U.S. Department of Housing and Urban Development

H O U S I N G

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Special Attention of: Notice H 94-42 (HUD)

Regional Directors of Housing

Field Office Directors of Housing Issued: 6/6/94

Development, Field Office Directors Expires: 6/30/95

of Housing Management
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Chief Loan Management Officers Cross References:

Chief Property Officers 4360.6, 4465.1, 4350.1,

H 91-29 H 92-11 H 92-54,

4185.1, H 93-21, H 93-94

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Subject: Mid-Course Correction II - For Low Income Housing

Preservation and Resident Homeownership (LIHPRHA) and

Emergency Low Income Housing Preservation Act (ELIHPA)

Programs

This Notice sets forth amended processing instructions for

Title II and Title VI.

Title II has over 4 years of operating experience and Title

VI has over a year and a half of operating experience. During

this time, we have received numerous suggestions and comments

from the Field as well as the industry regarding program changes.

After reviewing these suggestions and comments, we have

determined that a number of policies and instructions set forth

in the current Notices and HUD Handbook 4350.6 should be revised

to speed the delivery of the programs and better serve our

clientele.

In preparing these instructions, we were aware of the

problems some Offices were experiencing coordinating the

different review functions, which has in some cases made the

program more difficult to administer. We have assembled a

combined Housing Management-Housing Development preservation unit

to work exclusively on this program. This unit has proven

beneficial in understanding and providing solutions to the

different review functions. This Notice contains instructions

for both the Production and Asset Management Branches. It is

hoped that combining these instructions will eliminate some of

the coordination problems, provide additional processing tools

and the administrative flexibility needed to better administer

the program.

APPLICABILITY - These instructions will apply to all Title II and

Title VI processing stages not already completed. It is not

necessary to go back to reprocess unless requested by the owner

due to substantial changes in the proposal.

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HMIT: Distribution: W-3-1,W-2(H),W-3(A)(H)(OGC)(ZAS),W-4(H),R-1,R-2,
R-3,R-3-1,R-3-2,R-3-3,R-6,R-6-2,R-7,R-7-2,R-8

Previous Editions Are Obsolete HUD 21B(3-80)

GPO 871 902

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Summary of Notice

This Notice describes interim changes to the Preservation

Program: Title II and Title VI, Development and Management

issues. These changes will eventually be integrated into

permanent formats such as Handbooks and Guidelines. For purposes

of brevity, this Notice is being referred to on \"Mid-Course

Correction Notice II\" (MCCII). A synopsis of the changes follow.

I. Preservation Manager will be appointed in each office

processing Preservation cases.

II\. Title II Processing will more closely approximate Title

VI processing.

\- Greater stress is being placed on tenant notification

and input.

\- PCNAs will be conducted after submission of Notice of

Intent on projects that have submitted a 9608B.

\- Owner may choose to appraise the project and have

the appraisal reviewed prior to submission of POA.

III\. Changes to both Title II and Title VI Processing.

Tenant Notification.

\- CFS/TRACS must be accessed for information upon

receipt of NOI.

\- Increased emphasis is being placed on tenant

notification and input.

\- Revised and additional letters to tenants are being

provided.

PCNAs, Repairs, and Reserve for Replacement Accounts.

\- PCNAs will be done in a prescribed format and will

include a summary of the PCNA analysis.

\- Required Repair requirements are amended:

\- Operational and functional items may be repaired,

but not replaced.

\- Inconsistent items must be corrected.

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\- Definitions of terms used in the PCNA notice are

provided.

\- There is a revised method for computing the initial

deposit to the reserve for replacement account.

\- The initial deposit will provide for items whose

anticipated useful life will expire within 5

years and for major items in years 6 through 10.

\- A 100 percent replacement cost estimate is made

for items whose useful life is anticipated to

expire within 5 years.

\- There is a revised method for determining the

adequacy of the existing replacement reserve account.

\- The determination will be made by Asset

Management staff and the Director of Multifamily

Housing.

\- Owners are required to do on-going assessments of

the reserve for replacement account.

\- An Owner may begin making repairs once HUD\'s PCNA is

received. Prior to making repairs, the Owner must:

\- Inform HUD of its intent to start.

\- Request a pre-construction conference.

\- Provide a written plan for completing repairs.

\- When repairs are completed before submission of the

POA application:

\- No inspection and modifications will be made to

the PCNA until the POA application is received by

HUD.

\- The provisions of Davis Bacon may or may not be

applicable to the completed repairs depending on

compliance with the written plan.

\- Existing project replacement reserve funds may be

used to replace items scheduled to be replaced or

repaired in the PCNA work write-up. They must be

completed before submission of the POA application.

\- Inspection fee requirements have been revised.

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Section 241(f) Loan Processing.

\- An owner may propose improvements to the property

that exceed the scope of repairs in the PCNA work

write-up.

\- Types of items that may or may not be included

are listed.

\- Valuation technical staff will develop a list of

acceptable amenities for each market area.

\- HUD technical staff will evaluate proposed

improvements and estimated costs.

\- Contingency Reserve.

\- A 10 percent contingency will be established for

all repairs and improvements in nonprofit

transfer projects.

\- A contingency reserve will be established for

substantial rehabilitation projects.

\- Owners are required to submit an Estimate of Progress

Schedule.

IV\. Changes made to Title VI Processing Only.

\- Clarification of negotiation option before third

appraisal.

\- The definition of multifamily rental housing under

extension preservation value has been expanded to

include some types of elderly housing.

\- The concept of Project Specific Rents (PSR) is

introduced and is distinguished from Prevailing

Market Rents (PMR).

\- PMR reflects prevailing market amenities.

\- PSR reflects the subject project characteristics

and is the rent non-subsidized tenants would be

willing to pay.

\- PSR is the cap on Total Tenant Payment that the

owner requests to use at the project if it is

lower than FMR.

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\- PSR must be updated each year if it is to be

used.

\- PSR is the maximum Section 8 Contract rents to be

used at POA approval in Title II projects.

\- Federal Cost Limit is being frozen at the amount

determined on Form HUD-9607 at the appraisal stage.

\- Field Offices will submit all Form HUD-9607s to

Preservation Division.

\- Newspapers and newsletters without significant

circulation will not be used to advertise sale of

Preservation projects.

\- Credit approval for nonprofit purchasers is moved to

the receipt of a bona fide offer.

\- Consultant fees will be approved simultaneously with

nonprofit purchaser credit approval.

\- A combined checklist is provided for TPA/241(f)/POA

applications.

V. Preservation Technical Assistance Grants.

\- Expedited processing is encouraged.

\- Nonprofit purchasers may request Section 241(f)

application fees in their PTAG applications.

\- Revision of Exhibits 3, 6 and 7 to be substituted in

the application package.

VI\. Section 241(f) Loan Processing.

\- The requirement for a Section 241(f) equity loan

escrow is not changed.

\- A construction escrow to be funded by the owner is

required for all Section 241(f) loans. However, a

nonprofit mortgagor may use the 10 percent

contingency reserve to meet this requirement.

\- Transaction expenses eligible for a Section 241(f)

loan are described.

\- Debt Service Coverage requirements.

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\- 90 percent for equity portion of loan in Title II

and VI.

\- 95 percent for rehabilitation portion of any loan

and for Title VI acquisition loans.

\- Amortization period for Section 241(f) equity

loans ranges from 20 to 40 years.

\- Amortization period for Section 241(f)

acquisition loan remains 40 years.

VII\. POA Implementation Changes.

\- Requirements are provided for the summary of the POA

to be given to tenants.

\- Allowable oversight costs for nonprofit organizations

are provided.

\- Basic costs are described.

\- Owner options for tenant rent phase-in are described.

\- Tenants may change designations on the tenant profile

if income changes.

VIII\. Office Program Monitoring.

\- An individual must be designated in each Office to

enter and access MPPS to retrieve project

information.

\- Any information HUD provides to an owner is available

through the Freedom of Information Act.

\- A log must be maintained of disseminated information.

\- Liaisons should be set up with State and local

governments for assistance in disseminating

information.

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I. FIELD OFFICE (FO) PRESERVATION PROGRAM MANAGER. As of

October 1, 1993, there were a total of 643 Title II and Title

VI projects being processed. Because of the significant

workload it is important that a clear chain of command exists

to facilitate the accurate and expedient review of each

application. It is particularly important because of the

multi-disciplinary review process that is necessary to meet

the statutory requirements. The Director of Multifamily

Housing, under the reorganized structure, will have the

primary responsibility for the preservation program. Asset

Management (AM), Architectural Engineering and Cost (AE/C),

Valuation and Mortgage Credit (MC) will conduct their

respective reviews following the instructions provided by the

Director of Multifamily Housing.

While the procedure and the participant\'s role in the review

of applications is spelled out in Handbook 4350.6 and Notice

H92-54, a specific person in the Multifamily Housing Division

should be given responsibility for overseeing the Title II

and Title VI Preservation program process. The Director of

Multifamily Housing will appoint a Preservation Manager, so

that current and expanding workload can be properly managed.

Attachment F provides suggestions for establishing the

position.

II\. TITLE II PROCESSING CHANGES.

The following instructions provide an option to complete the

PCNA and establish the preservation value before submitting

the Plan of Action (POA).

A. TENANT NOTIFICATION.

Title III of the Housing and Community Development Act of

1992 requires tenants to be notified when owners exercise

their option to proceed with Title II in the same manner

as Title VI. The following instructions to process Form

HUD-9608B (9608B), Notice of Intent (NOI), Attachment A,

implements this requirement.

1\. Submission of the 9608B. The owner submits a 9608B

to HUD, tenants, and State and local governments in

the same manner as required for Title VI projects in

HUD Handbook 4350.6, Paragraphs 3-4 and 3-5, with the

exceptions noted below.

a\. The owner notifies tenants and governments of its

election of Title II.

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b\. The 9608B only allows the options to retain or

sell the project. If the owner wishes to prepay

the mortgage, he/she must follow the Title VI

process.

2\. Modification of tenant letter. We modified the

letter to tenants on the reverse of the 9608B to

reflect differences in the Title II program.

a\. HUD is not supplying translations of the letter.

b\. The Director of Multifamily Housing will urge

owners, tenant advocates, and government entities

to find ways to provide these translations to

tenants in projects where they are needed. One

good source is bilingual tenants living at the

project.

3\. Check for Tenant Representatives. The AM will check

with the Resident Initiatives Specialist (RIS) to

assure that all known tenant representatives have

been notified.

4\. Tenant Notification. The owner must give any tenant

occupying the project after submission of the NOI all

information given to existing tenants.

5\. Preservation Capital Needs Assessment (PCNA) Tenant

Notification.

a\. Tenant Notification of PCNA requirements are

described in:

1\. HUD Handbook 4350.6, Paragraph 5-4.A, 5-5,

5-6, 5-7 A through 5-7 C, and 5-7 E; and

2\. Paragraph III. A. of this Notice.

b\. Modify the \"Notice to Tenants,\" Attachment B,

deleting references to the Resident Homeownership

Program that is only available under Title VI.

B. COMPLETING PCNA.

Notice H94-22 requested FOs initiate PCNAs on all Title

II eligible projects in lieu of waiting for POAs to be

submitted. In this way potential PCNA backlogs could be

avoided and the completed PCNA would be readily available

to incorporate in the appraisal process that begins with

the POA submission. However, Title II legislation does

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not require a POA to be submitted within a specific time

frame, accordingly, there cannot be any absolute

assurance that a PCNA completed before the POA submission

will not have to be revised.

In the interest of trying to reach a more cost effective

approach, Title II PCNAs should now only be commenced on

projects whose owners have initiated participation in the

program by submitting a Form HUD-9607B which we believe

indicates a commitment to complete the process in a

timely manner. Upon completion of the PCNA it is

forwarded to the owner.

C. APPRAISAL OPTIONS.

To further parallel Title VI and provide the capability

to establish a preservation value prior to the POA

submission, upon receipt of the PCNA, the owner has two

options regarding the submission of the appraisal:

1\. An owner may submit an appraisal within 60 days.

a\. Valuation then has 60 days to:

1\) Review the appraisal;

2\) Make any necessary adjustments or perform its

own appraisal; and

3\) Provide the value determination to the owner.

b\. The owner then has an additional 6 months from

the date of the HUD value determination to submit

a POA.

2\. An owner may submit the appraisal along with the POA

within 6 months. All tenant notification

requirements of Title VI apply.

D. MAXIMUM TITLE II SECTION 8 CONTRACT RENTS.

At POA approval, Section 8 Contract Rents will be limited

to the lower of Fair Market Rent (FMR) or Project

Specific Rent (PSR). The PSR is described in Paragraph

IV.C.2. This term is being substituted for the term,

Comparable Market Rent, used in Notice H91-29, for

purposes of clarity.

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III\. TITLE II AND VI PROCESSING CHANGES.

A. ACCESS TO CFS/TRACS.

Upon receipt of an initial NOI Form HUD-9608, or 9608B,

The AM should access the CFS\\TRACS system to inquire

about the following:

1\. All Section 8 Contracts outstanding and closed for

the project.

2\. Number of LMSA units associated with the project.

3\. Number of 236 or BMIR units associated with the

property as appropriate.

4\. Current tenant profile information.

Use CFS/TRACS if there are conflicts with other sources

of information.

AM should record this information, and use it to initiate

the preservation processing file for the project.

B. PCNA TENANT NOTIFICATION.

1\. Tenant input. Throughout the process tenant input is

mandated by Statute.

2\. Failure to Notify Tenants. If tenant notification

requirements are not followed when scheduling the

PCNA, it may cause substantial delay in the

completion of the PCNA. A revised PCNA could require

revisions to the appraisal and the entire process may

be prolonged for a period of months.

3\. New Tenant Notification Forms. Attachments B, C, and

D of this Notice will help make sure there is

adequate tenant input.

a\. Attachment B is a revision to HUD Handbook

4350.6, Appendix 5-1A. The owner must post it to

notify tenants of the PCNA and other issues.

b\. Attachment C is a PCNA survey form which tenants

may voluntarily complete and submit to HUD or a

tenant representative for consideration by the

PCNA contractor.

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c\. Attachment D is the Notice advising tenants of

the date and time of the PCNA and Exit

Conference.

4\. Translations. Translations of Attachments B, C

and D.

a\. Copies of Attachment C translated into Spanish

and Russian will be forwarded to all FOs by HUD

Headquarters.

b\. Send to Preservation Division in Headquarters

copies of any translation of the attachments

prepared by the FO, the owner, the tenant

advocacy group or a tenant.

c\. If you need a translation, check with the

Preservation Division to see if it is available.

C. ARCHITECTURAL, ENGINEERING AND COST (AE/C) PROCESSING.

1\. Procedural Change. Title II PCNAs, will be performed

as indicated in paragraph II. B. above, when a Form

HUD-9608B, NOI is received by the FO starting the NOI

stage. Title II instructions for performing PCNAs

shall be used.

2\. PCNA Format. Instructions for Titles II and VI do

not require PCNAs be presented in a uniform format or

a summary of the PCNA analysis. As a result,

Valuation and AM waste significant time looking for

vital information to complete their portion of the

processing.

To speed up processing, PCNAs prepared by HUD AE/C as

of the effective date of this notice, must include a

summary of the PCNA analysis and provide the results

deliverable in the uniform format prescribed below.

For PCNAs performed by Contractors as of the

effective date, AE/C will prepare a summary, only.

Until instructions (Titles II and VI) and contract

exhibits are revised, AE/C will request contractors

performing PCNAs for HUD to provide summary data and

the deliverable in the same format.

a\. Cover Sheet must include:

1\) The project name, number and location.

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2\) Name, address, and telephone number of the

preparer(s).

b\. Table of Contents.

c\. Summary of PCNA Analysis. See Attachment E for

required information and format.

d\. Project description.

e\. Project Inspection Report(s).

f\. PCNA Work Write-Up.

g\. PCNA Cost Estimate(s).

h\. Computation of Initial Deposit to the Reserve for

Replacement Account.

i\. Engineering and Specialty Reports.

j\. Correspondence and Documentation relevant to PCNA

findings and conclusions.

k\. Copy of Local Government Code Officials Report.

l\. AE/C Processor\'s Log.

m\. Required Statements and Determinations.

3\. Required Repairs. The required repairs portions of

the work write-up instructions of Notices H 93-21

(Attachment 1) and H 92-54 (Attachment 4), prohibit

including new amenities, facilities and equipment in

the property, unless it is determined by HUD to be an

operational/energy upgrade. These instructions are

revised to prohibit the replacement of items that are

operational and functional and to provide that

inconsistent items be corrected.

a\. Operational and functional items may be repaired

as needed, but are not to be replaced, unless,

repair of the item is not possible. The only

exception to this rule is replacing items that

are operational and functional, but inconsistent

with other existing materials, surfaces, etc.

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b\. An inconsistent item may be a material, surface,

appliance or piece of equipment that is

incompatible with the same or corresponding item.

They typically have a negative impact on the

marketability of the project.

1\) AE/C is responsible for making determinations

of inconsistent items.

2\) The Owner/Purchaser must correct inconsistent

items. AE/C will include in the scope of

repair(s) and/or replacement(s) to correct

the item(s) in the required repairs list of

the PCNA work write-up. These items must be

categorized separately and labeled

Inconsistent Items.

3\) Before making the work write-up requirements,

give consideration to proposing the most cost

effective and efficient method of correction.

4\) Examples of inconsistent items are:

a\) Tile floors containing an abundance of

mismatched or non-conforming (style or

color) tiles.

b\) Kitchen appliances with mismatched

colors.

c\) Non-conforming or dissimilar (i.e.,

material, size, style, etc.,) kitchen

cabinets.

4\. PCNA Definitions. Many inquires and questions have

been raised relative to terminology used in PCNA

instructions. The intent of the definitions provided

below is to facilitate a more consistent approach to

making PCNA work write-up requirements.

a\. Required Repairs are repairs, corrections, and

replacements needed to restore a property back to

its original physical standards.

b\. Original Physical Standards mean that the

property is in \"good\" condition and that it is

functional and operational. It does not mean

that the property is in a \"new\" or mint

condition.

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c\. Good Condition means that the property meets

local codes and Housing Quality Standards and

there are no inconsistent conditions.

d\. Operational/Energy Upgrades are defensible

improvements that will elevate the efficiency of

how a property functions and/or its energy usage.

Energy upgrades generally result in cost savings

to a project due to reduced energy consumption.

e\. Deferred Maintenance Items are minor non

repetitive repairs that will continue to be made

by management during the normal operation of the

project. These items are not eligible to be

included in the Required Repairs list.

f\. Routine Maintenance Items are items that may be

minor, but are repetitive and require repair,

replacement, or correction with other Required

Repairs.

g\. Regulatory Repairs are repairs resulting from

lead based paint and asbestos hazard abatement,

and Section 504 compliance requirements.

Regulatory repairs that are a requirement of a

local jurisdiction, are determined to be a local

appraisal practice or are necessary to be

marketed conventionally by Valuation, must be

categorized as a Required Repair.

5\. Revised Method for Computing the Initial Deposit to

the Replacement Reserve (IDRR) Account. AE/C

prepares an analysis of the remaining useful life of

short lived building components and systems, and

other project features. AM uses this to evaluate the

adequacy of the replacement reserve account and any

necessary initial deposit to that account.

a\. Eligible items that may be included in the

schedule are:

1\) Replacement of refrigerators, ranges, and

other major appliances in the dwelling units.

2\) Replacement of kitchen and bathroom sinks and

counter tops, bathroom tubs, water closets

and kitchen cabinets.

