Primary Changes

Updated Part III, Chapter 7: Multifamily Affordable Housing Properties in:

• Section 701: Generally to revise Multifamily Affordable Housing Property (MAH)
  • qualification criteria, and
  • underwriting requirements to Deliver an MAH Mortgage Loan;
• Section 702: MAH Property Eligibility to revise requirements for affordability types, and re-classify them as 
  • LIHTC,
  • HAP Contract,
  • Properties with Both Rent Restrictions and Income Restrictions,
  • Properties with Either Rent Restrictions or Income Restrictions, 
  • Special Public Purpose, or
  • Sponsor-Initiated Affordability; 
• Section 703: Property Income and Underwriting to:
  • update Underwritten NCF requirements 
    • increasing delegation in underwriting Housing Choice Voucher and HAP overhang, and
    • clarifying underwriting for certain expenses, including
      • management fees,
      • Tax Abatements, and
      • certain mandatory operating/compliance expense fees;
  • clarify
    • Appraisal Restricted Value, and
    • market study requirements; and
  • revise 35-year amortization, increasing delegation to include Properties with new HAP Contracts under
    • RAD, or
    • HUD's Section 8 Capital Repairs Program;
• Section 704: Third-Party Financing clarifying requirements for:
  • loan terms;
  • collateral and credit support;
  • Soft Financing; 
  • Third-Party Lenders;
  • subordination agreements; and
  • Grant Funding;
• Section 705: Affordable Restriction Checklist and Subordination and Standstill Agreements requiring you to:
  • submit a compliant Affordability Restriction Checklist (Form 6419); and
  • use the appropriate Subordination and Standstill Agreement depending on provision of Third-Party Financing;
• Section 706: ROAR Loan to:
  • increase delegation to a 24-month rehabilitation period; and
  • update requirements for any cash escrow used in place of a Letter of Credit;
• Section 707: HAP Contract Properties to:
  • clarify Restabilization Reserve requirements including
    • when the decision is delegated to you, and
    • that the requirement for weighted average rents of LIHTC units only applies if the MAH Property also has a LIHTC Affordable Regulatory Agreement in place;
• Section 710: Transactions with Fannie Mae Debt and Equity Interests, to clarify requirements for when Fannie Mae has an indirect equity interest in the Borrower; and
• Section 711: FHA Risk Sharing to clarify requirements.

Updated the Glossary to:

• add defined terms for
  • Grant Funding,
  • Private Affordability Agreement,
  • Public Entity, and
  • Tax Abatement; 
• revise terms including
  • Affordable Regulatory Agreement,
  • HAP Contract (Housing Assistant Payment),
  • Multifamily Affordable Housing Property,
  • Restricted Value,
  • Sponsor-Initiated Affordability Agreement, and
  • Unrestricted Value; and
• delete the terms
  • Housing Choice Voucher, and
  • Preservation.

Updated the Affordable Housing & Tax Relief Data Guidance Job Aid to:

• align with changes to Section 702: MAH Property Eligibility; and
• revise Tax Relief Program Helpful Hints.

Created Requirements for Certain Tax Abatements Not in Place (MAH) (Form 4164) for underwriting certain reduced real estate tax payments.

Questions

For questions, please contact:

• Dawn Poczynek-Holdridge at (202) 752-2235, or [email protected]; or
• Sos Klu at (703) 833-2207, or [email protected].