Multifamily Industry Meetings: San Francisco

April 18, 2013

Agenda and General Materials

U.S. Department of Housing and Urban Development

San Francisco Multifamily Hub Industry Meeting

April 18, 2013

Agenda

10:00 AM - 10:05 AM    Welcome and Introduction

                                       Gwen Kelleher, Senior Project Manager, Operations

10:05 AM - 10:20 AM    1. The HUB Annual Report

             Matt Naish, Director of Project Management

10:20 AM - 10:30 AM    2. HUD Sequestration Furlough

             Matt Naish, Director of Project Management

10:30 AM - 10:35 AM    3. Update on Flexible Subsidy Repayment

                                        Monica Baptista, Senior Project Manager, Operations

  • Collection Procedures for Delinquent Section 201 Flexible Subsidy Loans (Notice H 2013-02)

10:35 AM - 10:40 AM   4. Updates on Tenant Protection Vouchers

                                        Monica Baptista, Senior Project Manager, Operations

10:40 AM - 10:50 AM     5. Performance-Based Contract Administrator (PBCA) Update and Use of Residual Receipts for Projects with New Regulation Housing Assistance Payment (HAP) Contracts

                                        Danny Dadios, Contract Administrator Oversight Monitor, Operation

10:50 AM - 11:05 AM     6. Preservation Updates: New Guidance on Amending Use Agreements

                Alexa Jeffress, Supervisory Project Manager

  • Policy for Amended Use Agreement for Multifamily Projects Subject to the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (LIHPRHA) (Notice H 2012-25)

11:05 AM - 11:10 AM     7. New Form HUD-2530 Previous Participation Form Released

              Robert Boden, Senior Project Manager, Operations

11:10 AM - 11:20 AM     8. Tenant Participation Requirements in accordance with the Management Agent Handbook

        John Tedesco, Project Manager, Asset Management

  • Implementation of Tenant Participation Requirements in accordance with 24 CFR 245

Subpart B and HUD Handbook 4381.5 REV-2 The Management Agent Handbook (Notice H 2012-21)

11:20 AM - 11:30 AM     9. Enterprise Income Verification (EIV) and Systems Updates

              Bob Dutra, Information Specialist

11:30 AM - 11:40 AM     10. Smoke-Free Housing

                                       Martha Picasso, Project Manager, Asset Management

  • Further Encouragement for O/As to Adopt Optional Smoke-Free Housing Policies (Notice H 2012-22)

11:40 AM - 11:50 AM    11. Fund Compliance Project

              Robert Boden, Senior Project Manager, Operations

11:50 AM - 11:55 AM     Industry Announcements

11:55 AM - 12:00 PM     Closing Remarks

             Gwen Kelleher, Senior Project Manager, Operations

The next Industry Meeting will be held on October 17, 2013

Please join us after the meeting at 12:30 p.m. for training on Budget-Based Rent Increases

Please visit our website to view content and sign up with our mailing list to receive the latest Multifamily updates: http://www.hud.gov/local/ca/working/mf/meetings.cfm

 

SUMMARY OF TOPICS

Update on Flexible Subsidy Repayment

  1. Notice H 2013-02, Repayment of Delinquent Flexible Subsidy Loans, issued January 31, 2013 is in effect until amended, superseded or rescinded.  The notice provides Multifamily with procedures for the recovery of delinquent Flexible subsidy Loans (201 Loans) and defines department policy in relation to these loans. Owners are required to bring loans current within 90 days or renegotiate or risk being reported to Credit Alert Verification Reporting System.  Field Office Project Managers are instructed to notify owners who have 201 loans in default within 5 days of receiving the Office of Chief Financial Officer (OCFO)'s report. Owners are requested to contact the assigned project manager and arrange repayment. In cases where full repayment of the loan may destabilize the project, repayment plans may be considered.

  2. The Notice can be found at: http://portal.hud.gov/hudportal/documents/huddoc?id=13-02hsgn.pdf

Updates on Tenant Protection Vouchers

  1. HUD issued the final Rental Assistance Demonstration (RAD) implementing notice (PIH 2012-32), which allows public housing and other HUD-supported properties to be converted to long-term, project-based Section 8 rental assistance as a tool for preservation. While the initial application period (September 24, 2012 to October 24, 2012), has expired, the ongoing application period began October 25, 2012 and is still open. Ongoing applications are scored on a first-come, first-serve basis.