3\) Replacement of roofing systems, including

replacement of gutters, downspouts, and

related eaves or soffits.

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4\) Replacement of major plumbing and sanitary

systems or components.

5\) Replacement of central air conditioning and

heating systems or components including

cooling towers, water chilling units, water

heaters, furnaces, boilers, exhaust fans, and

fuel storage tanks.

6\) Overhaul of elevators.

7\) Major repaving/resurfacing/sealcoating

(sidewalks, parking lots, and driveways).

8\) Repainting of the entire building exterior.

9\) Replacement of exterior (lawn) sprinkler

systems when already included in a project.

b\. Ineligible items that may not be included in the

schedule are, but are not limited to:

1\) Items proposed to be replaced as part of the

PCNA work write-up.

2\) Items whose estimated remaining useful life

exceeds 1/2 the original (first) mortgage

term.

3\) Painting of interior spaces.

4\) Replacement of individual dwelling unit air

conditioning components such as fan motors

and window unit compressors.

5\) Caulking and sealing.

6\) Window screens.

7\) Replacement or purchase of maintenance tools

and equipment such as lawn mowers or snow

blowers.

8\) Office equipment.

9\) Replacement of fire extinguishers.

10\) Items generally considered routine

maintenance.

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c\. Prepare a schedule to estimate the remaining

useful life of all eligible short lived building

components equipment, etc., included in the

project.

1\) To derive the remaining useful life of an

item subtract the actual age of the item from

the estimated economic life of the item.

2\) The schedule shall provide a description of

the item, actual age and estimated economic

life of the item using the format shown

below.

Sample #1:

Est.

Est. Remain.

Econ. Actual Useful

Description Life Age Life

Refrigerators 15 5 10

3\) Rearrange the items in the schedule in

ascending order of groups of items in

increments of 5-year periods based on the

estimate of remaining useful life of items.

The group whose useful life is estimated to

expire within the first 5-year period will be

listed first.

4\) Estimates of economic life for items are to

be developed and updated annually by each FO.

Data should be obtained from material

manufacturers and suppliers and should be

adjusted based on performance under local

conditions.

d\. Prepare a 100 percent replacement cost estimate

(less salvage) for each item in the group whose

estimated remaining useful life is expected to

expire within 5 years.

1\) Include the sum of the costs of labor/

installation, materials, and appropriate

fees, when applicable. Using a cost

adjustment factor for time, project the cost

of each item from the date (month and year)

of the estimate to the expected expiration

date. The sum of the estimated cost is the

total initial deposit.

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2\) Davis Bacon Requirements are not applicable,

therefore, the costs of labor shall not

include the provisions of Davis Bacon.

3\) Identify the location of items, if required

for clarification.

6\. Evaluation of 10 Year Group. The total initial

deposit amount established in 5d above should be

satisfactory to provide for any anticipated

replacements which may occur within the first 5-year

period. However, to assure that adequate funds are

maintained to replace items whose cost may be

considered weighty in years 6 through 10, an

additional evaluation must be made to determine

whether annual deposits to the reserve account are

sufficient.

a\. Review the 10 year group (2nd) to determine if

there are notable items whose replacement costs

raises concerns that there may not be ample funds

available to cover years 6 through 10.

b\. Prepare a separate list of notable items and

estimated costs to replace them using the

instructions of 5d above. This is only required

when notable items that raise concern have been

identified.

c\. The list and cost estimate of notable items must

be forwarded to AM.

7\. AM Determination of Adequacy of Reserve Account

Funds.

a\. AM determines the adequacy of the funds in the

existing reserve account. Compare the total

initial deposit provided by AE/C with the minimum

amounts derived using the method described in HUD

Handbook 4350.1 REV-1, paragraph 4-11. It should

be noted that the minimum threshold of 144 (12

years) times the initially established monthly

deposit prescribed in 4350.1 has been modified to

use 60 months (5 years). This is more agreeable

with the new methodology. Use the greater of the

following to determine the adequacy of the

existing reserve account.

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1\) The initial deposit determined in 5d above.

2\) The initially established monthly deposit

times 60 (5 years); or

3\) At least \$1,000 per unit.

b\. The amount established in 7a above should provide

for any anticipated replacements which may occur

within the first 5 year period. To provide that

adequate funds are maintained for the replacement

of high cost notable items in years 6 through 10,

an additional evaluation must be made to

determine whether annual deposits to the reserve

account will be are sufficient.

1\) Use the information included in the list of

noted items and the cost estimate provided by

AE/C to determine what amount, if any, should

be considered when determining adequacy of

the account.

2\) Derive the sum of annual deposits to the

reserve account made in years 1 through 5 and

add them to the amount determined in 7a

above.

3\) Derive the sum of the total estimated costs

of notable items and the amount determined in

7a.

4\) Compare the amounts derived in 2) and 3)

above. If the amount derived in 2) exceeds

the amount derived in 3), the adequate

reserve amount determined in 7a shall be

increased to cover the shortfall if

necessary.

5\) The Director of MF Housing must evaluate the

decision to increase the amount determined in

7a based on the costs of notable items.

c\. The Director of MF Housing must evaluate the

determinations made in 7a and b above and be

responsible for determining the adequacy of the

reserve account including the shortfall amount,

if any.

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d\. Owners must analyze the amounts in their reserve

fund in light of anticipated needs on an annual

basis for the first 7 years following closing of

the approved structure of the POA and request

appropriate increases to assure that adequate

reserve funds are available. Thereafter, owners

must perform needs assessments bi-annually. This

analysis must also be submitted with any

subsequent rent increase request.

1\) The owner follows the requirements of

paragraphs 4-10, 11 and 12 of Handbook

4350.1, and provide the results of the

analysis to HUD with:

a\) A request for appropriate increases, such

as annual deposits and/or rental rates,

if required.

b\) Updated information regarding

replacements of eligible reserve for

replacement items. The information shall

include the name and number of items,

when they were replaced, and an estimate

of their remaining useful life.

c\) Any other information required by HUD.

2\) AM reviews the information provided by an

owner and recomputes the annual deposit to

the reserve account to determine the adequacy

of reserve funds.

a\) Decides what action is necessary

following its review of all pertinent

data including but not limited to project

condition, Section 8 amendment

availability, resident input, resident

affordability, owner/agent past actions,

etc.

b\) May request, if needed, the services of

AE/C and Valuation.

8\. Commencement of Repairs.

a\. The owner may begin repairs following receipt of

HUD\'s list of PCNA repair items. However, prior

to making repairs, the owner must inform HUD

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of its intent to start, request a Preconstruction

Conference (see paragraph 10 below), and provide

to HUD a written plan for such repairs.

b\. No inspection of completed repairs will be made

until subsequent processing and no modifications

will be made to the PCNA until the POA is

received.

c\. Subsequent AE/C and Valuation POA processing must

adjust the results of previous PCNA processing to

exclude the scope and cost of work successfully

completed.

9\. Applicability of Federal Labor Standards Provisions.

Federal labor standards provisions, including the

payment of Davis-Bacon prevailing wage rates, are

applicable to construction work undertaken with

assistance provided through the Section 241(f) loan

program. Owners and HUD staff shall follow the

procedures contained in HUD Handbook 1344.1, Rev 1,

Federal Labor Standards Compliance in Housing and

Community Development Programs in carrying out their

responsibilities relating to these provisions.

Owners shall request a wage rate determination from

HUD Labor Relations staff and incorporate the wage

determination and the Form HUD-2554, Supplementary

Conditions of the Contract for Construction into any

contracts awarded for such work. Note: Construction

work performed by force account (workers employed

directly by the owner) is not exempt from labor

standards provisions.

a\. Repair Items Completed Before Submission of the

POA.

1\) When all PCNA repair items are completed

before submission of the application, labor

standards provisions are not applicable.

2\) When a portion of the PCNA repairs are

completed before submission of the POA

application, labor standards shall apply to

the work as of the date construction started.

Distinct and separate work items completed

before submission of the application may be

excluded from labor standards coverage when:

a\) They were identified for advance

completion in the owner\'s repair plan.

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b\) They were identified in the plan and

completed under a contract(s) separate

from any contracts awarded for covered

work, or by force account.

3\) Owners must receive prior approval from HUD

Labor Relations staff concerning work items

intended for exclusion from labor standards

coverage.

4\) Work items that were intended for advance

completion but which were not completed

before submission can not be excluded from

labor standards coverage.

b\. Definitions.

1\) Distinct means the scope of the repair

item(s) has been clearly identified.

2\) Separate refers to a distinguishable item(s)

which may include more than one type of

related or non-related repairs.

3\) Complete means that 100 percent of the work

involved with the item(s) has been done.

10\. Preconstruction Conference. An owner must request a

preconstruction conference with HUD prior to

undertaking any repairs.

a\. HUD\'s AE/C and Labor Relations staff shall

conduct the conference. The owner and any

contractors who will perform the construction

work must attend.

b\. AE/C will discuss HUD\'s role and requirements

during construction, and construction standards.

c\. The Labor Relations staff will discuss prevailing

wage requirements and the procedure for

submitting weekly certified payroll reports.

d\. AE/C and Labor Relations staff will review the

owner\'s written plan for completing repairs,

especially those repairs intended for completion

in advance of the POA application, and ensure

that the plan is acceptable to the owner and HUD.

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11\. Existing Project Replacement Reserve Funds.

a\. The owner may use funds from a project\'s existing

reserve account to replace items scheduled to be

replaced or repaired in the PCNA work write-up.

1\) Limit repair of items to the types of repairs

deemed eligible according to HUD Handbook

4350.1 REV-1, paragraph 4-9.

2\) Replacements made using these funds must be

completed before the owner submits the POA

application.

3\) Any replacements not completed before the

owner submits the POA application are subject

to the provisions of Davis Bacon.

b\. Later AE/C and Valuation POA processing must

adjust the results of previous PCNA processing to

exclude the scope and cost of work completed

using reserve funds.

C. SECTION 241(f) LOAN PROCESSING.

Instructions provide AE/C will review the submission

exhibits to determine if there are significant

differences (e.g., PCNA repairs and estimated costs)

proposed by the owner/purchaser that require modifying or

reprocessing the PCNA. Generally, processing will be

limited to making modifications. There were no

development provisions that an owner submit a list of

proposed items that were intended to improve the project

beyond PCNA standards. The following instructions

describe the procedure for requesting changes.

1\. HUD Handbook 4350.6, chapter 8, provides a method for

funding a federal incentives requested by an owner.

HUD may approve insured rehabilitation loans up to

the cost of the improvements. The intent of the

Department is to permit an owner or purchaser to

propose improvements to improve the economic life of

the project and its livability for the tenants.

2\. Proposals to improve a property are required to

contain a List of Proposed Improvements and estimated

cost with the POA application.

a\. This list may include items that:

1\) Enhance living conditions,

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2\) Make a property more marketable,

3\) Extend the life of material,

4\) Enhance security, and

5\) Reduce maintenance cost.

b\. Examples of the types of items and improvements

that may appear on the list and should be

considered are as follows:

1\) Amenities that do not exist in the project

that are acceptable to HUD.

a\) Items included in HUD\'s List of

Acceptable Amenities are eligible and

will be approved.

b\) Valuation must review items not included

in the preapproved list for

acceptability.

2\) Replacing items that are operational and

functional may be included in the PCNA as a

required repair or may be included in the

computation of the initial deposit to the

reserve account if these items are nearing

the end of their useful life.

3\) Upgrading items that currently exist in the

project such as lighting to enhance project

security.

4\) Modernization of unit space, i.e., common

areas, kitchens and bathrooms and new

flooring is permitted.

5\) Energy upgrades not proposed as a required

repair, i.e., utility conversions, energy

efficient windows, boilers, etc.

c\. The list of proposed improvements may not

include:

1\) Items required by local codes or Housing

Quality Standards. They must be included in

PCNA required and regulatory repair lists.

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2\) Critical repairs and code violations. Repair

items that were known by an owner or tenant

purchaser, not disclosed at the time of the

PCNA. These items are not to be approved as

improvements.

3\) Items completed prior to submitting an

application for a NOI including items

completed using existing project reserve

account funds.

4\) New buildings and structural additions to

existing buildings.

5\) New wallpaper in units.

NOTE: Items that were inadvertently missed in the PCNA

that are proposed in the list of proposed

improvements, are to be excluded and placed with

other PCNA repairs. The PCNA shall be modified

to include the costs of these items.

d\. AE/C is responsible for reviewing and approving

the items included in the list of improvements in

accordance with the criteria established in b and

c above.

2\) Figure out which items will be approved in

accordance with the criteria established in b

and c above.

e\. AE/C determines the reasonableness of the cost

estimate submitted for HUD approval.

1\) Estimated cost of approved improvements

including Davis Bacon.

2\) Re-estimate and modify unreasonable costs.

f\. Give Valuation the determination of

reasonableness including; other PCNA

modifications:

1\) Cost of new required repairs without Davis

Bacon wage rates not covered in the original

PCNA which will have to be deducted from the

value agreed upon at the NOI stage of

processing.

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2\) Cost of repairs, required and regulatory

completed by the owner at the submission of

the POA.

g\. Valuation will recalculate the value and equity

based on a. and b. and the current balance(s) on

the outstanding mortgage(s).

h\. AE/C will also provide to Valuation the cost,

with Davis Bacon, of all the work that is

included in the repair/rehabilitation portion of

the Section 241 loan.

3\. Development of List of Acceptable Amenities.

Valuation will develop a List of Acceptable Amenities

for each market area within the FO\'s jurisdiction.

The POA submission may include a proposed list of

such amenities.

a\) Valuation prepares the list of acceptable

amenities.

1\) Using data obtained from comparables listed

on Form HUD-9184, Income and Market

Absorption Record or other sources, for

moderate income unsubsidized projects.

2\) Comparable projects are those constructed or

substantially rehabilitated in the last 15

years.

b\) Items selected for inclusion on the approved

list:

1\) Data must show that approximately three-fourths

(3/4) of the unsubsidized projects

surveyed contain each amenity.

2\) The Director of MF Housing may approve an

item if it can be justified in some other

manner.

c\) In some cases, it may be appropriate to indicate

that certain amenities are acceptable only for

certain unit sizes, or structure types. For

example, additional storage may be acceptable in

units with 3 or more bedrooms, but not in smaller

units.

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However, in most eligible projects, space in the

units will limit additional amenities, such as

half baths in three bedroom units, bathroom

vanities, etc.

d\) The list may include solar energy systems which

meet HUD standards. Justification, even though

their use in the market may not be sufficient to

meet the 3/4 rule, can be submitted to show

energy savings.

e\) Administratively it has been determined that

certain items shall not be included in the list

of acceptable amenities for any market area.

Ineligible items are,

o Swimming pools;

o Jacuzzi;

o Saunas

o Bowling alleys;

o Decks;

o Dishwashers

o Trash compactors; and

o Washers and dryers in individual units.

4\. Contingency Reserve.

a\) When preparing PCNA and HUD approved improvement

estimates include:

1\) A contingency reserve for substantial

rehabilitation projects; and

2\) A 10 percent contingency for all repairs and

improvements in nonprofit transfer projects

under Title VI.

b\) Compute the contingency reserve using the cost of

PCNA repairs, the HUD approved Owner\'s List of

Improvements, and appropriate fees. Do not

include the reserve for replacement estimate in

the computation.

5\. Estimate of Progress Schedule. The owner submits an

Estimate of Progress Schedule as part of the

submission requirements. AE/C evaluates the schedule

to serve the needs of the project regarding

construction planning.

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a\) The schedule shows:

1\) The anticipated start of construction;

2\) The estimated construction time; and

3\) Whether construction will be performed by a

contractor or project maintenance staff.

b\) Owners choosing to start repairs before

submitting an application for a POA must provide

the Estimate of Progress Schedule with the letter

to HUD requesting a preconstruction conference.

6\. Inspection Fees. Due to comments received from

private industry and field office staff regarding

high inspection fees to repair cost ratios,

outstanding inspection fee requirements for repair

projects are revised as follows.

a\) Equity Loan with No PCNA Repairs is \$0.

b\) Equity Loan with PCNA Repairs.

1\) 1 percent of total repairs, except the

minimum fee shall not be less than \$500.

2\) When the inspection fee is \$500 or less, the

Commissioner may waive it, if the mortgagee

agrees to make repair inspections in

accordance with HUD outstanding instructions

and certify to HUD that repairs have been

completed. The mortgagee may charge the

mortgagor an inspection fee not to exceed

\$500.

IV\. TITLE VI PROCESSING CHANGES.

A. CLARIFICATION OF NEGOTIATION OPTION BEFORE THIRD

APPRAISAL.

Some offices have negotiated preservation values while

others have altogether by-passed the process. The

inclusion of this discussion is intended to clarify this

option and remind FOs to explore it when appropriate.

Negotiation will alleviate the staff time required to

contract and review third appraisals and may reduce

program costs.

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Negotiation should be given consideration in the few

exceptional cases where (1) the HUD review appraiser

believes that market data, not considered by the HUD

contract appraiser, will clearly support a value greater

than 110 percent of his/her appraisal and (2) in the

review appraiser\'s opinion, the HUD contract appraiser\'s

justification for not considering this data is flawed for

one or more reasons. For example, the HUD contract

appraiser\'s response may not address the issue, may not

be market supported, or may indicate an apparent

unfamiliarity with local market conditions.

Negotiation may also be used to make retroactive

adjustments to appraisals that are submitted late as

explained under IV. D. below.

Negotiation is a separate task and should not be

construed as modifying either contract appraisal. The

HUD negotiating appraiser derives an independent estimate

of value that must be supported by market data. How

values are derived must be fully documented in accordance

with the Uniform Standards of Professional Appraisal

Practice (USPAP). In a negotiating scenario, the

Director of Multifamily Housing or designate may conduct

the negotiations within the frame work of the appraised

value documented by the HUD review appraiser. The

negotiating appraiser must take full responsibility for

the negotiated value. Portions of the contract

appraisal(s) may be used to document the negotiated

value. The aforementioned \"band of agreement\" adjustment

of 10 percent does not apply to negotiation and the

negotiated value cannot exceed the owner\'s contract

appraisal value.

The objective of negotiation, in the context of the

program, is not to achieve a conciliatory midpoint

between values as in arbitration, but rather as

emphasized above, negotiated values which are supported

by market data and comply with USPAP.

Negotiated values should also be reported on Form

HUD-9607 by penciling in a line item under Section I and II.

B. DEFINITION CHANGE. Definition of Multifamily Rental

Housing under Title VI Extension Preservation Value has

been expanded to include some types of Elderly Housing.

a\. Qualified project types which do not require

state licensing, such as:

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1\) Congregate Elderly

2\) Retirement Service Center, excluding health

care services

b\. Elderly projects which will not qualify:

1\) Nursing Homes - Skilled and Intermediate Care

2\) Board and Care or Assisted Living Facility

c\. The appraisers when determining value in these

cases will have to provide a market analysis

which documents that there is market for these

units and the absorption rate the project will

reach sustaining occupancy as per the market

rates developed in the appraisal which are based

on market rents. Typically, these congregate or

retirement service center type projects have a

narrow band of the prospective tenants that are

willing and able to pay such charges, thus an

analysis documenting that a market exists is very

important.

d\. The appraisals used to support the values issued

on the Form HUD-9607 are deemed good for the

purpose of approving the POA for a period of 30

months from the date the Form HUD-9607 is issued

by the Department to the Owner.

