|HUD No. 00-344|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Monday|
|Or contact your local HUD office||December 11, 2000|
OMHAR SIGNS AGREEMENT WITH ONE OF THE NATION'S LARGEST PROPERTY MANAGEMENT COMPANIES
WASHINGTON - The U.S. Department of Housing and Urban Development's Office of Multifamily Housing Assistance Restructuring has signed an agreement with Apartment Investment & Management Company (AIMCO) that will help speed the restructuring of mortgages on Mark-to-Market eligible properties owned or managed by AIMCO.
Under the Memorandum of Understanding, OMHAR and AIMCO will work to develop a processing format in which typical Mark-to-Market deal terms can be identified and replicated, enabling a faster review and approval of restructuring transactions.
Specifically, OMHAR will assign AIMCO transactions received after September 1, 2000, to one Participating Administrative Entity (PAE), or no more than two, for processing. In addition, OMHAR will provide a single point of contact to work with AIMCO; assign a limited number of reviewers to go over draft AIMCO restructuring transactions; and designate a central, senior review and approval authority.
AIMCO, in turn, will expedite the submission of restructuring transactions; submit transactions in "batches" that are geographically concentrated; provide a senior point of contact for properties involved in M2M; and designate a small staff of professionals to facilitate the closing of M2M transactions quickly and efficiently. AIMCO is expected to submit its first group of transactions in January, 2001. Once submitted, the transactions will be processed by Real Estate Recovery, Inc., one of nine private housing finance firms serving as PAEs.
The MOU, said OMHAR Director Ira Peppercorn, is part of an ongoing effort to assign owners with 10 or more properties in the Mark-to-Market program to one PAE for faster and more streamlined deal processing, and enable large owners to take advantage of an array of initiatives OMHAR recently created to make it more attractive for owners to participate in M2M.
"When we reached out to large owners, particularly those with properties in more than one state, one of the things we heard repeatedly was the importance of creating a mechanism that would enable multiple deals to be processed quickly and efficiently," Peppercorn said. "This MOU, with its emphasis on cooperation, coordination and communication, does exactly that."
AIMCO Executive Vice President Patrick Foye said: "We look forward to working with OMHAR under the MOU, since it will enable us to streamline our processing, thereby saving time and expense. The MOU will enable certain AIMCO properties to take advantage of OMHAR's innovations in the M2M program."
The new MOU will benefit approximately 180 AIMCO property transactions that will be processed by OMHAR's Interregional Processing Office located in Washington, DC., then forwarded to Real Estate Recovery, Inc., for restructuring.
RER Vice President Scott Kallivokas said: "This accelerated process, using one PAE, will result in dramatic savings in time and money for all parties involved. The remarkable cooperation demonstrated so far among the private sector interests involved, HUD, and OMHAR is strong evidence of the compelling benefits for all parties that are occurring under this program."
AIMCO is a real estate investment trust with headquarters in Denver and 25 regional operating centers, which holds a geographically diversified portfolio of apartment communities. Through its subsidiaries, AIMCO operates 1,740 properties, including approximately 330,000 apartment units that serve about one million residents. AIMCO properties are located in 48 states, the District of Columbia and Puerto Rico.
The Mark-to-Market program was created in 1997 to reduce above market Section 8 rent payments on privately owned, federally subsidized rental units to levels more in line with prevailing market rent levels. HUD estimates that M2M will produce substantial savings in the Project-Based Section 8 program in years to come, while preserving affordable housing for thousands of low-income families.
For additional details regarding the new MOU, or other information about the Mark-to-Market program, log onto OMHAR's Web site: www.hud.gov/omhar. More information about the MOU can also be obtained by calling Patrick Foye at AIMCO, (516) 883-0909.