  2. Qualified participating owners of Rent Supplement, Rental Assistance Program (RAP) or Moderate Rehabilitation (Mod Rehab) properties may leverage the project-based rental assistance (PBRA) or project- based vouchers (PBV) assistance contract to attract new financing. FHA multifamily mortgage insurance is an important source of debt financing for projects participating in RAD. The notice indicates that underwriting of public housing, Mod Rehab, Rent Supplement and RAP properties with PBV or PBRA assistance under RAD will mirror the underwriting of other properties assisted with Section 8 PBV or PBRA assistance. The Notice clarifies the related contractual documents including Use agreements and Housing Assistance Payments contracts.

  3. Applicability of the Low-Income Housing Tax Credit (LIHTC) Pilot to RAD Transactions is also addressed.

  4. Owners and agents interested in additional information are directed to HUD RAD site: http://portal.hud.gov/hudportal/HUD?src=/RAD

Performance-Based Contract Administrator (PBCA) Update and Restrictions on Residual Receipts

  1. PBCA Update
    • The Notice of Funding Availability (NOFA) vs. Procurement issue with the PBCA program is still with the Court of Federal Claims. The judge has said that a decision will be made before June 30, 2013. If the decision upholds the HUD NOFA, then HUD will announce the awardees. There will be one PBCA for the entire State of California. If the judge decides that HUD has to procure the PBCA services, then the procurement will take a much longer time to complete, if HUD decides to go this way.

  2. Update on Residual Receipts Recapture
    • HUD has started the Recapture of Residual Receipt funds (RR) from the November 2012 vouchers from properties located in Arizona, Nevada, and Hawaii. For Northern California, HUD started the process from the December 2012 vouchers.
    •  As of April 4, 2013, the following is a summary of Residual Receipt Recapture program per H2012-14:
      • Number of projects in San Francisco Hub - 69
      • Total Amount of RR to recapture = $17,361,123
      • Total Amount of RR recaptured as of 4-4-13 = $8,431,996
      • Remaining Funds to Recapture = $8,904,408
    • Out of the 69 properties subject to recapture, 37 properties have zeroed out their RR balances
    • The Hub will run another query of Residual Receipt Balances in May or June 2013 to capture subsequent deposits to the RR account upon submittal of the property's 2012 Annual Financial Statements.
    • The first 69 properties are selected based on New Construction New Regulation Section 8 Coding, Non-Profit or Limited Distribution classification, and RR balances based on 2011 Annual Financial Statements.
    • The Hub will continue to query iREMS for those properties that are coded the same as above except for those with For Profit classification and have RR balances based on 2012 AFS.
    • The Residual Receipt Recapture process per H2012-14 will continue year after year until HUD HQ rescinds or amends the Notice.

Preservation Updates: New Guidance on Amending Use Agreements

  1. Policy for Amended Use Agreement for Multifamily Projects Subject to the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (LIHPRHA) (Notice H 2012-25)

OVERVIEW AND APPLICABILITY

  • Applies to all properties that have a recorded LIHPRHA Use Agreement.
  • Also applies to properties subject to a Use Agreement under the Emergency Low Income Housing Preservation Act (ELIPHA), however, ELIPHA Use Agreements expired on the original mortgage maturity date and most recently expired or will expire.
  • The Notice provides guidance ONLY on the circumstances under which HUD may consider amendments to Use Agreements to facilitate prepayment and refinance or acquisition transactions to preserve the properties as affordable housing.
  • HUD will only consider amending the Use Agreement as part of a transaction involving the prepayment of a HUD-insured/held or state-insured mortgage in conjunction with a refinance and/or sale transaction.
  • The Notice does not alter existing mortgage prepayment policies.

WHAT CAN BE AMENDED

  • HUD will allow the amendment of the Use Agreement to do the following:
    • Remove restrictions on the use of proceeds from refinance and/or sale.
    • Permit the Owner to receive proceeds from the refinance and to receive annual distributions up to 8% of the Preservation Equity.
    • Remove any prohibitions on the use of Low-Income Housing Tax Credits (LIHTC).
    • NO OTHER PROVISIONS OF THE USE AGREEMENT MAY BE ALTERED.

  • Equity available for distributions is defined as either "Transfer" or "Extension" Preservation Equity and is based on appraisals performed at the time of the original LIHPRHA transaction. NO NEW EQUITY MAY BE CONSIDERED.
    • If the project was transferred to a new owner at the time of the LIHPRHA transaction, this was "Transfer Preservation Equity."
    •  If the existing Owner retained ownership of the project and extended the affordability restrictions, this is defined as "Extension Preservation Equity."