C. REVISING CURRENT INSTRUCTIONS TO INCLUDE PREVAILING LOCAL

MARKET AMENITIES IN ESTIMATING THE PREVAILING MARKET

RENTS (PMRs) AND INTRODUCING PROJECT SPECIFIC RENTS

(PSRs).

Previous Title VI instructions required project rents be

estimated from two different perspectives. Unit rents

are initially estimated by the contracting appraisers in

determining preservation values. Second, previous

instructions to complete the Form HUD-9607 require the

HUD staff appraiser to estimate the PMR\'s which are based

on the projects specific characteristics after repair.

On this point we have revised our instructions, effective

immediately, to require the PMRs to reflect prevailing

market features and amenities and not the actual project

characteristics after repair.

Notice H94-22 requires Valuation to provide AM estimated

market rents for the subject project based on the

property\'s actual characteristics after repair. These

rents would be used to set rents for the non-Section 8

tenants. Further, H94-22 states PMRs could be used for

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this purpose. However, due to the new requirement that

PMRs must reflect prevailing market amenities, PMRs are

no longer appropriate. The market rents for the

non-Section 8 tenants hereafter will be referred to as

Project Specific Rents (PSRs). The discussion below

explains how the PMRs and PSRs are derived.

1\. PMRs. The PMRs provide a cross-check of the FMRs to

assure the latter reflects a prevailing unsubsidized

rent, including utilities and amenities, which would

be required to obtain rental housing of comparable or

modest design within the subject property\'s market

area. Therefore, the PMRs, like the FMRs, include a

utility allowance or the tenant paid charge for

utilities (formerly called Personal Benefit Expense)

and prevailing market amenities and features to

derive a PMR indicative of the total market tenant

charge.

Since the PMRs now reflect prevailing amenities, the

PMRs and the appraisal unsubsidized rents, which take

into consideration similarly defined upgrade

improvements, could be interchangeable with the

exception that the PMRs must always reflect the full

utility allowance. However, if the HUD review

appraiser is uncomfortable using the appraisal rents

as PMRs because the comparables are not from the

relevant local market area or due to the selection of

upgrades or lack thereof, the HUD review appraiser

may take the following approach to estimate the PMRs:

a\. Use the List of Acceptable Amenities, (developed

by Valuation to assist AE/C in their review of

requested improvements to develop a prevailing

market model of a one bedroom unit, etc. Enter

this data on the Form HUD-92273 (92273), under

subject property characteristics.

b\. Under columns A through E of the 92273 list the

Relevant Local Market Study comparables provided

by the HUD contract appraiser or comparables

independently selected.

c\. Adjust for differences in characteristics between

the prevailing market model(s) and comparables.

Correlate the adjusted rents to derive PMRs for

each unit type.

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2\. PSRs. The PSRs are the market rent that unsubsidized

tenants would reasonably expect to pay for their

subject unit based on actual project conditions after

repair. PSRs are also derived from a market

comparability analysis but adjusted to the actual

project characteristics (as opposed to prevailing),

including any PCNA/POA repairs that are to be

completed.

The review appraiser performs this analysis at the

NOI stage since AM needs a preliminarily estimate of

the PSRs at this time. In lieu of starting this

analysis from scratch, the HUD review appraiser may

use the PMR analysis. However, substitute the

prevailing model characteristics for the subject\'s

actual characteristics plus any PCNA improvements.

As described above under PMRs, next make any

necessary adjustments and correlate the individual

unit rents. The rent for the non-Section 8 tenants

will be the lowest of (1) 30 percent of the tenant\'s

income, (2) FMR, or (3) PSR. The PSRs should be

attached as an addendum to the Form HUD-9607.

The PSRs will be maintained and updated annually

during the annual rent increase process if the PSRs

affect the total tenant rent cap.

3\. Federal Cost Limit (FCL). The PMRs and FMRs used to

complete the 9607 FCL analysis at the NOI stage will

also be used at the POA stage. The PSRs will be

adjusted at the POA stage if warranted as a result of

changes in market conditions.

D. APPRAISALS SUBMITTED LATE. There have been some inquires

by FOs as to what procedures should be followed when

either contract appraiser is late submitting the

appraisal to HUD for review. Instructions state

appraisers have 120 days to complete the appraisal. This

stipulation is agreed to by the appraisers when the

contract is let and, therefore, the appraisers should be

held to this agreement.

Moreover, since preservation values can be set by

comparing the estimated value of one appraisal to the

other, it\'s absolutely essential that the appraisals be

nearly the same date. It has always been the

Department\'s intention that the date of value of the

appraisals would be a date beginning with the date of the

NOI submission up to the point the appraisals are

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submitted for review and exchange. If the FO believes

the subject property is located in a volatile market at

the time, whereas 120 days or less could significantly

alter values, both contract appraisers should be

requested to estimate values as of the same date.

If one or possibly both appraisers have missed the 120

day deadline and HUD and the owner agree to salvage the

work that has been completed, before going to a third

appraisal, the following approaches may be taken when:

a\. either appraisal is late and due to a significant

spread between the dates of value, it is necessary to

make a retroactive adjustment to bring the most

recently submitted appraisal in line with the

appraisal submitted on time, request:

1\) contracting appraiser to update.

2\) If contractor refuses Valuation may use the

negotiation option to update.

b\. both appraisals are late and the difference between

the dates of value do not require a time adjustment.

Conduct the review process as if submitted on time.

c\. either appraisal is late. Appraisal submission time

frames are statutory. A late appraisal could

indicate a reoccurring pattern and further delays in

preservation processing. Discuss with the

contracting officer what measures can be taken to

prevent future delays. Some FOs have had success

cancelling arrangements with appraisers that have

been delinquent.

E. REVIEW OF THIRD APPRAISALS.

This is just a reminder that contracting of appraisal

review services is not limited to the initial appraisals

but also may be extended to review of the third

appraisal. This should be a time saver for FOs during

peak work loads.

F. ADJUSTMENT OF PRESERVATION VALUES AT POA STAGE.

Preservation Values (extension and transfer) are derived

as a result of deducting various conversion cost

components from the unsubsidized value at the NOI stage.

Issuing the Form HUD-9607 to the project owner symbolizes

an agreement of preservation value(s) but only up to the

point the POA is submitted.

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1\. Upward Value Adjustment.

A provision to modify NOI preservation values is

necessary in order to allow for potential changes in

the amount of \"required repair\" conversion costs

which can be of benefit to the Department and program

participants. NOI \"distinct and separate\" (see III.

C.) \"required repairs\" that are 100 percent complete

before the POA submission and acceptable by AE/C,

shall be deleted as required repairs. This

adjustment will have the effect of increasing the

owner\'s equity by 70 percent of the costs of the

completed work and decreasing the 241(f) loan by 100

percent of the costs of the completed work.

2\. Downward Value Adjustment.

Since purchasers are not involved in transfer

preservation processing until the POA stage or after

the PCNA is completed, the flexibility to adjust the

scope of required repairs will provide an opportunity

to request consideration of improvements not

previously identified. Similar to the treatment of

additional required repairs that are identified by

AE/C as a result of a significant time lapse between

the NOI PCNA and POA submission, repairs that are

approved under the POA stage that bring the property

to a \"good condition\" will also have the effect of

decreasing the NOI preservation value.

3\. No Value Adjustment.

Improvements requested and approved by AE/C under the

POA stage by the stay-in owner or purchaser that

exceed the definition of required repairs (see III.

D.) are not considered to calculate the preservation

value. Such improvements would not be required to

bring the property to a \"good condition\" or would not

be encountered in the process of converting the

property to an unsubsidized use.

Note that only POA changes in the amount of required

repairs costs can have the effect of modifying NOI

preservation values. The NOI unsubsidized value and

any amounts indicated for upgrade improvements and

net discounted conversion costs cannot be changed for

30 months from the date the Form HUD-9607 is issued

to the owner.

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G. CHANGES TO THE ADVERTISING PROCESS.

Second NOI starts the required advertising by the

Department. We have found that the current instructions

to the FO are misleading and cause excessive work in the

field. Therefore, we are modifying HUD Handbook 4350.6,

Chapter 7-3, B-3 which states: \"Place notices in the

local minority newspapers and newsletters in the project

area at the times and manner shown in Paragraphs B.1. and

2\. above.\" to read \"Place notices in the significant

local minority newspapers and newsletters in the project

area . . .\" FOs should not send lists of media

publications in the area without winnowing out

inappropriate publications such as \"Piscataway Business

Journal\" or the \"Washington Teamster.\"

H. CREDIT APPROVAL OF NONPROFIT SPONSOR/MORTGAGOR MOVED TO

EARLIER STEP.

At the receipt of the Bona Fide Offer, Asset Management

(AM) staff, in consultation with the Resident Initiative

Specialist (RIS) and the Multifamily Mortgage Credit

Examiner (MCE), will evaluate the proposed nonprofit

sponsor/mortgagor, including community based

organizations and residents (with the exception of

resident homeownership applications). AM will conduct

the review in accordance with outstanding Transfer of

Physical Asset instructions contained in Chapter 13 of

Handbook 4350.1 REV-1 as modified by ATTACHMENT G, which

lists the required documents to be submitted with the

Bona Fide Offer.

The submission package to the HUD FO must include all

necessary documents which would normally be submitted

with the credit package when a Section 241(f) loan

application is made. Review and approval of the

nonprofit entity will be required at the Bona Fide Offer

submission stage. In reviewing the Section 241(f)

application, the MCE will review financial statements and

the financing plan, if applicable, of the nonprofit and

perform a credit investigation on the nonprofit\'s

operating officers (President, Vice President, Secretary,

and Treasurer).

I. CONSULTANT (AND THEIR FEE STRUCTURE) APPROVAL MOVED TO

THE EARLIEST STEP.

At the same time as the credit approval of the nonprofit

is reviewed, if the nonprofit group is using a

consultant, the necessary documentation for approval of

the consultant as listed in HUD Handbook 4500.1 REV-2

must be submitted for approval. Review the

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qualifications and fee structure of the proposed

consultant based on the instructions contained in

Handbook 4500.1 REV-2. The contract should be a fixed

price contract and be specific in the duties that will be

performed, the point at which a portion of the fee is

considered earned and the source of funds anticipated for

the payment of such fees. Care should be taken that no

fee is paid twice from various sources. In addition, the

consultant should not be paid for performing duplicate

services of the lender or other members of the

development team.

J. POA SUBMISSION REQUIREMENTS (COMBINING THE POA, TPA AND

SECTION 241(f) APPLICATION REQUIREMENTS.)

1\. COMBINED TPA/241(f)/POA Application. APPENDIX H

provides a check list with the combined documentation

for all three processing steps. This should

eliminate the confusion over documentation

requirements that overlap.

2\. TPAs in Non-Insured Projects. For sales of

non-insured projects, HUD\'s concern is with the

eligibility of the purchaser.

a\. HUD is not concerned with the requirements of the

Transfer of Physical Asset (TPA) application.

b\. Lenders set their own standards and have their

own application procedures.

V. PRESERVATION TECHNICAL ASSISTANCE GRANT PROCESSING.

A. PROCESSING PRESERVATION TECHNICAL ASSISTANCE GRANTS.

The September 3, 1992, NOFA for Preservation Technical

Assistance Grants requires approval, deficiency issuance,

or rejection within 30 days of receipt of application.

1\. Processing Deadlines. FOs are consistently missing

this 30-day deadline. Where FO approved grants,

grantees are seeing significant delays in grant

execution and authorization into the electronic

transfer funding system (LOCCS/VRS). The Department

seeks to encourage nonprofit purchasers under

Preservation where possible. Because the

Preservation program is time-sensitive by nature,

delays in grant approval and in subsequent funding

has, in some cases, created problems for purchasers,

and may be causing owners to make alternative sales

decisions.

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2\. Shorten Delays. Please be aware that with prompt

PTAG processing, the time-frames for POA and TPA

approvals could be shortened.

3\. Amended Exhibits 3, 6 and 7. Please use the revised

exhibits included with this Notice as Attachment L in

lieu of the exhibits 3, 6 and 7 currently in the PTAG

Application Package. Advise applicants who have not

yet received approval that the new forms should be

completed prior to approval for the grant.

B. FHA APPLICATION FEES IN PRESERVATION TECHNICAL ASSISTANCE

GRANTS.

1\. FHA Application Fee. The Department is now allowing

FHA application fees as an allowable expense in PTAGs

and Technical Assistance Grant Program to be

administered by Intermediaries.

2\. No Duplication of Application Fees. Nonprofit

sponsors may not request reimbursement for such fees

in their loan application. FO staff reviewing

Section 241 loan applications for nonprofit sponsors

which request reimbursement of the fee should

determine whether a Technical Assistance Grant was

received by the sponsor and, if so, request

verification that the loan application fee was not

paid out of grant proceeds.

Accordingly the replacement cost will not include the

application fee if it is allowed in the grant.

Valuation must check with the RIS before including

this item in replacement cost estimate.

VI\. SECTION 241(f) LOAN PROCESSING CHANGES.

A. SECTION 241(f) EQUITY LOAN 5 YEAR ESCROW.

Title III of the National Housing Act of 1992 amended

Section 241(f) to allow 100 percent of rehabilitation

costs to be added to the equity or acquisition loan.

However, the requirement was not changed that 10 percent

of the Section 241(f) equity loan, including

rehabilitation financed under the Section 241(f) loan, be

placed in escrow for a minimum of 5 years to ensure

project compliance with Housing Quality Standards (HQS).

No such escrow requirement exists for Section 241(f)

acquisition loans.

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Requests were made to allow funds to be placed in the

Reserve for Replacement Account as a substitute for the

escrowed funds. This cannot be allowed since Reserve

Account funds must be accessible for designated purposes

while the ten percent reserve must be escrowed for a

minimum of 5 years. Therefore, no change is being made.

The mortgagor must set up an extension preservation

equity 5 year escrow, in the amount equal to 10 percent

of the total Section 241(f) loan for mortgagors/owners

who are retaining the project.

1\. The Escrow Funding. The escrow will be funded at

initial endorsement by the mortgagor entity, held by

the lender and controlled by the Secretary or a

Secretary approved State Housing Finance Agency.

2\. Release of Escrow. The escrow account will be

released to the owner 5 years after final endorsement

if the project has been in compliance with 24 CFR

248.147, Housing Standards.

B. CONSTRUCTION ESCROW UNDER SECTION 241(f) LOANS.

1\. Two Options. The Department has considered and

rejected the concept of funding a substantial

rehabilitation escrow. The mortgagor has two

options:

a\. Insurance of Advances; or

b\. Insurance Upon Completion.

2\. Work Completed Prior to Submission of POA. If the

repairs/construction work has been completed between

approval of the NOI and the submission of the POA the

work does not come under construction escrow

requirement.

3\. Uninsured Financing. If the POA proposes uninsured

financing, an escrow format may be used, however,

some guarantee must be present to insure the work

will be completed before receiving Preservation

Incentives in the rent structure.

C. SECTION 241(f) ACQUISITION LOAN PROCESSING.

1\. Transactions Costs and Related Expenses Funded Under

Section 241(f) Acquisition Loans for Priority

Purchasers. HUD will fund approved transactional

expenses (reasonable expenses associated with the

acquisition, loan closing and implementation of the

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POA) and soft costs associated with the transactional

costs. Listed below are reasonable transaction costs

and how they are handled:

Reasonable Transactional Costs included in the

Section 241(f) Loan but not normally included in HUD

Processing.

a\. Bond Fees and Discounts Included in the Mortgage

Transaction.

1\) Where a project is to be financed through the

sale of either taxable or tax-exempt bonds,

the maximum financing fees allowable in the

mortgage computation and recognizable for

cost certification purposes is 5.5 percent of

the mortgage amount. Any cost beyond the 5.5

percent must be paid from sources outside the

mortgage.

A typical but not inclusive list of bond fees

would contain, Trustee setup, underwriter\'s

fee, underwriter\'s counsel, bond counsel,

issuer\'s initial fee, bond printing expense,

rating agency fee, negative arbitrage and a 1

percent assignment escrow.

The maximum financing fee the mortgagee may

retain for its own account is 3.5 percent.

This 3.5 percent covers the costs of

origination, processing, underwriting,

closing and delivery (including the

mortgagee\'s legal fees), escrow monitoring,

permanent placement, etc. The remaining 2

percent (or such greater percentage as may

result from the lender reducing its maximum

retainable 3.5 percent fee) may be used to

offset the cost of bond fees.

2\) Discounts will be recognized only for those

actual costs charged by the permanent lender

which are determined to be eligible.

a\) Discounts charged for warehousing a

mortgage for future delivery as well as

those which may be charged by the interim

lender are not eligible for inclusion in

the determination of the maximum

insurable mortgage.

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b\) Discounts must be reasonable based on

current market conditions. In some

cases, discounts are used to buy down the

permanent rate to a below market rate.

This has the affect of inflating a

project\'s value and mortgage while

placing an undue risk on the insurance

fund. Therefore, do not include in the

mortgage computation discounts incurred

in a buy down situation that exceed

reasonable discounts based on current

market interest rate levels.

b\. Environmental studies prepared for the

purchaser\'s benefit.

c\. Operating deficit

1\) during construction/repair.

2\) during the approved rent phase-in period.

d\. Relocation Allowance. The priority purchaser

must submit a relocation plan. The Community

Planning and Development relocation specialist

will review and analyze the plan. An allowance

for relocation costs (not to exceed a total of

\$500 per household to be relocated) may be

included in the loan.

e\. Construction manager/clerk of the works where

there is a repair program. The scope of this

function is detailed in AIA Document B352 under

\"Duties, Responsibilities and Limitations of

Authority of the Architect\'s Project

Representative.\"

f\. Organizational costs incurred in establishing the

nonprofit purchasing organization.

g\. Tenant training and education costs incurred by a

priority purchaser which is not a resident

council purchasing the project under a homeowership

plan, may be reimbursed depending on the

need for the training and the reasonableness of

the costs.

NOTE: Seller financing is not permitted to cover

these transaction costs.

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2\. Debt-Service Percentages of Net Income For TITLE II

AND VI.

The debt-service coverages are revised as follows:

a\. Title II - 90 percent of Net Income for the

equity portion of the loan and 95 percent of Net

Income for both the repair/rehabilitation loan

and the outstanding federally assisted mortgages.

b\. Title VI.

1\) Extension - 90 percent of Annual Authorized

Return and 95 percent of Net Income for both

the Repair/Rehabilitation loan and the

Outstanding Assisted Mortgage(s).

2\) Acquisition, Repair/Rehabilitation and

Outstanding Assisted Mortgage(s) - 95 percent

of Net Income.

D. AMORTIZATION PERIOD FOR THE SECTION 241(f) LOAN.

1\. The amortization period of:

a\. An extension loan will not be less than 20 years,

nor more than 40 years, with no term of less than

a full year increment.

b\. An acquisition loan under Title VI is 40 years.

2\. Remarks. Valuation records the term of amortization

in Section O, \"Remarks,\" of the Form HUD-92264.

E. CLOSING. Projects will be closed using standard closing

procedures (see Handbooks 4430.1 REV-1, and 4440.1),

except that a Surveyor\'s Certificate and survey will be

required at the discretion of the Director of MF Housing.

VII\. POA IMPLEMENTATION CHANGES.

A. POA SUMMARIES.

The owner submits a copy of the POA Summary to HUD and

addresses each component of the POA in accordance with

the appropriate parts of the required submission package.

The owner must prepare the summary in layman\'s language,

so that all tenants will understand its content.

