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PRA Dept. Clearance (2502-0305)_60-Day_OMB Collection (Management
Certification& Entity Profile)
Regulation of Mortgagors§ 200.105Mortgagor supervision.(a) As long as the Commissioner is the
insurer or holder of the mortgage, the Commissioner shall regulate the mortgagor by means of a
regulatory agreement providing terms, conditions and standards established by the Commissioner, or by
such other means as the Commissioner may prescribe.(b) The Commissioner may delegate to the
mortgagee or other party the Commissioner's authority, in whole or in part, in accordance with the terms,
conditions and standards established by the Commissioner in any executed Regulatory Agreement or
other instrument granting the Commissioner supervision of the mortgagor.
[61 FR 14399, Apr. 1, 1996, as amended at 65 FR 61074, Oct. 13, 2000]
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
U.S. Department of Housing and Urban Development
H O U S I N G
Special Attention of:
Secretary's RepresentativesTransmittal for Handbook No.: 4381.5
REV-2
Area Coordinator, Housing Director,
CHG-2
Directors of Multifamily Housing,
Issued: 09/15/97
Divisions, and Asset Management
Branch Chiefs, All Owner/Borrower/
Management Agencys
1.
This Transmits: Correction to HBK 4381.5, REV-2, CHG-2.
2.
Explanation of Materials transmitted:
These pages correct the misprint in the original version of
CHG-2, in which page 9-10 in Chapter 9 and page 9-10 in
Appendix 9 were accidently reversed.
3.
Effective Date:
Note:
4.
Date of Publication
This document should be transmitted to all
managements agents and project owners.
Filing Instructions:
Remove:
Insert:
HBK 4381.5 REV-2,
CHG-2
HBK 4381.5 REV-2, CHG-2
pgs. 9-9, 9-10,
chap. 9, dated 6/97
pgs. 9-9, 9-10, chap.9,
dated 8/97
pgs. 9-10, 10-10,
Append. 9, dated 6/97
pgs. 9-10,, 10-10, Append. 9,
dated 8/97
Nicolas P. Retsinas
Assistant Secretary for HousingFederal Housing Commissioner
H: Distribution: W-3-1
U.S. Department of Housing and Urban Development
H O U S I N G
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DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Special Attention of:
Transmittal Handbook No.: 4381.5 REV-2
CHG-2
All Secretary's Representatives,
Issued: June 27, 1997
State Coordinators, Area
Coordinators, Directors, Office of
Housing (Super A Offices),
Directors, Multifamily Division,
Asset Management Branch Chiefs,
RHS State Offices, State HFAs
RHS Headquarters Staff, Owners and
Management Agents of HUD-insured and
HUD-Assisted Properties
------------------------------------------------------------------------1.
This Transmits: Change 2 to HUD Handbook 4381.5, REV-2, the
HUD Management Agent Handbook.
2.
Explanation of Materials Transmitted: The materials
transmitted herewith are items from the issuing Notices.
Information is substantively unchanged. Items include:
(a)
Two additions to Chapter 5.
In the first, a new paragraph 5.3(a)(3) is added,
cross-referencing chapter 9. The second adds a new
paragraph 5.4 covering telecommunications, from Notice
H-96-19.
(b)
An update to Chapter 8, and additional new material.
The updated and new material contains a new Section 8.5
on "Quality Assurance", to conform to Notice H94-99, a
new Section 8.9 on "Training Guidelines" for Service
Coordinator from HUD Notice H-95-16, and appropriate
references to the new Chapter 9 (see item c, following)
for the "On-line Services Coordinator" (OLSC) from
Notice H-95-81.
(c)
A new Chapter 9, entitled "Neighborhood Networks,"
issued originally as Notice H-95-81.
(d)
A new Appendix 7, a fact sheet entitled "Neighborhood
Networks Initiative" for Field Office use.
H: Distribution: W-3-1
4381.5 REV-2
CHG-2
2
3.
(e)
A new Appendix 8, sample Pledge Form for Citizens
Education Fund.
(f)
A new Appendix 9, Model By-Laws for Non-Profit Resident
organizations.
