U.S. Department of Housing and Urban Development

H O U S I N G

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Special Attention of: Notice H 93-22 (HUD)

All Regional Administrators,

Directors, Office of Regional Issued: 4/6/93

Housing, Field Office Managers, Expires: 4/30/94

Directors, Housing Development
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Division (Categories A and B Cross References:

Field Offices) 4535.3 REV-1

Office of Finance and Accounting

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Subject: Close-out of Section 106(b) Nonprofit Sponsor

Assistance \"Seed Money\" Loan Program

Beginning with Fiscal Year 1991, the Department terminated

the Section 106(b) program with respect to new commitments for

fund reservations. Therefore, Field Offices are no longer

authorized to accept or approve Section 106(b) loan applications

(Form HUD-92290).

A. Section 202 and Section 811 Capital Advance Projects Funded

in Fiscal Year 1991 and Later.

The Section 106(b) program is not available for those

Section 202 and Section 811 capital advance projects which

were funded in Fiscal Year 1991 and later.

B. Section 202 Projects Funded in Fiscal Year 1990 and Earlier.

The program currently is limited to those Section 202

projects with outstanding 106(b) reservations or loans which

were approved for funding under the Direct Loan Program for

Housing for the Elderly or the Handicapped and subsequently

converted to the capital advance program (i.e., projects

funded in Fiscal Year 1990 and earlier).

1\. No new 106(b) fund reservations may be made in

connection with converted projects.

2\. Field Offices may continue to approve loans (execution

of the Loan Contract and Trust Agreement, Form

HUD-92291) for converted projects which already have

106(b) funds reserved. We anticipate few new loans

being made since most of the converted projects,

which have not yet initially closed, should have at

least proceeded to the application for firm commitment

stage by this time.

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HMEED Distribution:
W-3-1,W-2(H)(FHEO)(ZAS)(OGC)(PD&R),W-4(H),R-1,R-2,R-3,

R-3-1(H)(RC),R-3-2,R-3-3,R-6,R-6-1,R-6-2,R-7,R-7-1,

R-7-2,R-8,R-8-1

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

GPO 871 902

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3\. No increases in 106(b) fund reservations or loans may

be approved.

4\. Field Office Mortgage Credit staff should review their

files to determine whether there are any 106(b)

reservations outstanding that should have been canceled

and/or any loans outstanding that should have been

repaid and take action in accordance with HUD Handbook

4535.3 REV-1, except as modified herein, to close-out

the 106(b) account.

\(a\) To cancel a 106(b) fund reservation, Field Offices

must submit a memorandum to the Office of Finance

and Accounting (OFA) in Headquarters requesting

cancellation of the reservation. Attach a copy of

the approved Form HUD-92290 with \"TO BE CANCELED\"

written in bold letters on the front of the form.

Address the memorandum to the General Accounting

Division in OFA with a courtesy copy to Robert W.

Wilden as indicated at the end of this Notice.

\(b\) For those projects which were either canceled or

proceeded to initial closing for which 106(b) funds

were disbursed but not repaid (nor a request for a

waiver of repayment submitted to Headquarters),

Field Offices must take immediate action to collect

repayment. Repayments of 106(b) loans are to be

handled in accordance with the following procedures.

C. Section 106(b) Loan Repayments and Accounting Requirements.

Paragraph 4-1(d) of Handbook 4535.3 REV-1 requires the Field

Offices to deposit the check under Accounting Code Fund

Symbol 86x4O42 and Agency Location Code 86-01-0300, and

notify OFA of the deposit by memorandum identifying the

106(b) loan number. The memorandum also must advise OFA to

cancel any undisbursed funds, if appropriate. The following

forms, which are used in transacting the deposit, must be

attached to the memorandum.

1\. Deposit Ticket, Form SF-215 - Do not use a preprinted

Deposit Ticket. A blank Deposit Ticket must be used.

In block (3), type the Agency Location Code

86-01-0300 and in block (6), type the Accounting Code

Fund Symbol 86x4O42. Additional instructions are

contained on the reverse side of the \"confirmed copy\"

of the Deposit Ticket.

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2\. Official Receipt, Form HUD-27038 (Replaces Form

FHA-2006). To ensure crediting to the proper account,

the Field Office must insert code 86x4O42 in the space

headed \"Acctg. Code\" and identify the 106(b) project

number in the space headed \"FHA Case or Project Number.\"

3\. Schedule of Project Collections, Form HUD-3416 (Replaces

Form FHA-906). To adjust this form for the 106(b)

program, the Field Office must delete any one of the

preprinted programs appearing under the column headed

\"Insuring Sections,\" and insert \"106(b).\" Also, the

Field Office must include the accounting code 86x4042

on the form. Further, the Official Receipt Number which

is preprinted on Form HUD-27038, must be accurately

recorded on this form in the space headed \"List Receipt

Numbers Used.\"

D. Transmittal to Headquarters.

Attached are copies of these forms with the required changes.

We expect Field Offices to follow these procedures for 106(b)

deposits (loan repayments) at all times. When a deposit is

made, Field Offices must submit the above forms with the

required changes by covering memorandum to OFA, as follows:

Bobbie J. Henderson

Director, General Accounting Division, AFG

Attention: Richard Butler

Room 3230

Forward a copy to:

Director, Housing for the Elderly and

Handicapped People Division, HMEE

Attention: Evelyn Berry

Room 6116

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Associate General Deputy

Assistant Secretary for Housing

Attachments

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Attachment - 1

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D E P O S I T T I C K E T

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Attachment - 2

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Instructions for Preparation of form HUD-51000

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