HUD Multifamily Housing Compliance

1. HUD Multifamily Housing Compliance What Every Tax Credit Investor, Loan Server, and Borrower Needs to Know May 10-11, 2007

2. WHAT KINDS OF PROGRAMS ARE WE DISCUSSING? • Grants To Local Government – HOME, CDBG • Multifamily Mortgage Insurance • Section 8 – Project-based, AAFs, FMRs, OCAFs, Budget Based, 50 Percent Incomes • Vouchers • HOPE VI • Public Housing

3. Introductory Regulatory Issues In Non-Procurement Government Contracts. You Are In The Real Estate Business, But So Much More! • You Have Extra Civil, Criminal Law Requirements • False Statements Act • False Claims Act • 666 – Watch out for Faustian bargains!

4. Administrative Issues • Flags • LDP • Suspension And Debarment -- EPLS

5. * Regulatory Requirements • Audits, Inspections, Reviews • Tax Credits -- 8823s Follow HUD Handbook 4350.3 Plus New 8823 Guide

6. 2530 – Previous Participation Review • 24 CFR Part 200 Subpart H • Plus Memos, Unpublished “Lore”

7. Key Concepts • MPRC Process • Principles • Properties • Officers • GPs • LPs • LLCs • Baseline

8. Paper v. Electronic – APPs History Of Delay, Problems • Substantive Changes Along With APPs – Federal Register Change • Pending Bill, Recent Memos – January Memo, March Memo On Investors, H.R. 1675

9. * Starting Point For Using APPS: • Quick Tips, Glossary • “Absolution,” HUD “Absolves” You Of Your Sins – Sets the tone • REMS And Interpreting With Flags – Leads To Field Office Confession

10. KEY BUSINESS AGREEMENTS • Regulatory Agreement – Key Documents In FHA Loans. • Read It All But Focus on: • Limits – Para 2 – deposits • Para 4 – rent schedule • Para 6-Transfers (TPA), distribution (surplus cash, inspection) • Para 7-Maintenance, Inspection • Para 9-Management Contract, MOR, Audits • Para 10-Fair Housing, but that applies in law by own force too

11. HAPs – Housing Assistance Payments • Many Of The Same Requirements As Regulatory Agreement • HAP Forms Can Differ Substantially In Different Section 8 Programs. Always Check The HAP: • Part II in example paras. 2.4 to 2.6, 2.10, 2.17, 2.20 • Renewals – MAHRA, Section 8 Renewal Guide

12. USE AGREEMENTS • Vary Widely – Seen Only In Some Programs, Such As • Flexible Subsidy Program • Property Dispositions • Non-Profit Prepayments

13. * Audits – This Is A Regulatory Agreement And Increasingly, HAP Requirement (usually) • 4370.2 • Hot topic – Repayment of Advances • Project v. Owner – 4381.5 – Common concept creating conflict

14. * YOUR FHA LOAN IS NONRECOURSE – SORT OF • REACs • MOR • Integrity Of Site Records • Managers – Good Samaritan Can Hurt • Use Agreements

15. CASE STUDIES • How Enforcement Center Works • Harvey Case – Project v. Owner Expenses – Penalties May Not Be Worth The Principle! • David Case – Pays To Avoid Controversial Programs and Acts (coinsurance and default), Or Be Prepared Ahead Of Time • Livecchi Case – Owner Advances And Repayments – Respect Surplus Cash, Get Approvals and Keep Receipts!