRST WE'LL TALK ABOUT ANY
CHANGES TO THE PROCESS, THEN WE'LL TALK ABOUT ANY DIFFERENT
LEGAL REQUIREMENTS, THEN FINALLY DIFFERENT LEGAL
DOCUMENTATION, AND THEN WE'LL TAKE ANY QUESTIONS THAT WE
HAVE. FIRST, IN TERMS OF THE LEGAL
REVIEW PROCESS, THE MAIN TAKEAWAY IS THE SOONER, THE
BETTER. WE WANT TO INVOLVE THE HUD
ATTORNEYS AS QUICKLY AS POSSIBLE.
THE REGIONAL COUNCIL WILL BE ASSIGNING LOCAL ATTORNEYS IN
EACH OF THE PROJECT JURISDICTIONS TO CLOSE THE
LOANS, AND OUR HOPE IS TO INVOLVE THOSE ATTORNEYS AT THE
INITIAL CONCEPT MEETING. SO AS SOON AS POSSIBLE, WE CAN
COMMENCE LEGAL REVIEW WITH WHATEVER IS AVAILABLE.
WHATEVER DOCUMENTS ARE AVAILABLE.
NOW, THAT INCLUDES AS SOON AS POSSIBLE STARTING TO VET TIGHT
AL -- TITLE AND SURVEY AND OTHER LONG LEAD ITEMS.
IN A PARTICULAR PROJECT THERE IS A HAIRY ISSUE LIKE THE
ASSET MANAGEMENT FOLKS WERE SAYING, SAME THING ON THE
LEGAL SIDE. IF THERE'S ANY LEGAL WAIVERS
THAT ARE REQUIRED, IF THERE ARE LEGAL ISSUES THAT ARE
GOING TO COME UP, BRING THEM UP AS SOON AS POSSIBLE.
LET'S NOT WAIT UNTIL THE FIRM COMMITMENT IS ISSUED.
AND THAT BEING SAID, THE FIELD COUNSEL ARE ON BOARD WITH
MOVING FORWARD AS QUICKLY AS POSSIBLE.
WE UNDERSTAND THAT FHA IS MAKING THIS PILOT A PRIORITY,
AND YOU WILL -- THE COUNSEL HAS COMMITTED TO BEING
RESPONSIVE AND TO BRINGING THEIR REVIEW UP TO SPEED AS
SOON AS THEY GET DOCUMENTATION, BECAUSE WE KNOW
THAT WE ARE ALWAYS WORKING TOGETHER -- WE ARE ALL WORKING
TOGETHER TO ACCELERATE THE PROCESS AND PROBLEMS THAT MAY
HAVE BEEN SEEN IN THE PAST WILL NOT BE DUPLICATED BECAUSE
OF AN EXTENDED REVIEW PROCESS: LET ME BRING THE SLIDES UP TO
DATE. >> IN TERMS OF THE LEGAL
REVIEW REQUIREMENTS, THOSE ARE PRETTY MUCH THE SAME.
WE DID UPDATE THE 223-F CHECKLIST TO BRING IN
CONSTRUCTION RELATED ITEMS AND ANY ADDITIONAL PILOT SPECIFIC
ITEMS RELATING TO TAX CREDIT REQUIREMENTS.
FOR EXAMPLE, ONE THAT COMES TO MIND IS THAT BECAUSE OF THE
POTENTIAL INCREASED REHAB COSTS, UP TO $40,000, HOUSING
MAY REQUIRE AN ENGINEER AND ARCHITECT TO OVERSEE THE
REPAIRS. SO IF HOUSING REQUIRES AN
A.TEBLTH, REVIEW OF WHATEVER HOUSING REQUIRES WILL BE ADDED
TO THAT CHECKLIST. AND THE SAME WAY, BECAUSE WE
KNOW THAT THESE DEALS WILL INVOLVE TAX CREDITS, REVIEW OF
TAX CREDIT SPECIFIC ITEMS WILL BE ADDED TO THE CHECKLIST, BUT
THESE ARE NOT TAKEN FROM -- TAKEN FROM WHOLE CLOTH, THESE
ARE REQUIREMENTS THAT YOU'VE SEEN IN OTHER DEALS, AND THAT
REFLECT THE REQUIREMENTS THAT ARE IN THE PROCESSING GUIDE.