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After HUD accepts a complete POA, the AM will review the

POA Summary to ensure that it is comprehensive and

complete. If AM determines that the POA is incomplete

and/or the POA Summary is not comprehensive, they will

then reject POA and will require the owner to revise or

amend as needed. Language will be added to Chapter 8 of

the HUD Handbook 4350.6 to reflect this position.

Suggested forms for the summaries are contained in

attachment K.

B. OVERSIGHT COSTS.

Section 307(b) of the 1992 Housing and Community

Development Act added Oversight Costs as an allowable

annual expense for nonprofit purchasers of Preservation

properties. The regulation published July 13, 1993,

defined oversight costs to include staff, overhead, or

third-party contract costs for ensuring adequate

participation by the board of directors, facilitating

long-range planning by the board of directors, and

assisting owners in complying with regulatory, use, loan

and grant agreements. It is the intent of the

regulations to provide the nonprofit sponsor with

financial/technical assistance so that the board of

directors can make reasonable, informed, ownership

decisions - primarily as they relate to overseeing the

management company.

The Department believes that oversight staff should not

be duplicating activities that are the responsibility of

the management agent, but acknowledges that owner/board

training, capacity building and expert assistance, as

well as supportive service coordination to the residents

are required in these situations.

Therefore, limitations on oversight costs will be set as

follows:

1\. The annual oversight costs may not exceed the greater

of:

a\. \$10,000, or

b\. One percent of the project\'s preservation value.

2\. Additional expenses may be occasionally allowed, as

required, for maintenance of the nonprofit

organization itself, including changes in

organizational documents (articles and by-law

amendments). Tax returns, audits, or other required

annual filings will be allowed as an annual expense.

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The Director of Multifamily Housing has the authority

to adjust these standards based on the actual and

demonstrated costs for these services.

The Asset Management Branch will provide Valuation

with the determination of the oversight costs to be

included in the operating expenses on the Form

HUD-92264 and Form HUD-9607 (as revised) prior to the

completion of the Section 241(f) Loan Commitment.

Whoever is hired to provide the oversight function

may not have any identity of interest with the

seller, the former or present management agent, nor

with any member of the board of directors of the

mortgagor entity.

Upon a 90-Day notice project oversight funds will be

disallowed as an annual expense if there is less than

satisfactory management or maintenance or physical

maintenance of the project.

C. VARIABLE PHASE-IN.

A slower phase-in is sought by some owners who are

concerned about moderate-income tenants abruptly leaving

projects due to increased rents. Other owners want the

phase-in of rent increases to be completed as soon as

possible.

The concern with \"moderate-income tenant flight\" has been

dealt with in the instructions in IV.C.2. of this Notice

to cap the TTP at the PSR. In terms of flexibility in

respect to the phase-in of rent increases, Handbook

4350.6, Chapter 11 and Form HUD-90010 allows the owner

and the HUD Office several choices:

1\. POA Implementation. The owner may choose the rate of

phase-in for each tenant for which phase-in is

required. The range of these choices is limited by

the statutory minimum phase-in period and a maximum

period determined administratively by HUD. If Form

HUD-90010 is carefully followed, the range of choice

available to the owner will be automatically made

available. The owner should be aware, however, that

whatever choice is made at POA implementation for the

rate of a specific tenant\'s phase-in of rents, it may

not be changed during the phase-in period.

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2\. General Project Rent Increases. The phase-in form

allows owners to pass through a proportionate share

of any general project rent increases to the tenants

during the phase-in period. While it would not

affect the rent paid at the end of the phase-in, it

would have the effect of completing the phase-in more

quickly. If an owner chooses not to pass through the

operating costs to tenants during phase-in, it may

request the HUD FO to allow the phase-in to not

include the pass through. The FO should grant the

request unless it feels that project feasibility

would otherwise be threatened.

D. TENANT PROFILES.

HUD Handbook 4350.6, Chapter 11, discusses the

maintenance of tenant profiles. It states that a tenant

will retain its initial classification on the profile;

that is, that its classification at POA approval or upon

initial occupancy after POA approval, remains the same

for as long as the tenant continues to occupy the

project.

This instruction is now clarified. The owner continues

to initially classify each tenant residing in the project

at POA approval as very low-, low- or moderate-income.

The owner similarly classifies tenants moving into the

project after POA approval, upon occupancy. However, the

owner will now reclassify any tenant when an income

changes. A moderate-income tenant whose income decreases

to below the low-income limit may, therefore, be

reclassified and be eligible to receive Section 8

assistance, if available. This change in policy will

bring Preservation projects into conformity with

non-Preservation projects.

VIII\. OFFICE PROGRAM MONITORING.

A. PROJECT TRACKING SYSTEM. Using existing data from

the MPPS System, project by project time-frames can

be reported to an individual designated by the

Director of Multifamily Housing.

1\. Designate an Individual. This person would be

responsible for the preservation process reporting.

This individual will be given a means of accessing

the MPPS data which is appropriate for the LAN set up

in the Office where they are working and is

responsible for the monthly MPPS Report.

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a\. This individual may be the same as the current

MPPS contact.

b\. The MPPS system must be able to run off this

individual\'s PC either on the hard-drive or

through a designated floppy drive. This is

because a LAN based system will be too inflexible

and take much too long to get approval from IPS.

The drawback is that the system will have to be

serviced and maintained by preservation directly.

Given the need to provide quick and flexible

reporting in this dynamic process it is felt that

this is the best possible compromise available.

2\. The MPPS Report. The MPPS report provides basic

project information, as well as descriptions for each

processing level of the Title VI preservation process

(i.e., Appraisal Processing Stage, Sales Marketing

Stage (Sale Projects Only), POA Approval Stage, POA

Implementation Stage). Each processing stage will

have a report of an expected time-frame, as well as

an elapsed time for which the project has actually

done. Projects that have not completed a processing

stage will be categorized as \"On Target\", \"Possibly

Off Target\" or \"Off Target\". Projects that have

completed the processing stage will be classified as

\"Completed On Target\", or \"Completed Off Target\".

Record processing stages for a project as it reaches

that stage on a daily basis. In that way, the report

will also serve as a graphical gauge of the progress

the project has made in the preservation process.

3\. Designate a second individual as a back-up person to

operate this reporting system.

4\. In addition, we are attaching a Desk Log System as

Attachment I that can be used with each individual

Title VI Preservation case file to track the

processing and determine when follow-up is required.

B. INFORMATION DISSEMINATION.

1\. Freedom of Information. Any information HUD provides

to an owner is available under the Freedom of

Information Act (FOIA). The AM or the respective

Freedom of Information Officer in the FOs should see

if a State or local entity is interested in receiving

this information on an on-going basis.

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2\. Release of Information not covered by FOIA. The

appraisal reports for Title VI and the preservation

physical/capital needs assessments, under both Title

II and Title VI, should be made available to the

tenants, units of local government and the

prospective purchasers after they have been reviewed

and forwarded to the owner. The PCNA report should

have an attached cover letter explaining that the

PCNA report may be subject to change, and that the

conclusions contained in the report could be altered

at some point in the future. Additionally, the AM

should require the owner to certify that a copy of

the PCNA is delivered to a tenant representative by

the owner if such an entity exists. A log of those

who were sent a copy of the PCNA should be

maintained, so that if material changes are made to

the report, those modifications may be forwarded to

those people.

3\. Log of Disseminated Information. Maintain a log of

persons and entities receiving copies of the

appraisals and PCNA\'s. If any material

modifications are made to the original conclusions,

they can be forwarded as necessary.

4\. Do not make Title II appraisal reports available to

anyone except HUD staff or contractors charged with

reviewing these reports. The reports are made on

behalf of the owner for determining whether a higher

or better use exists for the subject project and its

value.

5\. AM staff and\\or Freedom of Information Officers

should strive to set up liaisons with State and local

entities that would care to assist us in

disseminating any of the information spoken of above

in the manner prescribed.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Assistant Secretary for Housing

\- Federal Housing Commissioner

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Notice of Intent (ELIHPA)

To Extend Low-Income

Affordability Restrictions

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form HUD-9608-B (6/94)

ref. Handbook 4350.7

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Notice of Intent (ELIHPA)

To Extend Low-Income

Affordability Restrictions (Continued)

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\* GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED \*

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form HUD-9608-B (6/94)

ref. Handbook 4350.7

47

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ATTACHMENT B

FIELD OFFICE LETTERHEAD

NOTICE TO TENANTS

On \_\_\_(date of NOI)\_\_\_ you received a Notice which said that there

will be an inspection to determine what repairs need to be made

by the owner or anyone who buys the project. If there are

repairs you would like to have considered, please submit your

list to the Housing and Urban Development (HUD) Office whose

address is shown above. You may also submit your list to any

tenant representative whose name and address is shown on this

letter, or another person or representative who the tenants

select to represent them. That representative can help to see

that your requests are taken into account. Although it is best

that the tenant representative lives at the project, it is not

necessary. You should have confidence in the person you select

and may change the representative whenever you choose. Instead

of writing your own letter, you may complete a copy of the survey

attached to this Notice. We recommend that tenant

representatives distribute copies of this survey to all tenants

in the project. Copies of the survey will also be available in

the project manager\'s office. You can get a copy there. If you

have comments on repairs or rehabilitation for the project, this

is the time to let us know.

You will only be given a few days\' notice of the date on which

the inspection is to be held and you will have to submit your

list before the inspection, so you may want to be sure to

complete it now. The owner will post the date and time of the

inspection within a day of learning of it. The tenant

representatives listed on the next page or any other tenant

representatives you select, are all invited to attend the

inspection.

At the time you are told the date of the inspection, you will

also be told the date, time, and location for a meeting following

the inspection. The purpose of this meeting will be to discuss

the repairs which need to be done. All tenants are invited to

attend the inspection and the meeting, but if you cannot attend,

a tenant representative can represent your interests.

HUD intends to give incentives to the owners or purchasers of

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, in order
to keep the housing

affordable for you. You will be advised of the steps taken and

decisions made during the lengthy process and will be given

further opportunity to comment.

There are a lot of decisions tenants can make in this process.

Tenants can apply for a grant to help them organize and explore

48

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their options. For instance, if the owner decides to sell the

project as a result of this process, a Resident Council organized

by tenants of the project may purchase the project. If the

tenants buy the project, you can either keep it for rental as it

is now, or convert it to a Resident Homeownership Program, which

means that tenants can each buy a share of the project or buy

their own apartments. Even if tenants do not buy the project,

only a purchaser which has tenant support can buy it for the

first six months after it is offered for sale. You therefore

want to be certain that any organization whose petition you sign

to buy the project, is the purchaser you want.

For further information about this matter please contact

(Resident Initiative Specialist) in your local HUD office at \_\_\_\_

(telephone number)\_\_\_\_\_\_\_\_\_\_.

The tenant representatives that we have contacted are:

\(1\)

Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Address:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

City and State:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Telephone Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(2\)

Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Address:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

City and State:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Telephone Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

If there are other representatives who should be contacted in the

future, please let (Resident Initiative Specialist) know.

Attachment: Capital Needs Assessment Survey

49

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ATTACHMENT C

BUILDING:

APARTMENT NUMBER:

ADDRESS:

OWNER:

DATE:

CAPITAL NEEDS ASSESSMENT/HABITABILITY SURVEY

Please fill out the Capital Needs Assessment Survey below for your

apartment and the project in general. Your input into this process

is the only way to be sure that your needs are taken into account.

The Capital Needs Assessment Process is a special inspection to

determine the upkeep plan of the building for the next 20 years.

Are there needed repairs or things that need replacing? Please

check the items as needed:

1\. KITCHEN

Windows, Screens or Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Floor No\_\_\_ Repair\_\_\_ Replace\_\_\_

Paint No\_\_\_ Repair\_\_\_ Replace\_\_\_

Base Boards (Broken & Cracked) No\_\_\_ Repair\_\_\_ Replace\_\_\_

Electrical Wiring No\_\_\_ Repair\_\_\_ Replace\_\_\_

Ceiling No\_\_\_ Repair\_\_\_ Replace\_\_\_

Door, Door Knob, Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Air Vent No\_\_\_ Repair\_\_\_ Replace\_\_\_

Holes No\_\_\_ Repair\_\_\_ Replace\_\_\_

Light Fixtures No\_\_\_ Repair\_\_\_ Replace\_\_\_

Walls No\_\_\_ Repair\_\_\_ Replace\_\_\_

Plumbing No\_\_\_ Repair\_\_\_ Replace\_\_\_

Counter Top No\_\_\_ Repair\_\_\_ Replace\_\_\_

Cabinet Doors No\_\_\_ Repair\_\_\_ Replace\_\_\_

Shelves No\_\_\_ Repair\_\_\_ Replace\_\_\_

Stove No\_\_\_ Repair\_\_\_ Replace\_\_\_

Refrigerator No\_\_\_ Repair\_\_\_ Replace\_\_\_

Disposal Unit No\_\_\_ Repair\_\_\_ Replace\_\_\_

Faucet or Faucet Handles No\_\_\_ Repair\_\_\_ Replace\_\_\_

OTHER:

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\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2\. BEDROOM:

Carpet No\_\_\_ Repair\_\_\_ Replace\_\_\_

Windows, Screens or Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Floor No\_\_\_ Repair\_\_\_ Replace\_\_\_

Paint No\_\_\_ Repair\_\_\_ Replace\_\_\_

Base Boards No\_\_\_ Repair\_\_\_ Replace\_\_\_

Electrical Wiring No\_\_\_ Repair\_\_\_ Replace\_\_\_

Ceiling No\_\_\_ Repair\_\_\_ Replace\_\_\_

Door, Door Knob, Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Air Vent No\_\_\_ Repair\_\_\_ Replace\_\_\_

Holes No\_\_\_ Repair\_\_\_ Replace\_\_\_

Light Fixtures No\_\_\_ Repair\_\_\_ Replace\_\_\_

Shelves No\_\_\_ Repair\_\_\_ Replace\_\_\_

Closet Doors No\_\_\_ Repair\_\_\_ Replace\_\_\_

OTHER:

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\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3\. BATHROOM:

Windows, Screens or Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Floor No\_\_\_ Repair\_\_\_ Replace\_\_\_

Paint No\_\_\_ Repair\_\_\_ Replace\_\_\_

Base Boards No\_\_\_ Repair\_\_\_ Replace\_\_\_

Electrical Wiring No\_\_\_ Repair\_\_\_ Replace\_\_\_

Ceiling No\_\_\_ Repair\_\_\_ Replace\_\_\_

Door, Door Knob, Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Air Vent No\_\_\_ Repair\_\_\_ Replace\_\_\_

Holes No\_\_\_ Repair\_\_\_ Replace\_\_\_

Light Fixtures No\_\_\_ Repair\_\_\_ Replace\_\_\_

Walls No\_\_\_ Repair\_\_\_ Replace\_\_\_

Bath Tub or Seals No\_\_\_ Repair\_\_\_ Replace\_\_\_

Shower or Seals No\_\_\_ Repair\_\_\_ Replace\_\_\_

Shower Head No\_\_\_ Repair\_\_\_ Replace\_\_\_

Shower Door No\_\_\_ Repair\_\_\_ Replace\_\_\_

Sink or Seal Leaks No\_\_\_ Repair\_\_\_ Replace\_\_\_

Faucet or Faucet Handles No\_\_\_ Repair\_\_\_ Replace\_\_\_

Heating System No\_\_\_ Repair\_\_\_ Replace\_\_\_

Toilet or Seals No\_\_\_ Repair\_\_\_ Replace\_\_\_

Toilet Seat or Lid No\_\_\_ Repair\_\_\_ Replace\_\_\_

Toilet Handle No\_\_\_ Repair\_\_\_ Replace\_\_\_

Toilet Leaks No\_\_\_ Repair\_\_\_ Replace\_\_\_

Toilet Noise No\_\_\_ Repair\_\_\_ Replace\_\_\_

Medicine Cabinet (Door) No\_\_\_ Repair\_\_\_ Replace\_\_\_

Cabinet or Cabinet Door No\_\_\_ Repair\_\_\_ Replace\_\_\_

Counter Top No\_\_\_ Repair\_\_\_ Replace\_\_\_

Tile No\_\_\_ Repair\_\_\_ Replace\_\_\_

Towel Bars No\_\_\_ Repair\_\_\_ Replace\_\_\_

Tissue Bar No\_\_\_ Repair\_\_\_ Replace\_\_\_

Plumbing No\_\_\_ Repair\_\_\_ Replace\_\_\_

Water Heater No\_\_\_ Repair\_\_\_ Replace\_\_\_

OTHER:

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4\. LIVING ROOM:

Windows, Screens or Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Floor No\_\_\_ Repair\_\_\_ Replace\_\_\_

Paint No\_\_\_ Repair\_\_\_ Replace\_\_\_

Base Boards No\_\_\_ Repair\_\_\_ Replace\_\_\_

Electrical Wiring No\_\_\_ Repair\_\_\_ Replace\_\_\_

Ceiling No\_\_\_ Repair\_\_\_ Replace\_\_\_

Door, Door Knob, Rubber Seal No\_\_\_ Repair\_\_\_ Replace\_\_\_

Air Vent No\_\_\_ Repair\_\_\_ Replace\_\_\_

Holes No\_\_\_ Repair\_\_\_ Replace\_\_\_

Light Fixtures No\_\_\_ Repair\_\_\_ Replace\_\_\_

Walls No\_\_\_ Repair\_\_\_ Replace\_\_\_

Heating System No\_\_\_ Repair\_\_\_ Replace\_\_\_

Carpet No\_\_\_ Repair\_\_\_ Replace\_\_\_

OTHER:

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5\. COMMON AREAS:

Storage Area No\_\_\_ Repair\_\_\_ Replace\_\_\_

Storage Area Key No\_\_\_ Repair\_\_\_ Replace\_\_\_

Parking Area No\_\_\_ Repair\_\_\_ Replace\_\_\_

Parking Area Poles (Columns) No\_\_\_ Repair\_\_\_ Replace\_\_\_

Security System No\_\_\_ Repair\_\_\_ Replace\_\_\_

Gate No\_\_\_ Repair\_\_\_ Replace\_\_\_

Gate Key No\_\_\_ Repair\_\_\_ Replace\_\_\_

Steps No\_\_\_ Repair\_\_\_ Replace\_\_\_

Laundry Door or Door Knob No\_\_\_ Repair\_\_\_ Replace\_\_\_

Laundry Sink No\_\_\_ Repair\_\_\_ Replace\_\_\_

Laundry faucet or Faucet Handles No\_\_\_ Repair\_\_\_ Replace\_\_\_

Laundry Window, Screens, or Seals No\_\_\_ Repair\_\_\_ Replace\_\_\_

Laundry Table No\_\_\_ Repair\_\_\_ Replace\_\_\_

Laundry Key No\_\_\_ Repair\_\_\_ Replace\_\_\_

Washing Machine No\_\_\_ Repair\_\_\_ Replace\_\_\_

Dryer No\_\_\_ Repair\_\_\_ Replace\_\_\_

Carpeting (Hall) No\_\_\_ Repair\_\_\_ Replace\_\_\_

Carpeting (Lobby) No\_\_\_ Repair\_\_\_ Replace\_\_\_

Door or Door Knob (Lobby) No\_\_\_ Repair\_\_\_ Replace\_\_\_

Door or Door Knob (Hall) No\_\_\_ Repair\_\_\_ Replace\_\_\_

OTHER:

54

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

6\. GENERAL BUILDING:

Roof No\_\_\_ Repair\_\_\_ Replace\_\_\_

Interior Walls No\_\_\_ Repair\_\_\_ Replace\_\_\_

Exterior Walls No\_\_\_ Repair\_\_\_ Replace\_\_\_

Pavement and Walkways No\_\_\_ Repair\_\_\_ Replace\_\_\_

Paint No\_\_\_ Repair\_\_\_ Replace\_\_\_

Termite Extermination No\_\_\_ Repair\_\_\_ Replace\_\_\_

Roach Extermination No\_\_\_ Repair\_\_\_ Replace\_\_\_

Rodent Extermination No\_\_\_ Repair\_\_\_ Replace\_\_\_

Plumbing No\_\_\_ Repair\_\_\_ Replace\_\_\_

Electrical Wiring No\_\_\_ Repair\_\_\_ Replace\_\_\_

Landscaping No\_\_\_ Repair\_\_\_ Replace\_\_\_

Mail Box No\_\_\_ Repair\_\_\_ Replace\_\_\_

Hand Rails No\_\_\_ Repair\_\_\_ Replace\_\_\_

Trash Bins No\_\_\_ Repair\_\_\_ Replace\_\_\_

Fire Door(s) or Door Knob(s) No\_\_\_ Repair\_\_\_ Replace\_\_\_

Fire Escapes No\_\_\_ Repair\_\_\_ Replace\_\_\_

Sprinkler System No\_\_\_ Repair\_\_\_ Replace\_\_\_

Balconies No\_\_\_ Repair\_\_\_ Replace\_\_\_

Elevators No\_\_\_ Repair\_\_\_ Replace\_\_\_

OTHER:

55

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Please explain any maintenance problems this survey did not cover.