(g)
A new Appendix 10, Donation of Excess Computers to Non-Profit
Organizations and Educational Institutions.
Effective Date: Date of Publication
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NOTE:
4.
This document should be distributed to all
management agents and project owners.
Filing Instructions:
Remove:
Insert:
Handbook 4381.5 REV-2,
Handbook 4381.5 REV-2,
CHG-2
Pages iii, v, vi, vii,
Pages iii, iv, v, vi,
dated
viii dated 12/94
Pages 5-1 and 2, dated
12/94
Pages 8-1 to 15, dated
12/94
6/97
Pages 5-1 to 5-5, dated
6/97
Pages 8-1 to 8-30, dated
6/97
Pages 9-1 to 9-27, dated
6/97
Appendix 7 pgs 1-2, dated
6/97
Appendix 8, pg. 1, dated 6/97
Appendix 9, pgs 1-10, dated
6/97
Appendix 10, pgs 1-4, dated
6/97
Appendix 10A, pg. 1, dated
6/97
10B, pg. 1, dated 6/97
10C, pg. 1, dated 6/97
Appendix 10D, pg. 1-3, dated 6/97
Nicolas P. Retsinas
Assistant Secretary for HousingFederal Housing Commissioner
U.S. Department of Housing and Urban Development
HOUSING
Special Attention of:
Transmittal for Handbook No.:
4381.5 REV-2
Directors of Housing;
Multifamily Housing Division
Issued:
Directors, Asset Management
Branch Chiefs; Owners and
Management Agents; Contract Administrators
CHG-1
05/28/96
1.
This Transmits revised HUD Forms-9389 A,B and C, which are found in
Appendix 3A-C of Handbook 4381.5 REV- 2, "The Management Agents Handbook."
2.
Explanation of Materials transmitted:
The revised forms update those in the original Handbook. Number 1 and
the subparagraph lettering have been changed in each form.
The update makes them consistent with Chapter Two, Section 2-9(c),
page 2-8, of HBK 4381.5 REV-2.
3.
Usage:
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It is important that the appropriate certifications be updated by
projects over the next year.
Thus, as projects send materials to the HUD field office for an annual
budget approval, or other needed changes, they should also sign and send in
the appropriate, new, HUD-9389A, B or C. otherwise, field office staff must
include the appropriate HUD-9389A, B or C with any approval done for the
project. The form must be signed and returned to HUD by project staff/
management prior to any HUD final approval/implementation of actions with
respect to that project. All HUD-9389 certifications on file must be updated
within twelve months of the date of this Transmittal.
Remove:
Insert:
Appendices 3A, B, and C,
dated 8/91
Appendices 3A, B, and C,
dated 5/96
Nicolas Retsinas
Assistant Secretary for HousingFederal Housing Commissioner
HMMM: Distribution: W-3-1, R-1, R-2, R-3-1(H)(RC), R-3-2, R-3-3, R- 6, R-6-2,
R-7, R-7-2, R-8, ASC
U.S. Department of Housing and Urban Development
H O U S I N G
___________________________________________________________________________
Special Attention of:
Transmittal Handbook No.:
State Coordinators; Directors of Housing;
Directors, Multifamily Housing Division,
Issued: December 29, 1994
Multifamily Housing Management and
Development Branch Chiefs;
Contract Administrators; Owners and
Management Agents of HUD-Insured and HUD-Assisted Properties
___________________________________________________________________________
1.This Transmits
HUD Handbook 4381.5 REV-2, The Management Agent Handbook. This
handbook applies to management agents of both HUD-insured and
HUD-assisted properties and supersedes the previous version of
Handbook 4381.5.
2.Explanation of the Materials Transmitted: This handbook has been
substantially rewritten to provide comprehensive guidance with respect
to approval of management agents, allowable management fees from
project funds, and program monitoring responsibilities. This handbook
also provides new guidance with respect to resident relations and
encouraging training and employment opportunities for residents and
woman- and minority-owned businesses. Because the handbook has been
substantially rewritten, it should be read in it's entirety. The most
significant changes are highlighted below.