SO THERE'S NOT -- SHOULDN'T BE ANYTHING REVOLUTIONARY IN
TERMS OF LEGAL CLOSING A REQUIREMENTS.
IN TERMS OF CLANGS TO THE LEGAL DOCUMENTATION, THIS IS
WHERE WE -- CHANGES TO THE LEGAL DOCUMENTATION, THIS IS
WHERE WE SEE THE MOST CHANGE BECAUSE OF THE PILOT PILOT.
AGAIN, BECAUSE OF THE INITIAL RESPONSE TO THE PILOT, WE HAVE
ALREADY BROUGHT THIS DOCUMENTATION INTO PRACTICE.
THERE IS THE PASSIVE INVESTOR CERTIFICATION, THE DOCUMENT
THAT WAS FORMERLY KNOWN AS THE LLCI CERTIFICATION, WHERE THE
PASSIVE INVESTORS ARE CERTIFYING THAT THEY ARE NOT
TAKING CONTROL OF THE PROJECT. WE HAVE ALREADY HAD TRAININGS
ON THIS WITH BOTH FIELD COUNSEL AND WITH HOUSING
DEVELOPMENT STAFF TO BRING THIS DOCUMENT INTO PRACTICE
NOT JUST FOR THE PILOT, BUT ALSO FOR ANY LOW INCOME
HOUSING TAX CREDIT FHA TRANSACTION.
THIS AGAIN JUST CLARIFIES AND UPDATES THE LLCI CERTIFICATE
DRAFTED IN 2007 TO MAKE THE LANGUAGE MORE ACCURATE AND
MORE USER FRIENDLY. AS DAN SULLIVAN WILL CLARIFY
IN THE MORTGAGE CREDIT REVIEW PIECE, THIS CERTIFICATION,
THIS PASSIVE INVESTOR CERTIFICATION CAN BE USED IN
LIEU OF 2530S BY BOTH SYNDICATORS AND INVESTORS IN
THEIR INVESTOR CAPACITY. IF A SYNDICATOR WERE TO CREATE
A GENERAL PARTNER OR TAKE CONTROL OF THE PROJECT
LONG-TERM, THAT WOULD REQUIRE A 2530 THAT'S CAUGHT UNDER
NORMAL 2530 REQUIREMENTS THAT THE ASSET MANAGEMENT THAT ERIC
RAMSEY SPOKE ABOUT PREVIOUSLY. SO, AGAIN, WE'VE TALKED ABOUT
THIS ON NATIONAL CALLS. IT IS THE SAME AND IT'S
CONTINUING TO BE ROLLED OUT. >>> SECONDLY, THE SECOND
DOCUMENT IS THE LOW INCOME TAX CREDIT RIDER TO THE
INSTRUMENT -- SECURITY INSTRUMENT.
AGAIN, WE'VE TALKED P THIS IN THE SAME TIME WE'VE TALKED
ABOUT THE PASSIVE INVESTOR CERTIFICATION.
THIS INITIALLY WAS ROLLED OUT WITH THE PILOT TO SMOOTH OUT
SOME OF THE ROAD BUMPS THAT WE HAVE TRADITIONALLY HAD WITH
LOW INCOME HOUSING TAX CREDIT AND FHA USING THOSE JOINTLY.
THE RIDER IS VERY SIMPLE, POSTED ON THE FHA PILOT
WEBSITE, AND IT ADDRESSES JUST A COUPLE KEY POINTS.
THE FIRST IS NOTICE TO THE INVESTOR, VERY SIMPLE, THE
SECOND IS TRANSFER OF THE INVESTOR INTEREST, SAME AS WE
JUST TALKED ABOUT WITH THE PASSIVE INVESTOR
CERTIFICATION, AND THE THIRD IS THE PREAPPROVAL OF THE
SPECIAL LIMITED PARTNER. WE ALSO THEN DRAFTED
INSTRUCTIONS FOR THE PREAPPROVAL PROCESS OF THE
SPECIAL LIMITED PARTNER. AS WE'VE DISCUSSED, THE
INVESTORS SOMETIME CREATE AN EN STITT THAT IS -- ENTITY
THAT IS LYING, WAITING IN THE ORGANIZATIONAL STRUCTURE OF
THE BORROWER TO TAKE CONTROL IF THE DEAL STARTS TO GO AWRY.