You may comment on any remodeling you want done to bring your building
up

to safety standards (security, parking area, additional lighting, etc.)

or other changes to make living here better.

56

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ATTACHMENT D

NOTICE OF DATE AND TIME OF CAPITAL NEEDS INSPECTION

The inspection of the property which you were told about, will begin

on \_\_(Date/time)\_\_\_ and will last approximately \_\_\_(no.
hours/days)\_\_\_.

During the inspection, the inspector and other people (e.g., owner or

owner\'s agent, HUD staff, tenant representatives, etc.) may need to
visit

your apartment and you should be certain you are prepared for that
visit.

If you are not home during an inspection of your apartment, the owner
will

leave a note advising you that the inspector was there.

\_\_(Name of tenant representative(s)\_\_\_ may accompany the inspector
if

he/she/they wish. Any other tenant representative of your choosing may

also accompany the inspector.

There will be a meeting after the inspection to which all tenants are

invited. It is scheduled to be held on \_\_\_(Date/Time)\_\_ at
(location).

If you cannot be at this meeting, you may be represented by the

\_\_\_ (person/people)\_\_\_ shown above or any other representative of
your

choice.

Please be sure to give your list of required repairs or your answers

to the Capital Needs Assessment survey to your tenant representative or

send it to HUD at the address shown below before the inspection. If you

can\'t get your survey to HUD prior to the inspection, please provide it
to

the inspector at the start of his inspection.

ADDRESS OF LOCAL HUD OFFICE AND NAME AND TELEPHONE NUMBER OF A

HUD CONTACT PERSON

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ATTACHMENT E

SUMMARY OF PCNA ANALYSIS

Name of Project:

Project Number:

Prepared By:

COST SUMMARY OF PCNA REPAIRS:

with without

Davis Bacon Davis Bacon

A. Required Repairs \...\...\...\...\...\...\$\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_

B. Regulatory Repairs\...\...\...\...\.....\$\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_

C. Totals\...\...\...\...\...\...\...\...\.....\$\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_

D. Reserve Replacement Est. (without Davis
Bacon)\...\...\...\$\_\_\_\_\_\_\_\_\_

OTHER REQUIRED SUPPLEMENTAL ESTIMATES:

with without

Davis Bacon Davis Bacon

E. Section 504 Alterations\...\...\.....\$\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_

F. Reas Hypo Upg Improvmts. (if
requested)\...\...\....\$\_\_\_\_\_\_\_\_\_\_

OTHER DETERMINATIONS: (circle one)

1\. Is this a sub rehab project?\...\...\...\...\...\...\.... Yes or No

2\. Does the project contain (assumed)

asbestos containing materials\...\...\...\...\...\...\... Yes or No

3\. Does the project contain LBP?\...\...\...\...\...\...\... Yes or No

COMMENTS:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

58

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ATTACHMENT F

Multifamily Preservation Manager

The Multifamily Preservation Manager will be located in the \_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ and will report to the
Director of

Multifamily Housing or the Director of Housing. They shall

coordinate all activities related to the Preservation program in

the Field Office and will be responsible for:

o Being the Field Office resource person for preservation

knowledge;

o Timely and accurate reviews of projects involved in the

preservation program;

o Coordinating the team of loan servicers processing the

preservation project applications;

o Coordinating and facilitating teamwork between Loan

Management, Valuation and Architectural & Engineering, as

well as Legal, FHEO and others involved in the review of

preservation projects;

o Involving the Resident Initiative Specialist and keeping

others apprised of Technical Assistance activities;

o Providing technical support to preservation project loan

servicers and others involved in the process;

o Providing proactive program monitoring;

o Making sure that accurate and timely information is logged

into MPPS;

o Preparing progress reports on current Preservation activity;

o Making sure that the papers are prepared for funding of the

approved Plan of Action;

o Addressing the project needs after Plan of Action

implementation, such as physical inspection, occupancy

issues and others;

o Coordinating the final closing of the Plan of Action and its

ancillary 241(f) loans.

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ATTACHMENT G

REQUIRED EXHIBITS FROM NONPROFIT SPONSOR/MORTGAGOR

1\. Form HUD-3433, Request for Preliminary Determination of

Eligibility as a Nonprofit Sponsor and/or Mortgagor,

and supplemental documentation. Documentation must

contain, but is not limited to:

A. Detailed explanation of motivation for sponsoring

the acquisition of the project.

B. Copy of sponsor/mortgagor\'s charter and bylaws or

constitution as currently amended.

C. Copy of current effective ruling from the Internal

Revenue Service on sponsor/mortgagor\'s tax exempt

status.

1\) Copy of any ruling denying tax exemption.

2\) If a ruling is pending, explain the

application\'s legal and factual basis and

current status.

D. List of officers, directors or trustees of the

sponsoring group/mortgagor including home

addresses, titles of positions and their social

security numbers.

E. Resumes on all principals and staff who will

actively take part in acquisition, rehab and

management of the project.

F. Current financial statements (balance sheet,

profit and loss statement, and supporting

schedules) as well as statements for the past

three years (statements of the sponsor/mortgagor,

not the project). If available, audited

statements should be submitted. (Refer to

paragraphs 3-2 and 3-3 of HUD Handbook 4470.1).

60

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ATTACHMENT G (PAGE 2)

1\) If the sponsoring group/mortgagor has existed

less than three years, the financial

statements must be submitted from the date

the group was formed.

2\) Statements must identify restricted and

unrestricted assets along with the related

liabilities.

3\) Financial statements must be signed by an

officer of the sponsoring group.

4\) All statements must contain the certification

of truth and accuracy and criminal

certification identified in paragraph

3-2.B.1. of HUD Handbook 4470.1. This

certification must reference the name of the

sponsor and the date of the financial

statements.

G. Signed written resolution of its directors or

trustees, acknowledging the responsibilities and

obligations of sponsorship and continuing

ownership, and that this position reflects the

will of the membership.

H. Form HUD-92013 SUPP. listing current bank and

trade references for the sponsor; mortgagors, if

formed and their officers (President, Vice

President, Secretary and Treasurer). Refer to

paragraph 2-1.B.2.c. of HUD Handbook 4470.1.

I. If the sponsor, mortgagor or any officer of either

has a prior Federal default or claim, the

following must be submitted:

A letter from the affected agency, on agency

letterhead and signed by an officer, stating that

the delinquent Federal debt is current or

satisfactory arrangements for repayment have been

made.

J. Detailed statement of arrangements made or

proposed for the following (listing principals

involved, their relationship with the

61

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ATTACHMENT G (PAGE 3)

sponsor/mortgagor and/or the present ownership of

the property, the terms of the arrangements and

the circumstances surrounding each):

1\) Legal and consulting services.

2\) Project financing, including any discounts,

or arrangements with the seller to take back

financing.

3\) Project management.

4\) Resident training.

5\) Project repair program, including how the

repair work will be contracted out.

NOTE: A national, State or regional organization acting as a

cosponsor must submit a separate Form HUD-3433 and supplemental

documentation.

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ATTACHMENT H

CHECKLIST FOR SUBMISSION OF A TRANSFER PLAN OF ACTION

The Preservation process to transfer an eligible project involves the

submission of a Plan of Action (POA), Transfer of Physical Assets (TPAs)

and a Section 241 or other type of financing application. This checklist

identifies all POA submission requirements. Where there is overlap or

identical submission requirements for POAs, TPAs and Section 241 loan

applications, it combines the required exhibits which meet the
requirements

for all applications. In other words, the Department will not require
the

purchaser to submit duplicate exhibits for each application.

The numbers in the ( )s are paragraph references in Handbook 4350.6.

I. Areas of concern at the bona fide offer stage prior to POA
submission.

This review should help the Department avoid duplicate funding of an

activity at a later stage of the Preservation process such as

overlapping of a fee payment:

1\. Did a resident council or community based nonprofit organization

receive a Preservation Technical Assistance Grant (PTAG) under:

YES NO

\_\_\_ \_\_\_

A. PTAG Phase I for RCs & CBOs:

to organize? \_\_\_ \_\_\_

to receive training? \_\_\_ \_\_\_

to incorporate? \_\_\_ \_\_\_

to establish accounting \_\_\_ \_\_\_

procedures?

other? \_\_\_ \_\_\_

B. PTAG Phase II for successful applicant to:

submit an expression of interest &

prepare a bona fide offer? \_\_\_ \_\_\_

architectural & engineering \_\_\_ \_\_\_

services?

financial & legal services? \_\_\_ \_\_\_

training for board members? \_\_\_ \_\_\_

C. PTAG Phase III for an eligible applicant to:

prepare a plan of action? \_\_\_ \_\_\_

obtain architectural & engineering

services? \_\_\_ \_\_\_

obtain financial & legal

services? \_\_\_ \_\_\_

training for the board & members

of the purchasing entity? \_\_\_ \_\_\_

63

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YES NO

\_\_\_ \_\_\_

preparation of TPA? \_\_\_ \_\_\_

Other? (explain) \_\_\_ \_\_\_

2\. Did the purchaser submit a form HUD 3433, Request for Preliminary

Determination of Eligibility as a Nonprofit Sponsor and/or

Mortgagor and supplemental documentation at the time it submitted

a bona fide offer or PTAG Phase II?

(see Attachment G for required exhibits) \_\_\_ \_\_\_

If not, then the form HUD 3433 must be submitted with the POA.

II\. Did the owner and purchaser submit:

1\. A Plan of Action (POA) within six months:

A. Of accepting a HUD approved bona fide

offer under the voluntary sales process

(8-3.A.1. & 8-16.B)? or \_\_\_ \_\_\_

B. Of receipt of a HUD approved bona fide

offer under the mandatory sale

process? \_\_\_ \_\_\_

2\. Six copies of the POA (8-3.A.1) \_\_\_ \_\_\_

3\. A POA summary which is the same as posted to

the tenants? \_\_\_ \_\_\_

4\. A certification that all requirements

of HUD Handbook 4350.6, Paragraph 8-3.B

through D. have been met as follows:

A. A POA summary was sent to all

tenants? \_\_\_ \_\_\_

B. A copy of the POA and POA

summary was sent to the

tenant representative or a

certification stating that

the owner is unaware of a

tenant representative? \_\_\_ \_\_\_

C. A copy of the POA was sent to

the State or local government

official to whom the Initial

NOI was submitted? \_\_\_ \_\_\_

D. Tenants, tenant representatives, and

State and local governments have been

notified in accordance with

Paragraph 8-3.D.? \_\_\_ \_\_\_

5\. Evidence that the purchaser can pay for

all applicable out-of-pocket expenses

that will not be paid for through

a loan or grant? \_\_\_ \_\_\_

64

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YES NO

\_\_\_ \_\_\_

III\. Were the following included in the submitted

Plan of Action?

1\. A. Descriptions of outstanding audit

findings or findings of

noncompliance with the Fair Housing Act

and documented resolution of

findings or proposed resolutions

(8-5.D.)?

OR

B. A certification of no violations

(8-5.D.)? \_\_\_ \_\_\_

2\. A. Description of proposed changes in

status or terms of the mortgage or

regulatory agreement?

OR

B. A statement of no proposed changes

(8-5.B)? \_\_\_ \_\_\_

3\. A. Description of proposed changes in

low-income affordability restrictions and

a detailed assessment of the effect of

these changes on each tenant?

OR

B. A statement that no changes are proposed

(8-5.C.)? \_\_\_ \_\_\_

4\. A. A request for waivers?

OR

B. A statement that no waivers are

requested (8-5.E.)? \_\_\_ \_\_\_

5\. List of incentives (assistance) requested

and methods to fund listed incentives

(8-17.A.,B. & 8-21.A.,B.,D.)? \_\_\_ \_\_\_

6\. Projected budgets for three years

(8-17.C.)? \_\_\_ \_\_\_

7\. Management plan (8-17.D)? \_\_\_ \_\_\_

8\. Occupancy policy (8-17.D)? \_\_\_ \_\_\_

9\. Requested utility allowances with

documentation (8-17.D.)? \_\_\_ \_\_\_

10\. Other information and conditions or

criteria specified by the Loan Management

Branch as necessary for evaluating the

POA (8-17.J.)? \_\_\_ \_\_\_

65

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YES NO

\_\_\_ \_\_\_

11\. A. Description of assistance from State

or local Government Agencies, excluding

LIHTCs, and an analysis of any cost

reduction for HUD?

OR

B. A statement that no assistance will be

received (8-17.E.)? \_\_\_ \_\_\_

12\. A. If LIHTCs are part of the transaction,

has the information required by Notice

H90-17 been included (8-17.E.1.)?

OR

B. If LIHTCs are NOT received by the owner,

has form HUD-9611 been included

(8-17.E.1.)? \_\_\_ \_\_\_

13\. Two tenant income profiles (8-17.F.):

A. One as of the date of submission

of the POA? \_\_\_ \_\_\_

AND

B. i. One as of January 1, 1987?

OR

ii\. A tenant income profile for a

year other than 1987, along

with a certification that

the January 1, 1987, profile

is unavailable? \_\_\_ \_\_\_

14\. Documents related to an application for

preliminary approval of a Transfer

of Physical Assets package as follows:

NOTE: The TPA fee of \$.50 per \$1000 will be waived for a nonprofit

purchaser.

o TPA Application

(form HUD 92266)? \_\_\_ \_\_\_

o Executed Seller/Purchaser

Affidavit? \_\_\_ \_\_\_

o Executed but Unrecorded Modification

Agreement? \_\_\_ \_\_\_

o Pro-Forma Balance Sheet? \_\_\_ \_\_\_

o Proposed But Unrecorded Deed? \_\_\_ \_\_\_

o Proposed Bill of Sale and

Assignment? \_\_\_ \_\_\_

66

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YES NO

\_\_\_ \_\_\_

o Proposed Management Certification,

and Entity Profile, if applicable,

and form HUD-2530 for Management

Agent? \_\_\_ \_\_\_

o Executed Organizational Documents

of Purchaser/mortgagor entity? \_\_\_ \_\_\_

o Documentation that the purchaser

meets all requirements for a purchaser

including those of a single asset

entity and CBO, if applicable

(8-5 A.)? \_\_\_ \_\_\_

o Byrd Amendment Certification? \_\_\_ \_\_\_

o A complete description of the proposed

financing of the transaction including:

A. a complete 241 loan application

B. an application for the Gap Grant

C. if uninsured financing is planned,

a preliminary commitment from the

financing agency which includes at

the minimum the face amount of the

debt instrument and the terms for

repayment, i.e., annual debt service

D. evidence of any other grants received

or for which the purchaser has applied

E. certification that no Section 241

loan or other loan(s) is being

requested? \_\_\_ \_\_\_

15\. A complete Section 241 loan application if

insured financing is being requested includes:

Note: The purchaser will not have to duplicate documents that

have been included elsewhere in the POA submission, such as in a

TPA application (see item 15 above).

o Application fee of \$3.00 per thousand of

the requested mortgage amount for a firm

commitment. \_\_\_ \_\_\_

o Analysis of balance in all project

escrow accounts? \_\_\_ \_\_\_

o Work write-up describing the scope

of repairs and/or rehabilitation.

If different from PCNA performed

by HUD, identify items added and

deleted with justification and

supporting documentation (e.g.,

plans and specifications)? \_\_\_ \_\_\_

o Availability of Tax Abatement and

details. \_\_\_ \_\_\_

67

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YES NO

\_\_\_ \_\_\_

o For General contractors or for

purchasers the required exhibits

listed in paragraph 2-1.B.2. of

HUD Handbook 4470.1.? \_\_\_ \_\_\_

16\. If the purchaser is using uninsured

financing then the POA submission must

include the following documents which

would otherwise be submitted with

the Section 241(f) loan application:

o Analysis of balance in all project

escrow accounts? \_\_\_ \_\_\_

o Work write-up describing the scope

of repairs and/or rehabilitation.

If different from PCNA performed

by HUD, identify items added and

deleted with justification and

supporting documentation (e.g.,

plans and specifications)? \_\_\_ \_\_\_

o Availability of Tax Abatement

and details, \_\_\_ \_\_\_

17\. Tabs and a Table of Contents indicating

the tab where each essential item can

be found (8-5.G.)? \_\_\_ \_\_\_

68

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ATTACHMENT I

TITLE VI PROCESSING LOG:

Project Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project No. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

City \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

County \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Notice of Intent (101) to Extend or Sell (Circle one)

Day One:

\_\_\_\_\_\_\_\_\_ Asset Management (AM) receives NOI, checks for
completeness,

accepts for processing. Inputs Log date into Multifamily

Preservation Processing System (MPPS) which checks eligibility.

Log date

\_\_\_\_\_\_\_\_\_ Owner sends NOI to State or local govt, mortgagee,
each occupied

unit, tenant representative, if known. Owner certifies to LM,

this has been done. If AM later finds NOI not distributed, NOI

rejected.

\_\_\_\_\_\_\_\_\_ If project in default prior to 11/28/90, and now
current under

workout, owner submits letter with NOI, agreeing to recompense

insurance fund. AM contacts Office of MIAS for determination of

losses.

First Week:

\_\_\_\_\_\_\_\_\_ AM sends owner of previously defaulted project,
registered

letter, to recompense insurance fund, (HUD) within 30 days of

receipt. Log date

\_\_\_\_\_\_\_\_\_ AM sends 3 NOIs to Housing Programs, att: A&E & Val,
along with;

3 yrs of physical inspection reports, information on project

condition, financial reports, plans/specs, Updated pg 1 of form

92013, Section 8 contract expiration date. Log

date

By 15th day:

\_\_\_\_\_\_\_\_\_ If AE/C can\'t perform Preservation Capital Needs
Assessment

(PCNA), Regional Contracting Officer (RCO) awards contract.

\_\_\_\_\_\_\_\_\_ Contractor or A&E staff schedules physical inspection
(PI) of

CNA, tells AM the date. Log date

By 20th day:

\_\_\_\_\_\_\_\_\_ AM sends owner Appraisal Guidelines (AG) & Handbook
4350.6\'s

Appendix (App) 5-1, 5-1A & Attachment (Att) 5 of Notice H92-54.

