OFFICE
OF HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
AUTHORIZATION:
National
Housing Act, Section 207(k) and (l); Housing and Community Development
Amendments of 1978, Section 203; Departments of Veterans Affairs,
Housing and Urban Development, and Independent Agencies Appropriations
Act of 1997, Public Law 104-204; Departments of Veterans Affairs,
Housing and Urban Development, Section 213, and Independent Agencies
Appropriations Act of 1998, Public Law 105-65; Departments of Veterans
Affairs, Housing and Urban Development, Section 206, and Independent
Agencies Appropriations Act of 1999, Public Law 105-276; Departments
of Veterans Affairs, Housing and Urban Development, and Independent
Agencies Appropriations Act of 2000, Public Law 106-74.
To
manage and dispose of multifamily housing projects that are owned
by the Secretary or that are subject to a mortgage held by the Secretary
in a manner that is consistent with the National Housing Act; protect
the financial interests of the Federal government, and will, in
the least costly fashion among reasonable available alternatives:
preserve certain housing so that it can remain available to and
affordable by low-income persons; preserve and revitalize residential
neighborhoods; maintain the existing housing stock in a decent,
safe and sanitary condition; minimize the involuntary displacement
of tenants; maintain housing for the purpose of providing rental
housing, cooperative housing, and home ownership opportunities for
low-income persons; supporting fair housing strategies; and dispose
of such projects in a manner consistent with local housing market
conditions.
TYPES
OF ASSISTANCE:
Sale, Exchange, or Donation of Property and Goods. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
This
section only applies to multifamily housing projects owned by the
Secretary or that are subject to a mortgage held by the Secretary
for which a foreclosure sale is to be held. A property can be sold
with its current project-based Section 8 contract assigned to the
new owner so that contract and its requirements stay in place. A
property can be sold with tenant-based Housing Choice Vouchers (14.871)
being provided to eligible tenants, which give the tenants the ability
to stay on-site in units that meet HUD standards, or move to another
location. In both cases, the residents must meet the eligibility
requirements of those programs, which are defined elsewhere. A HUD-owned
property may be sold with an up-front grant to assist in paying
for rehabilitation or rebuilding. To be eligible, in addition to
the property being HUD-owned, it must have more than 50 percent
of the units in the project occupied by very low- income residents
at the time a disposition plan is approved by HUD, or HUD must determine
it is essential, as affordable housing, to the revitalization of
its community; it must be located in a housing market or submarket
in which there is not sufficient habitable, affordable, rental housing,
as defined in 24 CFR 290.3; it will generate, after rehabilitation
or rebuilding, sufficient rental income in a competitive market
to cover all operating expenses, meet after sale debt service requirements,
fund required reserves and throw off positive cash flow; will provide
affordable housing for at least 20 years, after the rehabilitation
and/or rebuilding is completed; meets such other requirements, including
deed restrictions, loan provisions, and monetary penalties for non-performance,
as HUD may determine are appropriate on a case-by-case basis. The
maximum that HUD will fund per project in an up-front grant or loan
is 50 percent of total development cost (TDC), or $40,000 per affordable,
finished unit, whichever amount is less (not to exceed the current
number of residential units in the project).
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: These properties can be purchased
by governmental entities, private individuals, corporations, or
nonprofit organizations who have the requisite qualifications and
agree to abide by the conditions set by HUD for the particular property
sale.
Beneficiary
Eligibility: The ultimate beneficiary of those
properties sold for continued use as affordable housing are low-income
individuals and families.
Pre-application
Coordination: None. This program is excluded
from coverage under E.O. 12372.
Application
Procedure: There is no application process.
Foreclosure sales are conducted on an open, oral bid process,
with sealed bids also being permitted. HUD-owned properties can
be purchased without competition, by governmental entities. HUD
can sell some properties non-competitively to nonprofits. All
other HUD-owned properties are sold through a full and open competition,
usually sealed bids, auctions, or a Request for Proposals. HUD
maintains a mailing list of individuals and firms interested in
buying these projects, and maintains a website which lists all
properties currently available for sale.
Award
Procedure: Properties sold at foreclosure
are sold to the highest responsive and responsible bidder. HUD-owned
projects can be sold to governmental entities who agree to meet
HUDs requirements. Certain HUD-owned projects can be sold to nonprofits
who agree to meet HUD's requirements. HUD-owned properties can
be sold to the highest responsive and responsible bidder, and
some are sold to the proposer with the best experience and plan
for the future operation of the property.
Deadlines:
Deadlines are established on a property-by-property basis.
Range
of Approval/Disapproval Time: Contingent upon
complexity of case.
Appeals:
None.
Renewals:
Renewals of the Section 8 are subject to the rules of the particular
program. There are no renewals of Up-Front Grants.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: None.
Length
and Time Phasing of Assistance: None.
POST
ASSISTANCE REQUIREMENTS:
Reports:
Reporting requirements established by Property Disposition Centers.
Obligations:
(Sales) FY 01 $23,000,000; FY 02 est $92,000,000; and FY 03 est
$92,000,000.
Range
and Average of Financial Assistance: Not applicable.
PROGAM
ACCOMPLISHMENTS:
HUD closes about 50-125 projects annually.
REGULATIONS,
GUIDELINES, AND LITERATURE:
Reference material can be found at website http://www.hud.gov/progdesc/multindx.cfm.
INFORMATION
CONTACTS:
Regional
or Local Office: Interested parties can contact
the Multifamily Property Disposition Centers in the Atlanta and
Fort Worth HUD Offices listed in Appendix IV of the Catalog.
Headquarters
Office: Marc Harris, Department of Housing
and Urban Development, Office of Housing, Multifamily Housing
Programs, Office of Asset Management, Room 6160, 451 7th Street,
SW., Washington, DC 20410. Telephone: (202) 708-0614, extension
2680. E-mail: Marc_A._Harris@hud.gov.
Web
Site Address: http://www.hud.gov/progdesc/multindx.cfm
EXAMPLES
OF FUNDED PROJECTS:
Not applicable.
CRITERIA
FOR SELECTING PROPOSALS:
For the up-front grants, once HUD identifies an eligible project,
the grant is made part of the sale and the project is only sold
to a purchaser who has the demonstrated experience to rehabilitate/rebuild
the project and maintain it as affordable housing for at least 20
years after the rehabilitation/rebuilding is completed.