IN THAT CASE IT'S IN HUD'S INTEREST AND THE INVESTORS
INTEREST, ALLOW THE INVESTOR TO TAKE CONTROL AND
POTENTIALLY SAVE THE PROJECT, BUT WE ARE NOT CIRCUMVENTING
ALL OF OUR 2530 REQUIREMENTS. WE ARE PROVIDING A LIMITED
SHORT-TERM ABILITY FOR THE SPECIAL LIMITED PARTNER TO
TAKE CONTROL OF THE PROJECT SHORT-TERM.
THESE PREAPPROVAL INSTRUCTIONS THAT ARE DRAFTED AND THAT ARE
FOUND ON THE FHA PILOT WEBSITE GO THROUGH THE PROCESS WHICH
IS BASICALLY A MODIFIED TPA PROCESS.
THE IDEA IS TO DO THAT UP FRONT SO AT THE TIME THE DEAL
GOES AWRY, IF IT WERE TO DO SO, THEN YOU WOULD NOT HAVE TO
GO THROUGH THE TPA PROCESS AT THAT POINT, BUT THE SPECIAL
LIMITED PARTNER WOULD BE EMPOWERED TO MOVE FORWARD
IMMEDIATELY AND HOPEFULLY SAVE THE TRANSACTION AT THAT POINT.
SO THAT'S ABOUT IT. THE OTHER REQUIREMENTS ARE
PRETTY MUCH THE SAME, THE MAIN TAKEAWAY IS IF THERE'S
ANYTHING YOU THINK IS GOING TO CAUSE A BUMP IN THE ROAD,
BRING IT TO YOUR COUNSEL AS SOON AS POSSIBLE.
IF YOU DO HAVE ANY QUESTIONS AFTER THIS WEBCAST, FEEL FREE
TO REACH OUT TO ME DIRECTLY, IF THERE ARE QUESTIONS OF A
LEGAL MANNER. AND I BELIEVE WE ALSO ARE
TAKING QUESTIONS NOW. >> THAT'S RIGHT.
IF FOLKS HAVE QUESTIONS, FEEL FREE TO EMAIL US, AGAIN, THE
EMAIL ADDRESS IS MARK.C.WEISENBANGER@HUD.GOV.
WE WOULD BE HAPPY TO ADDRESS THOSE QUESTIONS NOW.
I DON'T THINK WE HAVE ANY QUESTIONS COMING IN YET.
WE CERTAINLY APPRECIATE OGC'S INVOLVEMENT IN THE PILOT AND
HOPE THAT AS WE MOVE FORWARD ON CLOSINGS, I'M SURE THAT TO
THE PILOT PROCESS WE WILL BE ABLE TO IDENTIFY EVEN MORE
AREAS WHERE WE CAN HELP TO STREAMLINE THINGS AND DEVELOP
NEW TOOLS. I KNOW THAT ALL OF YOUR
COLLEAGUES IN OGC ARE LOOKING TO DO THAT.
IT DOESN'T LOOK LIKE WE HAVE ANY QUESTIONS COMING IN YET.
WE'LL GIVE IT IT A MOMENT TO SEE IF FOLKS HAVE ANY ISSUES
THEY WOULD LIKE TO BRING UP AT THIS TIME.
\M\M >> THANKS, EVERYONE.
WE APPRECIATE YOUR PARTICIPATION.
I BELIEVE THERE'S ONE MORE SESSION OF THE TAX CREDIT
PILOT PROGRAM TRAINING. SO PLEASE TUNE IN FOR THAT
WHEN IT'S RESCHEDULED, AND THANK YOU SO MUCH FOR YOUR
INTEREST AND PARTICIPATION IN THE PILOT PROGRAM.
THANKS, KATHIE.