Log date

69

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\_\_\_\_\_\_\_\_\_ Owner receives AG & App 5-1,5-1A & posts App 5-1A,
Notice to

Tenants, advising them of appraisal & PCNA.

\_\_\_\_\_\_\_\_\_ AM sends state & local govt App 5-1,5-1A. Log date

\_\_\_\_\_\_\_\_\_ AM notifies owner/St/local date of PCNA, if known.

\_\_\_\_\_\_\_\_\_ Val works with RCO to contract for appraisal.

By 30th day:

\_\_\_\_\_\_\_\_\_ Owner & Val contract for an appraisal.

By 33rd day:

\_\_\_\_\_\_\_\_\_ Owner posts notice advising tenants date of PCNA, PI
& exit

conference.

By 35th day:

\_\_\_\_\_\_\_\_\_ PI (required repairs/costs) site inspection occurs.
Owner\'s rep

& appraiser, HUD\'s appraiser, LM, Tenant rep & local officials

may attend inspection.

By 36th day:

\_\_\_\_\_\_\_\_\_ PI section of PCNA exit conference occurs. Tenants
may also

attend. Owner given preliminary findings.

By 45th day:

\_\_\_\_\_\_\_\_\_ A&E receives completed PI of PCNA (processing record)
from

contractor.

By 49th day:

\_\_\_\_\_\_\_\_\_ A&E\'s GTM (Government Technical Monitor) and Branch
Chief reviews

PI for acceptability.

By 50th or 52nd day:

\_\_\_\_\_\_\_\_\_ GTM accepts or rejects contractor\'s PI within 5
working days of

receipt.

\_\_\_\_\_\_\_\_\_ PI approved, A&E provides to LM & Val. Log date

\_\_\_\_\_\_\_\_\_ If PI not approved, deficiencies must be corrected in
order to

send to appraisers by 60th day.

70

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By 59th day:

\_\_\_\_\_\_\_\_\_ AM sends PI to owner, Val sends PI to HUD appraiser.

By 60th day:

\_\_\_\_\_\_\_\_\_ Owner\'s appraiser receives PI of PCNA. Log date

\_\_\_\_\_\_\_\_\_ HUD\'s appraiser receives PI of PCNA. Log date

By End of 4th Month: 120th day from NOI filing \*

\_\_\_\_\_\_\_\_\_ A&E receives completed PCNA. Log date

\_\_\_\_\_\_\_\_\_ Owner sent completed PCNA for review. Log date

\_\_\_\_\_\_\_\_\_ Val receives owner\'s appraisal. Log date

\_\_\_\_\_\_\_\_\_ Val receives HUD\'s appraisal. Log date

\_\_\_\_\_\_\_\_\_ Immediately after receipt of both appraisals, Val
sends HUD\'s

appraisal to owner. Log date

By 5th Month: End of 1st Week

\_\_\_\_\_\_\_\_\_ Val reviews both appraisals for accuracy, sufficiency
and

compliance with AG.

By 5th Month: End of 2nd Week

\_\_\_\_\_\_\_\_\_ Val notifies HUD/Owner\'s appraiser if revisions
required.

\_\_\_\_\_\_\_\_\_ Val notifies LM if revisions have been requested.

\_\_\_\_\_\_\_\_\_ Owner reviews HUD\'s appraisal & provides any
additional comments

regarding PCNA.

By 5th Month: End of 4th Week

\_\_\_\_\_\_\_\_\_ Val receives revisions, if owner & HUD appraiser also
agree to

revisions, appraisal is approved.

\_\_\_\_\_\_\_\_\_ Val & owner meet to reconcile differences.

By End of 5th Month: One month after exchanging appraisals \*

\_\_\_\_\_\_\_\_\_ Val confirms or modifies PCNA based on info from
owner &

determines two reconciled preservation values or owner requests

3rd appraisal. Log date

Note: An asterisk (\*) next to date indicates regulatory deadline.

71

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\_\_\_\_\_\_\_\_\_ If 3rd appraisal needed, val provides appraisal list
to LM who

sends to owner.

By End of 6th Month: 6 Months from submission of NOI \*

\_\_\_\_\_\_\_\_\_ Owner selects appraiser for 3rd appraisal.

Log date

\_\_\_\_\_\_\_\_\_ AM provides appraiser with AG & CNA.

By End of 8th Month: 2 Months from date appraiser accepted

assignment for 3rd appraisal \*

\_\_\_\_\_\_\_\_\_ Appraiser submits 3rd Appraisal to Val. Log date

\_\_\_\_\_\_\_\_\_ AM sends appraisal to owner for review. Log date

\_\_\_\_\_\_\_\_\_ Owner submits copy of acceptable appraisal and

invoice of full amount to RCO who pays half.

By 9th Month: last Week

\_\_\_\_\_\_\_\_\_ Val\'s completed HUD-9607 sent to AM. Log date

\_\_\_\_\_\_\_\_\_ Val & AM jointly complete letter to

owner transmitting information.

By End of 9th Month: Nine months from receipt of NOI \*

\_\_\_\_\_\_\_\_\_ AM sends letter, 9607, App 5-3, 5-3A, 5-3B,

5-3C (Notice to Tenants) to owner. Log date

\_\_\_\_\_\_\_\_\_ Owner posts information at all affected buildings.

72

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TITLE VI PROCESSING LOG:

Project Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project No. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

City \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

County \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Notice of Intent to Terminate:

Day 1:

\_\_\_\_\_\_\_\_\_ Asset Management (AM) receives NOI, checks for
completeness,

accepts for processing. Inputs Log date into Multifamily

Preservation Processing System (MPPS) which checks eligibility.

Log date

By 5th day:

\_\_\_\_\_\_\_\_\_ AM sends NOI to EMAS/FHEO/HsgProg, att: Val, request
they supply

info relevant to market area. Log date

By 90th day: Within 90 days of receipt of initial NOI

\_\_\_\_\_\_\_\_\_ AM receives relevant market data from EMAS/FHEO/Val.

By end of 6th Month: Within 6 months of receipt of NOI \*

\_\_\_\_\_\_\_\_\_ AM sends owner, criteria, data & App 4, 4-A, 4-B, 4-C
& info on

preparing Plan of Action (POA). Log date

\_\_\_\_\_\_\_\_\_ AM sends data & App 4-A, B to tenant representative
(TR), & state

and local government. Log date

\_\_\_\_\_\_\_\_\_ Owner posts the info & App 4-A, 4-B for tenants.

By End of 12th Month: Within 6 months of receiving HUD info. \*

\_\_\_\_\_\_\_\_\_ AM receives & reviews for completeness owner\'s POA.

\_\_\_\_\_\_\_\_\_ Within 10 working days of POA receipt, LM sends owner
letter

indicating if POA is complete or incomplete. If incomplete, POA

returned with list deficiencies to correct so POA complete.

Log date

\*\_\_\_\_\_\_\_\* AM determines that owner has submitted complete POA
(CPOA) to

Terminate, 6 copies POA Date Stamped from date of receipt,

processing clocks begins. Log date

Note: An asterisk (\*) next to date indicates regulatory deadline.

Note: An asterisk (\*) on either side of a check line, indicates an

important date that triggers other action.

73

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\_\_\_\_\_\_\_\_\_ Owner also submits to State or local government &
tenant rep.

and posts summary.

\_\_\_\_\_\_\_\_\_ If POA not received, NOI expires & process ends &
owner must

wait 6 months from POA filing deadline, before filing a new NOI

to Extend or Sell.

\_\_\_\_\_\_\_\_\_ Owner provides AM info on tenants for displacement
within 30

days of identifying such tenants but not less than 30 days prior

to date they must vacate.

By 13th Month: 2nd week, within 10 working days of complete POA

receipt

\_\_\_\_\_\_\_\_\_ AM sends POA to State or local government, EMAs,
FHEO, Val, &

Field Counsel, requesting comments within 30 days for HUD

Sections & 50 days for tenants and State or local government.

Log date

By 14th Month: 2nd Week, Within 30 days from receipt of POA

\_\_\_\_\_\_\_\_\_ AM receives comments from all Field Office sections.

Log date

By 14th Month: 3rd Week, Within 50 days of complete POA \*

\_\_\_\_\_\_\_\_\_ AM receives comments from St/local govt. Log date

\_\_\_\_\_\_\_\_\_ AM receives comments from tenants.

By End of 14th Month: Within 60 days of complete POA \*

\_\_\_\_\_\_\_\_\_ AM sends letter to owner indicating all deficiencies
that

prevent POA approval. Log date

By End of 15th Month: In 30 days from deficiency letter receipt

\_\_\_\_\_\_\_\_\_ AM receives revised POA from owner.

\_\_\_\_\_\_\_\_\_ Or, Owner may submit written request for extension,
not for more

than 305 from CPOA receipt in order for LM to have 60 days to

review POA.

By 18th Month: 4th Week, or 10 days prior to approval of

prepayment or 30 days prior to acceptance.

\_\_\_\_\_\_\_\_\_ AM must notify each tenant of protections.

\_\_\_\_\_\_\_\_\_ Owner must post Notice of Available Protection in
each

building.

By End of 18th Month: 180 days from complete POA \*

\_\_\_\_\_\_\_\_\_ AM has received revised POA & sends letter to owner,
indicating

preliminary approval or disapproval of POA to Terminate.

Log date

74

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\_\_\_\_\_\_\_\_\_ If disapproved, AM sends owner letter indicating new
NOI (to

extend), may be submitted in 6 months.

By End of 22nd Month: 305th day from CPOA

\_\_\_\_\_\_\_\_\_ AM receives a complete POA from owner who had
requested &

received extension. It must be submitted in 305 days from CPOA

submission, so AM has 60 days to review.

By End of 24th Month: 60 days from receipt of CPOA \*

\_\_\_\_\_\_\_\_\_ AM sends letter to owner, indicating POA\'s
approval/disapproval

for termination. Log date

75

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TITLE VI PROCESSING LOG: CONTINUATION

Project Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project No. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

City \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

County \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Notice of Intent to Extend & Receive Incentives

From Beginning of 10th Month

to End of 15th Month:

\_\_\_\_\_\_\_\_\_ Owner prepares a Plan of Action to Extend with
incentives.

Owner should keep in mind that a complete POA must be submitted

within 6 months of receiving information from HUD.

By End of 15th Month: Within 6 months of receiving HUD info. \*

\_\_\_\_\_\_\_\_\_ AM receives & reviews for completeness owner\'s POA.

\_\_\_\_\_\_\_\_\_ Owner must also submit to LM and Housing Programs
(HP) any

Sections 241(f) or 241 (a) loan that is to be closed

simultaneously with POA. HP notifies AM if loan applications

are complete or incomplete.

\_\_\_\_\_\_\_\_\_ Within 10 working days of POA receipt, LM sends owner
letter

indicating if POA is complete or incomplete. If incomplete, POA

returned with list deficiencies to correct so POA complete.

Log date

\*\_\_\_\_\_\_\_\* AM determines that owner has submitted complete POA
(CPOA) to

Extend, 6 copies POA Date Stamped from date of receipt,

processing clock begins. Log date

\_\_\_\_\_\_\_\_\_ Owner also submits to State or local government &
tenant

representative & posts summary.

\_\_\_\_\_\_\_\_\_ Owner gives copy POA to Tenant Rep and makes copies
available to

tenants for comment.

\_\_\_\_\_\_\_\_\_ If complete POA not received, NOI expires & process
ends & owner

must wait 6 months from POA filing deadline before filing a new

Initial NOI.

By 16th Month: 2nd week, In 10 working days after CPOA receipt.

\_\_\_\_\_\_\_\_\_ AM sends POA to State or local government, EMAS,
FHEO, Field

Counsel, Environmental Officer & Hsg. Br: att Val, requesting

comments within 30 days from HUD sections & 50 days from State or

local government. Log date

76

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Note: An asterisk (\*) on either side of a check line, indicates an

important date that triggers other action.

By 17th Month: 2nd week, Within 30 days from receipt of POA

\_\_\_\_\_\_\_\_\_ AM receives comments from all Field Office sections.

Log date

\_\_\_\_\_\_\_\_\_ AM receives comments from tenants.

\_\_\_\_\_\_\_\_\_ Housing Programs notifies AM that a complete loan
application

Form HUD-2013 and Form HUD-2530 has been submitted.

By 17th Month: 3rd week, Within 50 days of CPOA \*

\_\_\_\_\_\_\_\_\_ AM receives comments from St/local govt. Log date

By End of 17th Month: Within 60 days of CPOA \*

\_\_\_\_\_\_\_\_\_ AM sends registered letter to owner indicating all
deficiencies

that prevent POA approval. Log date

By End of 18th Month: Within 90 days of POA receipt.

\_\_\_\_\_\_\_\_\_ Housing Development sends form HUD-92264-A to LM.

\_\_\_\_\_\_\_\_\_ AM Branch confirms acceptability of: repairs, costs,
Sections

241(f) or 241 (a) loans, Preservation Rent & initial deposit for

Reserve for Replacement Account.

By End of 18th Month: In 30 days from deficiency letter receipt

\_\_\_\_\_\_\_\_\_ AM receives revised POA from owner.

\_\_\_\_\_\_\_\_\_ Or, Owner may submit written request for extension,
but not for

more than 305 from PDS in order for AM to have 60 days to review

POA.

After the 18th Month:

\_\_\_\_\_\_\_\_\_ AM, after completion of Form HUD-50061, notifies
Valuation

Branch if the loans must be modified to bring the Preservation

Project Rent down to the Federal Cost Limit. ???????????

By End of 21st Month: Within 180 days of CPOA receipt \*

\*\_\_\_\_\_\_\_\* AM has reviewed revised POA & sends letter to owner
indicating

preliminary approval or disapproval of Extension POA with

incentives. Log date

\_\_\_\_\_\_\_\_\_ If disapproved, LM sends owner letter indicating new
NOI (to

extend), may be submitted in 6 months.

77

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\_\_\_\_\_\_\_\_\_ If HUD fails to approve/disapprove POA within 180
days other

than owner error or non-compliance, must provide retroactive

incentives & assistance to an entitled owner.

By End of 24 Month: Within 90 days of POA approval

\*\_\_\_\_\_\_\_\* The following actions constitute POA final approval:

The closing of all loans, completion of Use Agreement, Amended

Regulatory Agreement & signing of Section 8 contract must all be

completed.

\_\_\_\_\_\_\_\_\_ At time of POA final approval, appraisal value as
issued on the

original Form HUD-9607 can\'t be more than 30 months old.

By 25th Month: 5th day, Within 5 days of final approval

\_\_\_\_\_\_\_\_\_ With POA implementation, AM staff notifies
Preservation

Division, Headquarters.

By End of 25 Month: 305th day from CPOA

\_\_\_\_\_\_\_\_\_ AM receives a complete POA from owner who had
requested &

received extension. It must be submitted in 305 days from CPOA

submission so AM has 60 days to review.

By End of 27th Month: 365th day from CPOA \*

\_\_\_\_\_\_\_\_\_ AM sends letter to owner w/ approval/disapproval of
POA with a

submission extension. Log date

By End of 39th Month: Within 15 months of POA final approval \*

\_\_\_\_\_\_\_\_\_ If funds requested for POA\'s incentives not
provided, owner may

prepay mortgage and terminate affordability restrictions.

\_\_\_\_\_\_\_\_\_ Owner provides AM info on tenants for displacement
within 30

days of identifying such tenants but not less than 30 days prior

to date they must vacate.

By 40th Month: 10th day, 10 days from prepayment determination

\_\_\_\_\_\_\_\_\_ If project may prepay, & at least 30 days prior to
its

acceptance, AM must notify each tenant of available protections &

owner must post Notice of Available Protection in each building.

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TITLE VI PROCESSING LOG: CONTINUATION

Project Name \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project No. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

City \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

County \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Notice of Intent to Sell Project:

Within 5 days of receipt of 2nd NOI:

\_\_\_\_\_\_\_\_\_ AM reviews 2nd NOI for accuracy & compliance.

\_\_\_\_\_\_\_\_\_ If NOI not complete or accurate, AM returns it to
owner,

indicating it must be returned within 30 day deadline (end 10th

month) & distributed. Log date

By End of 10th Month: Within 30 days of receipt of information \*

\_\_\_\_\_\_\_\_\_ AM receives complete/accurate 2nd NOI from owner.

Log date

\_\_\_\_\_\_\_\_\_ Owner must also send to St/local govt & Tenant
Representative &

mortgagee.

\_\_\_\_\_\_\_\_\_ If 2nd NOI not filed, process ends.

\_\_\_\_\_\_\_\_\_ or, if owner changes mind, may submit POA for
incentives by the

end of the 15th month.

\_\_\_\_\_\_\_\_\_ If NOI acceptable AM notifies potential purchasers,
that

property is available for sale & provide with necessary

information to make an offer. Log date)

\_\_\_\_\_\_\_\_\_ AM provides Preservation Division with same info &
names of and

minority newspapers in area.

\_\_\_\_\_\_\_\_\_ AM provides Resident Initiative Specialist (RIS)
w/info sent to

buyers and Preservation Division.

Within 5 days of receipt of info from AM:

\_\_\_\_\_\_\_\_\_ Preservation Division will place notices in major
newspapers in

area and major minority newspapers. Ads shall be placed within

25 days, 6 months & 12 months after receipt of 2nd NOI.

\_\_\_\_\_\_\_\_\_ RIS mails notice, App 7-2 to resident council (RC) &
community

based non-profit organizations (CBO).

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From End of 10th Month

To End of 16th Month: \*

\_\_\_\_\_\_\_\_\_ Resident Council or Community-based nonprofit
organization may

Make a bona-fide offer (BFO) to the owner & submits a copy to AM.

From End of 16th Month

To End of 22nd Month: \*

\_\_\_\_\_\_\_\_\_ Local housing agencies & all other priority
purchasers may make

BFO if no BFO received or accepted from BFO or CBO.

\_\_\_\_\_\_\_\_\_ Any priority purchaser, intending to make offer to
purchase

submits Expression of Interest (EOI) to AM.

\_\_\_\_\_\_\_\_\_ Within 30 days of receipt of EOI, AM determines if
EOI is

acceptable & notifies owner of potential purchaser\'s EOI.

\_\_\_\_\_\_\_\_\_ Once notified of EOI, owner must provide potential
purchaser

with information needed to purchase.

\_\_\_\_\_\_\_\_\_ AM provides purchaser with necessary information,
including

App7-1 & info provided to owner. Log date

From End of 22nd Month

To End of 25th Month: \*

\_\_\_\_\_\_\_\_\_ Qualified purchasers may make a bona-fide offer.

\*\_\_\_\_\_\_\_\* Owner receives bona-fide offer from purchaser.

\_\_\_\_\_\_\_\_\_ If no bona fide offer received, owner may prepay
mortgage &

eliminate affordability restrictions.

By End of 26th Month: Within 30 days of owner\'s receipt of BFO \*

\_\_\_\_\_\_\_\_\_ Owner must reject or accept an offer conditioned upon
HUD\'s

certification it is bona-fide.

\*\_\_\_\_\_\_\_\* Owner notifies AM it has accepted BFO. Log date

\_\_\_\_\_\_\_\_\_ AM reviews offer, once it is accepted by owner.

\_\_\_\_\_\_\_\_\_ AM must determine level Earnest Money Deposit (EMD),
using

worksheet App 7-1, if it has not been waived.