A.Chapter 1, Introduction. This chapter discusses the partnership
between HUD, the management agent and residents of HUD-associated
properties. This chapter also develops the concept for resolving
issues concerning management agents and practices on a regional
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basis.
B.Chapter 2, Selecting and Approving Management Agents. This
chapter incorporates and expands the management agent approval
process as contained in the current handbook in Chapter 2,
Section 1.
C.Chapter 3, Allowable Management Fee from Project Funds. This
chapter incorporates the fee approval process as developed in the
current handbook in Chapter 2, Sections 2-6. Additionally, this
chapter discusses a fee percentage adjustment method which will
be utilized on properties requesting and approved to receive rent
increases greater than 20% of current rent potential.
D.Chapter 4, Working with Residents. This chapter was added to
discuss ways owners/agents can develop positive and productive
tenant/owner/agent relationships. Resident input requirements
are outlined as well as requirements that owners/agents must
follow when dealing with resident organizations and tenant
concerns. A recommended process to address tenant concerns
entitled "Service Requests," is provided for Management Agents
who do not presently have a "work order system" in place.
Finally, HUD oversight of tenant/management relationships is also
covered.
___________________________________________________________________________
HMHP : Distribution: W-3-1,W-2(H),W-3(A)(H)(OGC)(ZAS),R-1,R-2,R-3,R-3-1,
R-3-2,R-3-3,R-6,R-6-1,R-6-2,R-7,R-7-1,R-7-2, State
Agencies and Owners and Agents
HUD-23 (9-
E.Chapter 5, Encouraging Training and Employment Opportunities.
This Chapter encourages owners and agents to create opportunities
for project residents, in all of their contracting efforts as
well as employing women and minority owned businesses. HUD
monitoring and oversight requirements are also defined.
F.Chapter 6, Program Monitoring. This chapter provides an overview
of many of the monitoring tools which are available to the Loan
Management Staff in monitoring the management of HUD properties.
In addition to Management Reviews, Physical Inspections and
Financial Statement Reviews, this handbook develops a management
review process for the management agents central office.
Section 4 of this chapter, entitled Financial Compliance
discusses indepth the expenses that may be paid from project
income. Permissible expenses have been expanded to include:
1)payment of a portion of retirement proceeds for on-site
management staff;
2)creation of a budgeted line item for training for on-site
management staff in the budgeted rent increase process,
eliminating the need for training costs to be approved by
HUD on an individual basis; and
3)permitting the management entity to charge non-supervisory
agent staff to the project on a prorated hourly basis when
filling in for an on-site project staff position;
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4)permitting the management entity to bill costs related to
the centralized bookkeeping process to the properties which
this process serves. This now includes overhead costs such
as supervisory staff who oversee the centralized bookkeeping
process.
G.Chapter 7, Program Compliance. Discussed in this chapter are the
types of violations, remedies and sanctions available to HUD to
correct the violation.
H.Chapter 8, Service Coordinators. While this has been a
permissible expense in the past for elderly properties, this
chapter would permit HUD to approve a rent increase for both
budget-based and AAF rents where the owner could justify the
expense of a Service Coordinator.
I.Please note that under a new reorganization of Farmer's Home
(FmHA), their name has changed. This handbook now reflects their
new name, the Administration for Rural Housing and Economic
Development Services (ARHEDS).
3.Effective Date:
Immediately
4.Filing Instructions:
Remove:
Handbook 4381.5 REV-1
and changes 1-5, dated 6/86
Insert:
Handbook 4381.5 REV-2
dated 12/94
________________________________________
Nicolas P. Retsinas, Assistant Secretary
for Housing-Federal Housing Commissioner
Handbook
4381.5 REV-2
U.S. Department of Housing and Urban
Development
Office of Multifamily Housing
___________________________________________________________________________
December 1994
The
Management
Agent Handbook
___________________________________________________________________________
___________________________________________________________________________
HMHP:
W-3-1,W-2(H),W-3(A)(H)(OGC)(ZAS),R-2,R-3,R-3-1,R-3-2,R-3-3,R-6,
R-6-1,R-6-2,R-7,R-7-1,R-7-2, State Agencies and Owners and Agents
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
4381.5 REV-2
___________________________________________________________________________
TABLE OF CONTENTS
CHAPTER ONE:
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
GENERAL...................................................
