HUD Releases Notice H 2018-02
On March 22nd, the Department of Housing and Urban Development (HUD) released Notice H 2018-02 to provide “additional guidance to owners of pre-1974 Section 202 Direct Loan properties that have the option of refinancing the Section 202 Direct Loan for the purposes of reducing the interest rate and/or making capital improvements.” The Notice provides guidance about how HUD may provide rental assistance under the Housing Choice Voucher (HCV) program or project-based rental assistance under a Senior Preservation Rental Assistance Contract (SPRAC).
Pursuant to the Notice, HUD is making available $5 million (from FY17 HUD funding) to award new SPRACs to qualified projects. These contracts will be awarded on a first-come, first-serve basis, and complete prepayment requests should be submitted to SPRAC@hud.gov. Changes to the request may be made after it is submitted to SPRAC@hud.gov without impacting its priority.
To receive the SPRAC, an owner must:
-
Have a Management and Occupancy Review score that is satisfactory or higher and have no open referrals to the Departmental Enforcement Center, unless the Owner can demonstrate to HUD’s satisfaction that a plan has been established to replace the management agent or take other corrective actions sufficient to address the problem and that such plan can and will be implemented in a timely manner;
-
Demonstrate in the refinancing request that the units proposed to be covered under the SPRAC could not be covered by a Project-Based Voucher (PBV) contract and are not otherwise assisted by a Section 8 contract;
-
Commit to serving very low-income elderly residents upon unit turnover;
-
Be approved for and close on the refinance of the current Section 202 Direct Loan before the loan’s mortgage maturity date; and
-
Comply with federal civil rights and fair housing laws and requirements. Outstanding civil rights matters must be resolved to HUD’s satisfaction prior to grant award, provided that all applicable legal processes have been satisfied.
LeadingAge National has provided further information about the guidance the Notice provides about Project-Basing of Tenant Protection Vouchers and Senior Preservation Rental Assistance Contracts. That article may be found here, and the article’s author, Gates Dunaway, has been hired by LeadingAge to advise members about preservation and finance-related issues. She may be contacted at gates@gatesdunawaygroup.com.
Contact: Sara Neitzel, sneitzel@leadingageny.org, 518-867-8835