Note: An asterisk (\*) on either side of a checkline, indicates

an important date that triggers other action.

\_\_\_\_\_\_\_\_\_ If offer not bona-fide or accepted, EMD must be

returned by owner.

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\_\_\_\_\_\_\_\_\_ If offer is rejected & later accepted, AM notifies
purchaser

they have 60 days to resubmit EMD.

By End of 27th Month: Within 30 days owner\'s acceptance of BFO \*

\_\_\_\_\_\_\_\_\_ AM reviews offer to determine if it is bona-fide.

\_\_\_\_\_\_\_\_\_ AM notifies owner in writing if it is BFO. Log date

By 28th Month: 10th day, Within 10 days of AM\'s determination

that offer is acceptable.

\_\_\_\_\_\_\_\_\_ Owner sends purchaser letter indicating final
acceptance of

offer (Contract for Sale), contingent upon completion POA

requirements. Log date

\_\_\_\_\_\_\_\_\_ Owner sends AM copy of this letter.

\_\_\_\_\_\_\_\_\_ If Contract for Sale is terminated owner must notify
AM.

Starting 28th Month: 2nd Week

\_\_\_\_\_\_\_\_\_ Owner and priority purchaser prepare a Plan of Action
to

Transfer property. Owner/purchaser should keep in mind that in

no case may 30 month limit on use of appraisal from the date of

the original Form HUD-9607 be waived & complete POA must be

submitted within the appropriate 6-months period.

By End of 31st Month: Within 6 months of date offer is made.

\_\_\_\_\_\_\_\_\_ If sale is mandatory, Owner/purchaser submit POA.

Time-line follows voluntary sale POA example

By End of 32nd Month: Within 6 months of owner\'s acceptance BFO \*

\_\_\_\_\_\_\_\_\_ Under voluntary sale, AM receives & review for
completeness

owner\'s POA.

\_\_\_\_\_\_\_\_\_ A complete POA includes all loans & grant
applications and

documentation for TPA (see exhibit H). Owner submits loan

applications to both AM and HP. HP reviews loan applications and

notifies AM if they are complete or incomplete.

\_\_\_\_\_\_\_\_\_ Within 10 working days of POA receipt, AM sends owner
letter

indicating if POA complete or incomplete. If incomplete, POA

returned with list deficiencies to correct so POA complete.

Log date

\*\_\_\_\_\_\_\_\* Under voluntary sale, AM determines that
owner/purchaser have

submitted complete POA (CPOA) to Sell, 6 copies POA Date Stamped

from date of receipt, processing clock begins. Log date

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\_\_\_\_\_\_\_\_\_ Owner/purchaser also submits to State or local govt &
tenant

rep. and posts summary.

\_\_\_\_\_\_\_\_\_ Owner gives copy POA to Tenant Rep and makes copies
available to

tenants for comment.

\_\_\_\_\_\_\_\_\_ If complete POA not received, NOI expires & process
ends & owner

must wait 6 months from PCA filing deadline, before filing a new

Initial NOI.

By 33rd Month: 2nd week, Within 10 working days of CPOA receipt

\_\_\_\_\_\_\_\_\_ AM sends POA to State or local government, EMAs,
FHEO, Val,

Field Counsel, Environmental Officer & Hsg Br: att Val,

requesting comments within 30 days from HUD sections & 50 days

for State or local government. Log date

By 34th Month: 2nd week, Within 30 days from receipt of POA

\_\_\_\_\_\_\_\_\_ AM receives POA comments from Field Office sections.
Log

date

\_\_\_\_\_\_\_\_\_ AM receives POA comments from Tenants.

\_\_\_\_\_\_\_\_\_ Housing Programs notifies AM that a complete loan
application

Form HUD-2013 and Form HUD-2530 has been submitted.

By 34th Month: 3rd week, Within 50 days of CPOA receipt \*

\_\_\_\_\_\_\_\_\_ AM receives comments from St/local govt. Log date

By End of 34th Month: Within 60 days of PDS \*

\_\_\_\_\_\_\_\_\_ AM sends registered letter to owner indicating all
deficiencies

that prevent POA approval. Log date

By End of 18th Month: Within 90 days of POA receipt

\_\_\_\_\_\_\_\_\_ Housing Development sends Form HUD-92264-A to AM.

\_\_\_\_\_\_\_\_\_ AM Branch confirms acceptability of: repairs & costs,
Sections

241(f) or 241 (a) loans, Preservation Project Rent and initial

deposit for Reserve for Replacement account.

By 36th Month: 1st week, 30 days from deficiency letter receipt

\_\_\_\_\_\_\_\_\_ AM receives revised POA from owner.

\_\_\_\_\_\_\_\_\_ Or, Owner may submit written request for extension,
but not for

more than 305 from PDS in order for AM to have 60 days to review

POA.

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After 36th Month:

\_\_\_\_\_\_\_\_\_ AM, after completion of Form HUD-50061, notifies
Valuation

Branch if the loans must be modified to bring the Preservation

Project Rent within the Federal Cost Limit.

By End of 38th Month: Within 180 days of CPOA receipt \*

\*\_\_\_\_\_\_\_\* AM has reviewed revised POA & sends letter to owner
indicating

preliminary approval or disapproval of POA to Sell.

Log date

\_\_\_\_\_\_\_\_ If disapproved, letter from AM indicates new NOI (to
extend),

may be submitted in 6 months.

\_\_\_\_\_\_\_\_ If HUD fails to approve/disapprove POA within 180 days
other

than owner error or non-compliance, must provide retroactive

incentives & assistance to an entitled owner.

\_\_\_\_\_\_\_\_ If owner changes mind & decides to retain project, must
submit

POA for incentives. Log date

By End of 41st Month: Within 90 days from POA approval

\*\_\_\_\_\_\_\_\* The following actions constitute POA final approval:

The closing of contract; including the Transfer of Physical

Assets, closing of all loans, completion of Use Agreement &

Amended Regulatory Agreement & signing of Section 8 contract

must all be completed.

\_\_\_\_\_\_\_\_\_ At time of POA final approval, appraisal can\'t be
more than 30

months from the date of the original HUD Form 9607.

\_\_\_\_\_\_\_\_\_ If contract to purchase falls through w/in 15 month
sale period,

or does not close within 90 days after POA approval, owner may

offer it for sale to qualified purchaser for remainder of 15

month period or 60 days, whichever is longer. If sales

transaction ended after 15 month offering period, owner makes

property available for sale for a 60-day period.

By 42nd Month: 5th day, Within 5 days of final approval

\_\_\_\_\_\_\_\_\_ With POA implementation, AM staff notifies
Preservation

Division, Headquarters.

By End of 42nd Month: Within 305th day of CPOA receipt

\_\_\_\_\_\_\_\_\_ AM receives a complete POA from owner who had
requested &

received extension. It must be submitted no later than 305 days

from CPOA submission so AM has 60 days to review.

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By End of 44th Month: Within 365 days of CPOA receipt \*

\_\_\_\_\_\_\_\_\_ AM sends letter to owner with approval/disapproval of
POA w/

submission extension. Log date

By End of 50th Month: 9 months from POA final approval \*

\_\_\_\_\_\_\_\_\_ Owner may prepay mortgage of funds requested in POA
not provided

within earlier of; 2 months after 1st fiscal year of date of

final approval, or 6 months from POA final approval date of

project that would have been eligible to prepay & 9 months, if

not yet eligible to prepay.

\_\_\_\_\_\_\_\_\_ Owner provides AM info on tenants for displacement
within 30

days of identifying such tenants but not less than 30 days prior

to date they must vacate.

By 51st Month: 10th day,

\_\_\_\_\_\_\_\_\_ Within 10 days of determining project may prepay or
30 days

prior to prepayment, AM must notify each tenant of the

prepayment.

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ATTACHMENT J

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Calculation of Information

to be Returned to Owner

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

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form HUD-9607 (5/94)

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Calculation of Information

to be Returned to Owner (Continued)

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\* \*

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\* GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED \*

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\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

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ATTACHMENT K

NOTE: This is for guidance only. It must be adapted for the specific

circumstances of the POA being submitted.

SUMMARY OF PLAN OF ACTION TO RETAIN A PROJECT

TO: Tenants of \_\_(Name of Project)\_\_\_

\_\_(Name of owners)\_\_\_ the owners of \_\_\_(name of project)\_\_\_
have submitted

a Plan of Action (POA) to HUD requesting incentives to keep this project

affordable for you. A summary of this POA is below.

A copy of the complete POA is available for inspection and copying at
the

locations and times shown at the end of the summary. All documentation
to

support the POA, except proprietary (private) information is available
from

the owner and HUD at the addresses shown at the end of the Notice. You

have 60 days to review this summary, the POA and supporting material and

to send your comments to the HUD Office.

OWNER\'S ADDRESS AND PHONE NUMBER

NAME, ADDRESS, AND PHONE NUMBER FOR MANAGEMENT AGENT

The following incentives are requested:

1\. A loan of \$\_\_\_\_\_\_\_\_\_\_ at \_\_\_ percent interest which
will be

repaid over a period (amortized) of \_\_\_\_\_ years.

The total loan is composed of \$\_\_\_\_ for the owner\'s equity and
\$\_\_\_\_\_\_

\_\_ for rehabilitation of the project. The payments (debt service) on

this loan will be \$\_\_\_\_\_\_\_\_\_\_. \$\_\_\_\_\_\_\_\_\_ for the
equity portion and

\$\_\_\_\_\_\_ for the rehabilitation portion of the loan.

The list of rehabilitation items are attached. The owner is

contributing \$\_\_\_\_\_\_ over and above the loan towards this

rehabilitation. Of the amount set aside for rehabilitation,
\$\_\_\_\_\_\_

will be used to deposit into an account set aside for doing future

repairs (a reserve for replacement account). At loan closing, an

additional \$\_\_\_\_\_\_\_\_ will be put into a special account for a
period

of at least five years or until the project meets HUD\'s Housing

Quality Standards.

2\. An Annual Authorized Return of up to \$\_\_\_\_\_\_\_\_\_. This is
the

return on investment which the owner can take each year, in

addition to the debt service on the loan, if all expenses are

paid and there is money remaining in project funds.

The following requirements will affect tenants:

1\) All very low- and low-income tenants at the project who do

not have Section 8 vouchers or certificates will receive a

Section 8 rental subsidy which will be given to the project.

We are requesting Section 8 for \_\_\_\_\_\_ tenants. Any family

whose current income is below the following limits would

qualify at this time:

INSERT CURRENT LOW-INCOME LIMITS

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Section 8 Contract Rents are the amounts HUD guarantees after the

tenants have paid their share. We are requesting the following

Section 8 rents and utility allowances for the project:

TYPE GROSS RENT UTILITY ALLOWANCE CONTRACT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The rent plus utility allowance for tenants with Section 8 subsidy

will be set as are all Section 8 rents. For tenants not receiving the

subsidy, rent plus utility allowance will be set at the lowest of 30

percent of the family\'s adjusted monthly income (AMI) or HUD\'s fair

market rent (FMR) for the area. (If applicable: We feel that if

project specific rents (PSR) were calculated for this project, they

would be lower than FMR. We are therefore requesting that PSRs be

used instead of FMR. We will request use of PSRs in any year in

which they are lower than FMR in order to keep your rent lower.)

A Minimum Rent will also be set each year for tenants whose income

goes down when there is no Section 8 subsidy available. Initial

FMRs or PSRs we are requesting for this project are:

TYPE FMR or PSR UTILITY ALLOWANCE TENANT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

However, no current moderate-income tenant\'s rent will be reduced
because

of POA approval.

With these rents, the project should receive gross rents (Gross Rent

Potential) of \$\_\_\_\_\_\_\_\_\_. (For Section 236 projects: If more
than \$\_\_\_\_\_\_

is collected in rents each month, the excess will be returned to the

Government.) With the utility allowances for all apartments, the total

will be (Preservation Project Rents) \$\_\_\_\_\_\_\_\_\_\_.

Tenants will be selected to fill vacancies in order to meet the
following

income profile:

\_\_\_ Very Low-Income

\_\_\_ Low-Income

\_\_\_ Moderate Income

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The rent for any tenant whose rent will be increasing more than 10% must
be

phased in. We are requesting that the phase in take place at the
following

rate:

INSERT PROPOSED RATE OF PHASE-IN, INCLUDING PASS THROUGH OF OPERATING

EXPENSE INCREASES

Since rents will vary based on your income, all increases in rent plus

utility allowances will be based upon an increase in the percentage of

income you are paying, rather than an increase in the total dollar
amount

paid. Therefore, you and your neighbor may be paying different rents in

any one year.

In exchange for the incentives we agree to keep the housing affordable
and

follow these and other HUD rules for 50 years or for the remaining
useful

life of the project, whichever is longer.

NAMES, ADDRESS AND TIMES AVAILABLE FOR INSPECTION FOR:

TENANT REPRESENTATIVES

HUD OFFICE

ON-SITE OFFICE

ATTACHMENT: List of Rehabilitation Items

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10TH: This is for guidance only. It must be adapted for the specific

circumstances of the POA being submitted.

SUMMARY OF PLAN OF ACTION TO PURCHASE A PROJECT

To: Tenants of (Name of Project)

\_\_(Name of owners)\_\_, the owners of \_\_(name of project)\_\_ AND
\_\_(Name of

Purchaser)\_\_\_\_, who will be purchasing the project, have submitted a
Plan

of Action (POA) to HUD requesting incentives to keep this project

affordable for you. A summary of this POA is below.

A copy of the complete POA is available for inspection and copying at
the

locations and times shown at the end of the summary. All documentation
to

support the POA, except proprietary (private) information is available
from

the owner and HUD at the addresses shown at the end of the Notice. You

have 60 days to review this summary, the POA and supporting material and

to send your comments to the HUD Office.

PURCHASER\'S ADDRESS AND PHONE NUMBER

NAME, ADDRESS, AND PHONE NUMBER FOR MANAGEMENT AGENT

The following incentives are requested:

1\. \$\_\_\_\_\_ in HUD-Insured (or non-insured) loans and grants for
the

project:

A loan of \$\_\_\_\_\_\_\_\_\_\_\_ at \_\_\_ percent interest to be paid
back

(amortized) for a period of 40 years. The payments (debt

service) on this loan will be \$\_\_\_\_\_\_\_\_\_ paid monthly.

\$\_\_\_\_\_\_\_\_ in a grant from HUD.

The total funds are arrived at as follows:

\$\_\_\_\_\_\_\_\_\_ to buy the project from the present owners

\$\_\_\_\_\_\_\_ for expected rehabilitation costs. \$\_\_\_\_\_\_\_\_\_
of this

amount must be placed in a special reserve for replacement

account to be used for future repairs on the project. A list of

repairs, we are expecting to make are attached to this summary.

\$\_\_\_\_\_\_\_\_\_\_ for transaction costs (other costs involved in
buying

the project. The major costs in this category include:

Consultant Fees

Legal Fees

Organizational Costs of the Purchaser

Training Costs for the Purchaser\'s Board Members

Operating Deficit for the repair period and the phase-in

period.

(List any others being requested).

The purchaser is contributing \$\_\_\_\_\_\_\_\_\_ towards the cost of

purchase and repairs.

2\. An annual owner\'s distribution of up to
\$\_\_\_\_\_\_\_\_\_\_\_\_\_. The

purchaser/new owner can only take this distribution in any year

in which there are funds left over after all project expenses

have been met.

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3\. \$\_\_\_\_\_\_\_\_\_ for oversight costs to be added to the budget.
These

costs will be phased out as the Board of Directors gain

management experience and the help is no longer required.

The following requirements will affect tenants:

1\. All very low- and low-income tenants at the project who do not

have Section 8 vouchers or certificates will receive a Section 8

rental subsidy which will be given to the project. We are requesting

Section 8 for \_\_\_\_\_ tenants. Any family whose current income is
below

the following limits would qualify at this time:

INSERT CURRENT LOW-INCOME LIMITS

Section 8 Contract Rents are the amounts HUD guarantees after the

tenants have paid their share. We are requesting the following

Section 8 rents and utility allowances for the project:

TYPE GROSS RENT UTILITY ALLOWANCE CONTRACT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The rent plus utility allowance for tenants with Section 8 subsidy

will be set as are all Section 8 rents. For tenants not receiving the

subsidy, rent plus utility allowance will be set at the lowest of 30

percent of the family\'s adjusted monthly income (AMI) or HUD\'s fair

market rent (FMR) for the area. (If applicable: We feel that if

project specific rents (PSR) were calculated for this project, they

would be lower than FMR. We are therefore requesting that PSRs be

used instead of FMR. We will request use of PSRs in any year in which

they are lower than FMR in order to keep your rent lower.) A Minimum

Rent will also be set each year for tenants whose income goes down

when there is no Section 8 subsidy available. Initial FMRs or PSRs

we are requesting for this project are:

TYPE FMR or PSR UTILITY ALLOWANCE TENANT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

However, no current moderate-income tenant\'s rent will be reduced
because

of POA approval.

With these rents, the project should receive gross rents (Gross Rent

Potential) of \$\_\_\_\_\_\_\_\_\_. (For Section 236 projects: If more
than \$\_\_\_\_\_

is collected in rents each month, the excess will be returned to the

Government.) With the utility allowances for all apartments, the total

will be (Preservation Project Rents) \$\_\_\_\_\_\_\_\_\_\_.

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Tenants will be selected to fill vacancies in order to meet the
following

income profile:

\- Very Low-Income

\- Low-Income

\- Moderate Income

The rent for any tenant whose rent will be increasing more than 10% must
be

phased in. We are requesting that the phase in take place at the
following

rate:

INSERT PROPOSED RATE OF PHASE-IN, INCLUDING PASS THROUGH OF OPERATING

EXPENSE INCREASES

Since rents will vary based on your income, all increases in rent plus

utility allowances will be based upon an increase in the percentage of

income you are paying, rather than an increase in the total dollar
amount

paid. Therefore, you and your neighbor may be paying different rents in

any one year.

In exchange for the incentives we agree to keep the housing affordable
and

follow these and other HUD rules for 50 years or for the remaining
useful

life of the project, whichever is longer.

NAMES, ADDRESS AND TIMES AVAILABLE FOR INSPECTION FOR:

TENANT REPRESENTATIVES

HUD OFFICE

ON-SITE OFFICE

ATTACHMENT: List of Rehabilitation Items

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ATTACHMENT L

REVISED PTAG APPLICATION EXHIBITS 3, 6 & 7

EXHIBIT 3 - DETAIL OF PROPOSED ACTIVITIES AND COSTS

ACCEPTABLE ACTIVITIES:

1\. Establishing and organizing Resident Councils or CBO\'s,

including legal services to incorporate and establish non-profit

status.

2\. Establishing accounting procedures and related activities.

3\. Architectural and engineering services.

4\. Submission of expression of interest and preparation of

bona fide offer.

5\. Securing financing and preparation of mortgage documents,

Transfer of Physical Assets documents, and other documentation

incident to closing a purchase offer.

6\. Training for community residents in skills related to operations

and management of the project, including leadership training.

7\. Training for board members and affiliated persons.

8\. Developing potential management functions or tasks to be

undertaken by the applicant organization.

9\. Developing and negotiating management contracts and related

management procedures.

10\. Preparing market studies.

11\. Other activities related to this NOFA which are approved by

the Field Office and are reasonable both in costs, timeliness,

and applicability to achieve the purposes of this NOFA.