APPLICABILITY.............................................
PURPOSE OF THIS HANDBOOK..................................
HUD GOALS.................................................
COOPERATION...............................................
OWNER/MANAGEMENT AGENT RELATIONSHIP.......................
HUD/MANAGEMENT AGENT RELATIONSHIP.........................
RESIDENTS' RELATIONSHIP WITH OWNERS, MANAGEMENT
AGENTS, AND HUD...........................................
RESOLVING CONFLICTS AND MANAGEMENT ISSUES.................
WAIVER OF HANDBOOK DIRECTIVES BY HUD AREA OFFICES.........
ORGANIZATION OF THIS HANDBOOK.............................
OTHER REFERENCES..........................................
CHAPTER TWO:
2.1
INTRODUCTION
1-5
1-6
1-6
1-8
1-9
APPROVAL OF MANAGEMENT AGENTS
INTRODUCTION..............................................
SECTION 1:
2.2
1-1
1-1
1-3
1-4
1-4
1-5
1-5
2-1
BACKGROUND
AGENT SELECTION AND APPROVAL AUTHORITY.................... 2-1
2.3
TYPES OF MANAGEMENT AGENTS................................
2.4
PRINCIPLES OF THE REVIEW PROCESS..........................
2.5
STANDARDS FOR MANAGEMENT AGENT APPROVAL...................
2.6
MANAGEMENT AGENT ASSUMPTION OF RESPONSIBILITY.............
2.7
MANAGEMENT IN EMERGENCY SITUATIONS........................
2.8
SUBSEQUENT AGREEMENTS WITH MANAGEMENT AGENTS..............
SECTION 2:
2.9
2.10
2.11
2-2
2-4
2-5
2-5
2-6
2-6
PROCEDURES FOR HUD APPROVAL OF MANAGEMENT AGENTS
OWNER/MANAGEMENT ENTITY APPROVAL SUBMISSION
REQUIREMENTS.............................................. 2-7
AGENT ELIGIBILITY BASED ON PREVIOUS PARTICIPATION......... 2-9
AGENT ELIGIBILITY IN SECTION 202 PROJECTS................. 2-11
___________________________________________________________________________
i
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4381.5 REV-2
___________________________________________________________________________
2.12
REVIEW OF AGENT PERFORMANCE, EXPERIENCE, AND CAPABILITY... 2-12
2.13 CONDUCTING REVIEWS OF AGENT QUALIFICATIONS................
2.14 BONDING REQUIREMENTS FOR AGENTS...........................
2.15 APPROVAL OF THE PROPOSED MANAGEMENT AGENT.................
2.16 DISAPPROVAL OF THE PROPOSED MANAGEMENT AGENT..............
2.17 MANAGEMENT AGREEMENT REQUIREMENTS.........................
SECTION 3:
REVIEW PROCEDURES FOR MANAGEMENT ENTITIES SUBJECT TO
ARHEDS OR STATE/LOCAL AGENCY APPROVAL
2.18
GENERAL................................................... 2-22
2.19
STATE/LOCAL AGENCY AND ARHEDS PROCESSING PROCEDURES....... 2-22
CHAPTER THREE:
3.1
ALLOWABLE MANAGEMENT FEES FROM PROJECT FUNDS
GENERAL...................................................
