In the last two months, USDA-RD published several administrative notices and unnumbered letters regarding policies and regulations for rural multifamily housing programs. They are as follows:
Administrative Notices (AN)
· AN 4638-“Separate File for Prepayment/Transfers” (April 2, 2012)
RD Instruction 2033-A provides for prepayment requests and supporting documentation to be filed in “Position 3” of the Section 515 loan file. The AN provides guidance that each State should continue to create a separate “eight position” file folder for all Prepayment and Transfer Applications. The intent of this creation is to ensure complete documentation of any events or materials associated with a request to prepay or transfer a loan. This complete documentation will help ensure Rural Development meets its regulatory obligations and will provide timely and complete information to the Office of General Counsel and the Department of Justice when litigation occurs.
For a copy of the AN, please visit: http://www.rurdev.usda.gov/SupportDocuments/an4638.pdf
· AN 4630-“Response to CF MCR findings from the 2011 MCR” (March 1, 2012)
The AN provides guidance on Agency compliance with construction and development requirements as established in RD Instruction 1942-A, that are critical to the success of Community Facilities (CF), Direct Loan, Guarantee Loan and Grant programs. Results from the 2011 Management Control Review (MCR) for CF Programs revealed several areas of concern regarding the design and construction process and the required documentation for projects funded by the CF Programs. This AN shall serve as clarification to the guidance and direction provided in RD Instruction1942-A, related to construction and the construction process including the need and requirements for 1) Agency contract concurrence, 2) the value and requirements of a builder’s warranty and 3) proper documentation of the project process with respect to environmental and architectural requirements.
For a copy of the AN, please visit: http://www.rurdev.usda.gov/SupportDocuments/an4630.pdf
April Unnumbered Letters (UL)
· “Multi-Family Housing Comparative Cost Data – Hyperion” (April 20, 2012)
The UL announces the availability of a tool for Multifamily Housing (MFH) Program field staff that will allow the utilization of comparative cost data for the determination of cost reasonableness in review of MFH project budget line items (e.g., insurance cost, management fees, operations and maintenance). The data report will improve identification of unusually high or low expenses, reduce incidents of waste, fraud and abuse, and provide underwriters with relevant data on which to make informed decisions.
· “Servicing Section 515 Loans that Received Damages under the Prepayment Settlement Agreement and File Retention for Loans Subject to Future Claims” (April 2, 2012)
The UL provides guidance on servicing the accounts of borrowers who have accepted damages as a result of the Settlement Agreement (Agreement) dated May 21, 2007, for the 731 properties involved in prepayment litigation (aka SAT Projects) and retention of information in Section 515 cases that may be subject to similar litigation.
· “HUD’s Veterans Affairs Supportive Housing Program” (April 2, 2012)
The UL advises State Directors, borrowers and management agents in the RD Multifamily Housing Program about the availability of housing vouchers and supportive services for homeless veterans through the Veterans Affairs Supportive Housing Program (HUD-VASH).
For of a copy of the April ULs, please visit: http://www.rurdev.usda.gov/SupportDocuments/ulapril12.pdf
March Unnumbered Letters (UL)
· “Multi-Family Housing Programs Management Fee Survey” (March 27, 2012)
RD is once again undertaking a management fee survey to obtain current, comparable fee information. This letter sets forth guidance for conducting the survey. This management fee survey is designed to compare the existing base management fee for Rural Development properties using the “Bundle of Services” defined in CFR 3560.102(i) to those of other affordable multifamily housing properties within the region/state.
· “Supervised Bank Accounts” (March 26, 2012)
The UL is reissued in response to continued questions on the use of Supervised Bank Accounts (SBA) with RD housing programs.
For of a copy of the March ULs, please visit: http://www.rurdev.usda.gov/SupportDocuments/ulmarch12.pdf