For EACH of the above activities the organization proposes to

accomplish, provide a separate sheet for EACH grant phase with the

information listed in Sections A and B below. Incomplete submissions or

applications that deviate from this format will not be accepted.

Provide the information requested in the following two sections.

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SECTION A. - Exhibit 3A

1\. ACTIVITY TO BE ACCOMPLISHED IN GRANT PHASE \_\_\_\_\_\_\_\_\_ (I, II
OR III)

2\. ACTIVITY NUMBER (Per above list of acceptable activities)
\_\_\_\_\_\_\_

ACTIVITY NAME
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3\. NARRATIVE DESCRIPTION OF ACTIVITY: Include description of benefit

expected from the activity and the reasons why this activity is NOT a

duplication of an activity proposed for the same individual under a

different grant. Also describe why this activity is NOT a duplication of

an activity already funded by HUD under a different part of the

Preservation Process (example: why additional inspections services are

needed if a comprehensive PCNA has already been completed and paid for
by

HUD.) Include anticipated duration of the activity.

Specifically describe training to be provided. Separate training for

residents of the project proposed for purchase (Activity 6 above) as a

separate item from training for Board members (Activity 7 above).
Provide

schedule of training, purpose, length of duration. Explain how the

training will achieve the purposes for which it is directed. Explain why

training is needed for Board members and why such skills are not
currently

possessed by the Board as one criteria for Board selection.

4\. SCHEDULE AND CALENDAR OF ACTIVITIES FOR THIS ITEM, INCLUDING

COMPLETION DATE:

EXAMPLE: FEB 96 MAR 96 APR 96 MAY 96

PREPARE PLAN OF ACTION A. 12 HRS A. 6 HRS A. 24 HRS COMPLETE

B. 2 HRS C. 6 HRS COMPLETE

TPA PACKAGE C. 12 HRS D. 14 HRS E.8 HRS

5\. PERSONNEL INVOLVED: (Provide a narrative of the method of obtaining

the most economical services for all contractors and consultants).
Include

the name and titles of all salaried personnel, all paid AND pro bono

consultants.

COST PER TOTAL TOTAL

NAME TITLE HR HOURS COST

A.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

B.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

C.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

D.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

Identify and describe the method of obtaining the most economical
services

for consultants and contractors which will be used by the organization.

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6\. SUPPLIES, MATERIAL AND EQUIPMENT COSTS FOR THIS ACTIVITY:

(for any item costing more than \$500 provide a description of the

organization\'s method of obtaining the most competitive cost of the
item)

These items are for direct costs of materials, supplies, and equipment.

Overhead expenses of consultants are contained within their hourly rate
as

an indirect expense. (See applicable OMB Circulars.)

Description Cost Purpose

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

7\. RENTAL SPACE: Provide location of space to be rented, and length of

rental period, including evidence that rental of space will not benefit

any members/directors of the Board or the Seller. Space costs of

consultants are included in their hourly rate as an indirect expenses.

(See applicable OMB Circulars.)

8\. Explain how the activity listed as a cost center fits into the
overall

plan which is supported by the residents to achieve the purchase of the

property.

Information requested in this Exhibit is required to evaluate cost

effectiveness of the organization\'s plans and is tied to the
organization\'s

certifications under Exhibit 12 of this application.

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EXHIBIT 3B

SECTION 2: COSTS AND ACTIVITIES SUMMARY

PHASE \_\_\_\_\_\_\_\_\_\_

Total Grant Grant Non-Funds

Activity Costs Requested Funds Approved

\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

1\. Legal Services to

incorporated applicant

and establish non-profit

corporation \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

2\. Accounting services,

accounting systems

and audit \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

3\. Architectural and

Engineering service \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

4\. Expression of interest,

Bona fide offers to

purchase \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

5\. Secure financing, prepare

TPA or Mortgage

documentation \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

6\. Training and Technical

Assistance for

Residents \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

7\. Training and Technical

Assistance for Board

of Directors \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

8\. Develop Management

Functions \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

9\. Negotiate Management

Contracts \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

10\. Market Studies \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_

11\. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

(Other Eligible

Activities)

12\. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_
\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

(Other Eligible

Activities)

TOTAL \_\_\_\_\_ \_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_

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EXHIBIT 6 - APPLICANT EXPERIENCE

1\. Applicant
Name\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Address\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2\. Sponsoring Organization
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(If applicable)

Sponsor
Address\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3\. Check one:

The information regarding experience is provided for

the sponsor because the applicant organization has no

direct experience in the development/management of

multi-family housing

The information regarding experience is provided for

the applicant because the applicant organization has

direct experience in the development/management of

multi-family housing.

The information regarding experience is provided for

Member(s)/Director(s) of the applicant organization

because the applicant organization has no direct experience in

the development/management of multi-family housing and has no

sponsor with direct experience in the development/management of

multi-family housing.

A. Provide details of experience and role in the

development/management of multi-family housing. Include name(s) of

project(s), type of financing, size and occupancy type, timeframe of

involvement. Attach as Exhibit 6A.

B. Provide details of experience and role in the provision of

multi-family ownership programs - for example, conversions of rental

programs to cooperatives or condominiums. Identify year of activity,

type of involvement, problems encountered, solutions, and result of

activities. Attach as Exhibit 6B.

C. Provide details of experience in organizing, developing and/or

training low income neighborhood or resident groups. Identify location,

year of involvement, length of involvement, problems encountered,

solutions, and result of activities. If consultants or Board members
will

be used to provide this expertise, provide detailed information for the

consultant experience. If consultants have not been selected, identify

the selection process to be used to obtain consultants who will provide

the level of experience required. Attach as Exhibit 6C.

D. Describe how the experience/expertise outline in Exhibits 6A, 6B,

and 6C is applicable and sufficient for the proposed tasks. Attach as

Exhibit 6D.

E. Provide information regarding staff experience. DO NOT PROVIDE A

STANDARDIZED RESUME. Describe the nature and extent of the experience of

the key staff, individually, in development/management of housing
projects

and provisions of technical assistance. Give specific names of projects,

dates of involvement, role played, individual contribution to results of

efforts. Give size of budget administered, number of employees
supervised,

number of clients served. State whether projects were troubled and how

issues were resolved.

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If positions have not yet been filled, describe requirements for

positions, principal duties and responsibilities, advertising and
selection

procedures.

Attach as Exhibit 6E.

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Exhibit 7 - Applicant Eligibility

1\. Name of
Organization\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Address\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Organization is filing as (check one):

Resident Council (per 24 CFR 249.101)

Resident Management Group

Community Based Non-Profit Organization (CBO)

(Per 24 CFR 248.101, and as approved by the Field Office)

2\. Date of Filing for Incorporation (if applicable)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date of Filing for IRS 501(c)(3)
status\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Copy of IRS letter of receipt dated \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
Exhibit 7A

Signed copy of IRS Form 8821, dated \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
Exhibit 7B

(PTAG App.Date)

3\. Members of the Board:

Name Address Board Term Low- Income

(Dates) Yes No

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4\. Articles of Incorporation

Attach a certified copy as Exhibit 7C.

5\. By-laws of the Organization

Attach a certified copy as Exhibit 7D.

Amendments must be attached as Exhibit 7E, or a statement that there

have been no amendments as of the date of the

PTAG application.

6\. By-laws must clearly identify the following information:

a\) Board members/directors may not serve more than two consecutive

terms, not to exceed three years per term.

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b\) Process by which board members/directors are appointed to the

Board. Board members/directors shall be selected by individuals

or organizations other than the current Board in an open process

which is outlined in the By-laws. No more than 1/3 of the board

members may be public officials. Up to 1/3 of the members may be

appointed by the State or local government.

c\) Board members/directors may not be related by blood, marriage, or

other operation of law, or have any business or close personal

connection with the Seller of the property, its agents, or any

staff/consultants of the Seller, or with any staff/consultants of

the applicant. This information is required to address the

requirement that the CBO is neither controlled by, nor under the

direction of, individuals or entities seeking to derive profit or

gain from the organization.

d\) Process by which members/directors may be removed from the Board

for cause. Removal must be in a public meeting, notice of which

is circulated to all interested parties. Removal of

members/directors must be by at least a 3/4 vote of the entire

membership of the Board.

e\) Board membership must at all times include a minimum of 1/3 of

the members representing the immediate low-income community,

including at least one member residing in the project and elected

by the residents of the project proposed to be purchased by the

applicant.

f\) Board membership must be comprised of members residing in the

community. For urban areas, \"community\" is the immediate

community of the project, defined as the boundaries of the area

in which the project is located, as defined in the applicable

CHAS for the project. For rural areas, \"community\" may be the

neighborhood or neighborhoods, town, village, country, or

multi-county area (but not the entire state), provided the Board

of Directors of the organization contains low-income residents

from each county of a multi-county area.

g\) Process used to provide a formal process for low-income, program

beneficiaries to advise the organization on its decisions

regarding the acquisition, rehabilitation, and management of

affordable housing.

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NOTE: This is for guidance only. It must be adapted for the specific

circumstances of the POA being submitted.

SUMMARY OF PLAN OF ACTION TO PURCHASE A PROJECT

TO: Tenants of \_\_\_(Name of Project)\_\_\_\_\_\_

\_\_(Name of owners)\_\_\_\_, the owners of \_\_\_(name of
project)\_\_\_\_ AND (Name of

Purchaser)\_\_\_\_\_\_ who will be purchasing the project, have
submitted a Plan

of Action (POA) to HUD requesting incentives to keep this project

affordable for you. A summary of this POA is below.

A copy of the complete POA is available for inspection and copying at
the

locations and times shown at the end of the summary. All documentation
to

support the POA, except proprietary (private) information is available
from

the owner and HUD at the addresses shown at the end of the Notice. You

have 60 days to review this summary, the POA and supporting material and
to

send your comments to the HUD Office.

PURCHASER\'S ADDRESS AND PHONE NUMBER

NAME, ADDRESS, AND PHONE NUMBER FOR MANAGEMENT AGENT

The following incentives are requested:

1\. \$\_\_\_\_\_ in HUD-Insured (or non-insured) loans and grants for
the

project:

A loan of \$\_\_\_\_\_\_\_\_\_\_\_ at percent interest to be paid back

(amortized) for a period of 40 years. The payments (debt

service) on this loan will be \$\_\_\_\_\_\_\_\_\_ paid monthly.

\$\_\_\_\_\_\_\_\_ in a grant from HUD.

The total funds are arrived at as follows:

\$\_\_\_\_\_\_\_\_\_ to buy the project from the present owners

\$\_\_\_\_\_\_\_\_ for expected rehabilitation costs. \$\_\_\_\_\_\_\_
of this

amount must be placed in a special reserve for replacement

account to be used for future repairs on the project. A list

of repairs, we are expecting to make are attached to this

summary.

\$\_\_\_\_\_\_\_\_\_\_\_ for transaction costs (other costs involved in

buying the project. The major costs in this category include:

Consultant Fees

Legal Fees

Organizational Costs of the Purchaser

Training Costs for the Purchaser\'s Board Members

Operating Deficit for the repair period and the phase-in

period.

(List any others being requested).

The purchaser is contributing \$\_\_\_\_\_\_\_\_\_ towards the cost of

purchase and repairs.

2\. An annual owner\'s distribution of up to
\$\_\_\_\_\_\_\_\_\_\_\_\_\_. The

purchaser/new owner can only take this distribution in any year

in which there are funds left over after all project expenses

have been met.

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3\. \$\_\_\_\_\_\_\_\_ for oversight costs to be added to the budget.
These

costs will be phased out as the Board of Directors gain

management experience and the help is no longer required.

The following requirements will affect tenants:

1\. All very low- and low-income tenants at the project who do not

have Section 8 vouchers or certificates will receive a Section 8

rental subsidy which will be given to the project. We are requesting

Section 8 for \_\_\_\_\_\_ tenants. Any family whose current income is
below

the following limits would qualify at this time:

INSERT CURRENT LOW-INCOME LIMITS

Section 8 Contract Rents are the amounts HUD guarantees after the

tenants have paid their share. We are requesting the following

Section 8 rents and utility allowances for the project:

TYPE GROSS RENT UTILITY ALLOWANCE CONTRACT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The rent plus utility allowance for tenants with Section 8 subsidy

will be set as are all Section 8 rents. For tenants not receiving the

subsidy, rent plus utility allowance will be set at the lowest of 30

percent of the family\'s adjusted monthly income (AMI) or HUD\'s fair

market rent (FMR) for the area. (If applicable: We feel that if

project specific rents (PSR) were calculated for this project, they

would be lower than FMR. We are therefore requesting that PSRs be

used instead of FMR. We will request use of PSRs in any year in

which they are lower than FMR in order to keep your rent lower.)

A Minimum Rent will also be set each year for tenants whose income

goes down when there is no Section 8 subsidy available. Initial FMRs

or PSRs we are requesting for this project are:

TYPE FMR or PSR UTILITY ALLOWANCE TENANT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

However, no current moderate-income tenant\'s rent will be reduced
because

of POA approval.

With these rents, the project should receive gross rents (Gross Rent

Potential) of \$\_\_\_\_\_\_\_\_. (For Section 236 projects: If more
than \$\_\_\_\_ is

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collected in rents each month, the excess will be returned to the

Government.) With the utility allowances for all apartments, the total

will be (Preservation Project Rents) \$\_\_\_\_\_\_\_\_\_\_\_\_\_.

Tenants will be selected to fill vacancies in order to meet the
following

income profile:

\_\_\_ Very Low-Income

\_\_\_ Low-Income

\_\_\_ Moderate Income

The rent for any tenant whose rent will be increasing more than 10% must
be

phased in. We are requesting that the phase in take place at the
following

rate:

INSERT PROPOSED RATE OF PHASE-IN, INCLUDING PASS THROUGH OF OPERATING

EXPENSE INCREASES

Since rents will vary based on your income, all increases in rent plus

utility allowances will be based upon an increase in the percentage of

income you are paying, rather than an increase in the total dollar
amount

paid. Therefore, you and your neighbor may be paying different rents in

any one year.

In exchange for the incentives we agree to keep the housing affordable
and

follow these and other HUD rules for 50 years or for the remaining
useful

life of the project, whichever is longer.

NAMES, ADDRESS AND TIMES AVAILABLE FOR INSPECTION FOR:

TENANT REPRESENTATIVES

HUD OFFICE

ON-SITE OFFICE

ATTACHMENT: List of Rehabilitation Items

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APPENDIX 8

NOTE: This is for guidance only. It must be adapted for the specific

circumstances of the POA being submitted.

SUMMARY OF PLAN OF ACTION TO RETAIN A PROJECT

To: Tenants of \_\_\_\_(Name of Project)\_\_\_\_\_\_

\_\_\_(Name of owners)\_\_\_, the owners of \_\_\_(name of
project)\_\_\_ have

submitted a Plan of Action (POA) to HUD requesting incentives to keep
this

project affordable for you. A summary of this POA is below.

A copy of the complete POA is available for inspection and copying at
the

locations and times shown at the end of the summary. All documentation
to

support the POA, except proprietary (private) information is available
from

the owner and HUD at the addresses shown at the end of the Notice. You

have 60 days to review this summary, the POA and supporting material and
to

send your comments to the HUD Office.

OWNER\'S ADDRESS AND PHONE NUMBER

NAME, ADDRESS, AND PHONE NUMBER FOR MANAGEMENT AGENT

The following incentives are requested:

1\. A loan of \$\_\_\_\_\_\_\_\_\_\_ at \_\_\_\_ percent interest which
will be

repaid over a period (amortized) of \_\_\_\_\_ years.

The total loan is composed of \$\_\_\_\_\_ for the owner\'s equity and
\$\_\_\_\_

\_\_\_ for rehabilitation of the project. The payments (debt service) on

this loan will be \$\_\_\_\_\_\_\_\_\_: \$\_\_\_\_\_\_\_\_ for the
equity portion and

\$\_\_\_\_\_\_ for the rehabilitation portion of the loan.

The list of rehabilitation items are attached. The owner is

contributing \$\_\_\_\_\_\_ over and above the loan towards this

rehabilitation. Of the amount set aside for rehabilitation,
\$\_\_\_\_\_\_

will be used to deposit into an account set aside for doing future

repairs (a reserve for replacement account). At loan closing, an

additional \$\_\_\_\_\_\_\_\_ will be put into a special account for a
period

of at least five years or until the project meets HUD\'s Housing

Quality Standards.

2\. An Annual Authorized Return of up to \$\_\_\_\_\_\_\_\_\_\_. This is
the

return on investment which the owner can take each year, in addition

to the debt service on the loan, if all expenses are paid and there is

money remaining in project funds.

The following requirements will affect tenants:

1\. All very low- and low-income tenants at the project who do not

have Section 8 vouchers or certificates will receive a Section 8

rental subsidy which will be given to the project. We are requesting

Section 8 for \_\_\_\_\_\_ tenants. Any family whose current income is

below the following limits would qualify at this time:

INSERT CURRENT LOW-INCOME LIMITS

Section 8 Contract Rents are the amounts HUD guarantees after the

tenants have paid their share. We are requesting the following

Section 8 rents and utility allowances for the project:

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TYPE GROSS RENT UTILITY ALLOWANCE CONTRACT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The rent plus utility allowance for tenants with Section a subsidy

will be set as are all Section 8 rents. For tenants not receiving the

subsidy, rent plus utility allowance will be set at the lowest of 30

percent of the family\'s adjusted monthly income (AMI) or HUD\'s fair

market rent (FMR) for the area. (If applicable: We feel that if

project specific rents (PSR) were calculated for this project, they

would be lower than FMR. We are therefore requesting that PSRs be

used instead of FMR. We will request use of PSRs in any year in

which they are lower than FMR in order to keep your rent lower.)

A Minimum Rent will also be set each year for tenants whose income

goes down when there is no Section 8 subsidy available. Initial

FMRs or PSRs we are requesting for this project are:

TYPE FMR or PSR UTILITY ALLOWANCE TENANT RENT

1 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

2 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3 BR \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other

(specify) \$ \_\_\_\_\_\_\_\_ \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\$\_\_\_\_\_\_\_\_\_\_\_\_\_\_

However, no current moderate-income tenant\'s rent will be reduced
because

of POA approval.

With these rents, the project should receive gross rents (Gross Rent

Potential) of \$\_\_\_\_\_\_\_\_. (For Section 236 projects: If more
than \$\_\_\_\_ is

collected in rents each month, the excess will be returned to the

Government.) With the utility allowances for all apartments, the total

will be (Preservation Project Rents) \$\_\_\_\_\_\_\_\_\_\_.

Tenants will be selected to fill vacancies in order to meet the
following

income profile:

\- Very Low-Income

\- Low-Income

\- Moderate Income

The rent for any tenant whose rent will be increasing more than 10% must
be

phased in. We are requesting that the phase in take place at the
following

rate:

105

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INSERT PROPOSED RATE OF PHASE-IN, INCLUDING PASS THROUGH OF OPERATING

EXPENSE INCREASES

Since rents will vary based on your income, all increases in rent plus

utility allowances will be based upon an increase in the percentage of

income you are paying, rather than an increase in the total dollar
amount

paid. Therefore, you and your neighbor may be paying different rents in

any one year.

In exchange for the incentives we agree to keep the housing affordable
and

follow these and other HUD rules for 50 years or for the remaining
useful

life of the project, whichever is longer.

NAMES, ADDRESS AND TIMES AVAILABLE FOR INSPECTION FOR:

TENANT REPRESENTATIVES

HUD OFFICE

ON-SITE OFFICE

ATTACHMENT: List of Rehabilitation Items

106