SECTION 1:
3.2
2-16
2-17
2-18
2-19
2-19
3-1
MANAGEMENT FEES AND REVIEW REQUIREMENTS
TYPES OF MANAGEMENT FEES.................................. 3-2
3.3
RESIDENTIAL INCOME FEE.................................... 3-2
3.4
COMMERCIAL INCOME FEE..................................... 3-3
3.5
MISCELLANEOUS INCOME FEE.................................. 3-4
3.6
SPECIAL FEES.............................................. 3-4
3.7
ADD-ON FEES............................................... 3-6
3.8
PROJECTS SUBJECT TO HUD MANAGEMENT FEE REVIEWS............ 3-8
3.9
APPLICABLE MANAGEMENT FEE FOR RENT INCREASE REQUESTS...... 3-11
3.10 OWNER REQUESTS FOR CHANGES IN EXISTING FEES............... 3-13
3.11 TERM OF HUD-APPROVED MANAGEMENT FEES...................... 3-15
SECTION 2:
3.12
3.13
3.14
3.15
3.16
3.17
PROCEDURES FOR PERFORMING MANAGEMENT FEE REVIEWS
BASIC PROCEDURES FOR PERFORMING MANAGEMENT FEE
REVIEWS...................................................
UP-FRONT MANAGEMENT FEE REVIEWS...........................
AFTER-THE-FACT MANAGEMENT FEE REVIEWS.....................
NOTIFICATIONS TO OWNERS AND AGENTS........................
APPEALS...................................................
DOCUMENTING MANAGEMENT FEE DECISIONS......................
3-16
3-17
3-18
3-20
3-20
3-22
___________________________________________________________________________
4381.5 REV-2
CHG-2
SECTION 3:
ASSESSING REASONABLENESS OF MANAGEMENT
FEES
3.18 OVERVIEW
3.19 CALCULATING THE RANGE OF ACCEPTABLE RESIDENTIAL
FEE YIELDS
3.20 REVIEWING RESIDENTIAL MANAGEMENT FEES
3.21 REVIEWING THE REASONABLENESS OF ADD-ON FEES
3.22 REVIEWING THE REASONABLENESS OF COMMERCIAL AND
3-23
3-24
3-28
3-30
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MISCELLANEOUS FEES
3.23 REVIEWING THE REASONABLENESS OF SPECIAL FEES
SECTION 4:
3-32
3-32
SPECIAL PROVISIONS FOR FEES APPROVED ON
OR BEFORE AUGUST 1, 1986
3.24 GENERAL
3.25 CONTINUATION OF EXISTING AGREEMENTS
3.26 REQUESTS FOR INCREASES IN PERCENTAGE FEES AT
OWNER-MANAGED PROJECTS AND PROJECTS WITH
OPEN-ENDED AGREEMENTS
3.27 RENEWALS OF EXISTING FIXED-TERM AGREEMENTS
3-34
3-34
3-24
3-36
CHAPTER FOUR: WORKING WITH RESIDENTS
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
GENERAL
APPLICABILITY
DEVELOPING A COLLABORATIVE RELATIONSHIP
RESIDENT INPUT REGARDING OWNER REQUESTS TO HUD
RESIDENT EFFORTS TO OBTAIN ASSISTANCE
RELATIONS WITH RESIDENT ORGANIZATIONS
ADDRESSING RESIDENT SERVICE REQUESTS/COMPLAINTS
HUD OVERSIGHT
CHAPTER FIVE:
5.1
5.2
5.3
5.4
5.5
4-1
4-1
4-1
4-2
4-3
4-4
4-5
4-7
ENCOURAGING TRAINING AND EMPLOYMENT
OPPORTUNITIES
GENERAL
SECTION 3 (EMPLOYMENT, TRAINING AND CONTRACTING
OPPORTUNITIES FOR PROJECT AREA RESIDENTS AND