AMENDMENT PROCESS

  • All requests to amend LIHPRHA Use Agreements will be examined on a case-by-case basis and require HUD HQ approval.
  • Owner must submit a request to amend the UA, including a narrative description of how the 10 criteria above are met and supporting documentation.
  • Field/ Hub office will review within 30 days; the amended UA must be approved by Field Office of Counsel and forwarded to HUD HQ for approval.
  • Upon receipt of approval from HUD HQ, the Field/Hub office will execute the amended Use Agreement.
  • The Notice can be found at: http://portal.hud.gov/hudportal/documents/huddoc?id=12-25hsgn.pdf.

New Form HUD-2530 Previous Participation Form Released

  1. HUD has released an updated HUD-2530 form for property principals to submit their previous participation. In addition to updating the form's instructions to clarify areas of confusion, participants may now type their answers directly into the fillable PDF form.

Implementation of Tenant Participation Requirements in accordance with 24 CFR 245 Subpart B and HUD Handbook 4381.5 REV-2 "The Management Agent Handbook"

  1. Notice issued 10/17/2012 to address available sanctions and use civil money penalties to enforce HUD's commitment to tenant participation.
  2. Applies to HUD-insured or Secretary-held Section 236, 221(d)(3) Below Market Interest Rate (BMIR)'s, Rent Supplement 202, 811, Loan Management Set Aside (LMSA) projects, state or local housing finance projects, project-based Section 8 (S/8) but not those administered by Public Housing Authorities (PHAs), projects receiving enhanced vouchers under the Low-income housing preservation and resident home ownership act of 1990, and Cooperative mortgagors.
  3. Notice discusses tenants' rights, tenant organizations, protected activities such as distributing leaflets, conducting door-to-door surveys, offering assistance for tenants to participate, convening tenant organization meetings on-site independent of the management company.
  4. Tenants have the right to comment on budget-based rent increases, partial payment of claims, utility conversions, reduction in allowances, conversion of units, major capital additions and loan prepayments.
  5. Owner/Agents (O/A's) must reasonably make appropriate meeting space available.
  6. A reasonable fee may be charged but requires prior HUD-approval in accordance with Notice requirements.
  7. Notice reiterates requirements in Handbook 4381.5 regarding impediments including unreasonable denial of accessible meeting space.
  8. Enforcement may include: debarment, suspension, Limited Denial of Participation, and Civil Money Penalties.
  9. The Notice can be found at: http://portal.hud.gov/hudportal/documents/huddoc?id=12-21hsgn.pdf.

Enterprise Income Verification (EIV) and Systems Updates

  1. Housing Notice 2013-06, Enterprise Income Verification (EIV) System, was issued March 8, 2013, and supersedes all previous EIV Notices. The only major change is that violations for not using EIV in its entirety can now be identified and a penalty imposed on the property owner even when a Management Occupancy Review (MOR) has not been conducted.
  2. Residents are now able to get their Social Security benefit letter and their earnings record on-line using "my Social Security" (www.socialsecurity.gov/myaccount)

Further Encouragement for O/As to Adopt Optional Smoke-Free Housing Policies

  1. Notice issued on 10/26/2012 to further encourage O/A's to adopt smoke-free housing policies
  2. Guidance is the same as in prior Notice H 2010-21 on this subject.
  3. Emphasizes the adverse health outcomes from exposure to smoke including cancer, asthma and heart disease.
  4. Requires an update to the House Rules and Policies and Procedures and compliance with fair housing and rights requirements of 24 CFR 5.105.
  5. Policy must be in accordance with state and locals laws, address smoking in units, common areas, playgrounds, areas near window/doors and outside units.
  6. Policy must not deny occupancy to a smoker, allow the O/A at application move-in or recertification, whether applicant or members of household smoke, or require existing tenants to move-out or transfer.
  7. New smoking-related House Rules must be implemented in accordance with Handbook 4350.3.
  8. Repeated violations of non-smoking policy may be considered material noncompliance with lease requirements and result in termination of tenancy.
  9. The Notice can be found at: http://portal.hud.gov/hudportal/documents/huddoc?id=12-22hsgn.pdf. 

Funds Compliance Project

  1. HUD has noticed that some properties receiving Section 8 funds are not using those funds for appropriate project expenses. HUD properties are reminded that they may only use Section 8 funds for appropriate expenses as indicated in their regulatory agreement, HAP contract, or use agreement, as well as in HUD guidance. Our office will be auditing select properties that have relatively high expenses in specific accounts.

BUDGET BASED RENT INCREASE TRAINING

Schedule

12:30 - 1:30 PM  Charles Young, State Manager, CAHI - Section 8 Budget Based Rent Increase 

1:30 - 2:15 PM    Silvia Cuellar, Supervisory Project Manager, HUD - PRAC Renewal and Budget Based Rent Increase

2:15 - 2:30 PM    Q & A

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Content Archived: February 17, 2015