BUSINESSES) -- RESERVED
ENCOURAGING PARTICIPATION OF WOMAN - AND
MINORITY-OWNED BUSINESSES
TELECOMMUNICATIONS SERVICES
HUD MONITORING AND ASSISTANCE
6/97
5-1
5-1
5-1
5-2
5-5
iii
4381.5 REV
CHG-2
SECTION 2: PHYSICAL INSPECTIONS
6.8
6.9
6.10
6.11
6.12
6.13
6.14
6.15
6.16
6.17
6.18
6.19
6.20
HUD'S PHYSICAL INSPECTION PROGRAM
MORTGAGEE AND CONTRACT ADMINISTRATOR
USE OF CONTRACTORS
INSPECTION STANDARDS
PRIORITIES FOR SCHEDULING PHYSICAL INSPECTIONS
CONDUCTING THE INSPECTION
DOCUMENTATION OF THE PHYSICAL INSPECTION AND
FINDINGS
AREA OFFICE COUNSEL REVIEW
NOTIFICATION OF THE OWNER/MANAGEMENT AGENT
CORRECTIVE ACTION PLANS
MONITORING CORRECTIVE ACTION
TECHNICAL DEFAULTS
NON-ROUTINE INSPECTIONS
SECTION 3:
6-8
6-9
6-9
6-10
6-10
6-11
6-12
6-13
6-13
6-13
6-15
6-16
6-18
MANAGEMENT REVIEWS
6.21 PURPOSE OF MANAGEMENT REVIEWS
6.22 TYPES OF MANAGEMENT REVIEWS
6-19
6-19
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6.23
6.24
6.25
6.26
6.27
6.28
6.29
6.30
6.31
6.32
6.33
DETERMINING THE SCOPE OF REVIEW
SCHEDULING MANAGEMENT REVIEWS
STEPS FOR PERFORMING THE MANAGEMENT REVIEW
FAIR HOUSING AND EQUAL OPPORTUNITY
CONSIDERATIONS
TIMEFRAME FOR COMPLETING REPORT
NOTIFICATION OF THE OWNER/MANAGEMENT AGENT
CORRECTIVE ACTION PLANS
ADDRESSING NONCOMPLIANCE
TECHNICAL DEFAULTS
AGENTS MANAGING MORE THAN ONE PROPERTY
REVIEWS OF MANAGEMENT AGENTS' CENTRAL OFFICES
SECTION 4:
6.34
6.35
6.36
6.36
6.38
6.39
6.40
6.41
6.42
6.43
6.44
6.45
6-19
6-20
6-20
6-21
6-22
6-22
6-22
6-23
6-24
6-24
6-25
FINANCIAL COMPLIANCE
OVERVIEW
6-27
RELATIONSHIP TO MANAGEMENT REVIEW
6-27
REVIEWING ANNUAL FINANCIAL STATEMENTS
6-27
ASSIGNING MANAGEMENT COSTS
6-28
MANAGEMENT COSTS CHARGED TO THE PROJECT'S OPERATING
ACCOUNT
6-29
MANAGEMENT PAID FROM THE MANAGEMENT FEE
6-34
OFFSETTING AGENT'S COSTS FOR PURSUING RESIDENTS
FRAUD
6-35
ASSET MANAGEMENT SERVICES
6-36
FIDELITY BOND COST ALLOCATION
6-37
WORKER'S COMPENSATION DIVIDENDS
6-37
PROJECTS NOT SUBJECT TO MANAGEMENT FEE REVIEWS
6-37
CASH MANAGEMENT
6-38
iv
6/97
4381.5 REV-2
CHG-2
6.46 DISTRIBUTION OF SURPLUS CASH
6.47 MAINTAINING PROJECT FUNDS IN INSURED ACCOUNTS
6.48 MONITORING EXCESS INCOME FROM SECTION 236
PROJECTS
6.49 MONITORING EQUITY SKIMMING
6.50 CONTRACTING GUIDELINES
SECTION 5:
6.51
6.52
6.53
6.54
6.55
6-38
6-38
6-39
6-40
6-41
PROVISIONS OF CONTRACTS AND REGULATORY
AGREEMENTS
OVERVIEW
REVIEWS AND CORRECTIVE ACTION
MONITORING RENTAL ASSISTANCE CONTRACTS
MONITORING FLEXIBLE SUBSIDY CONTRACTS
MONITORING REGULATORY AGREEMENTS
6-42
6-42
6-43
6-44
6-46
CHAPTER SEVEN: PROGRAM COMPLIANCE
7.1
7.2
7.3
7.4
7.5
7.6
GENERAL
AUTHORITY
COMPLIANCE VIOLATIONS
TYPES OF SANCTIONS
PROCEDURES FOR RESPONDING TO VIOLATIONS
ADDITIONAL ENFORCEMENT ACTIONS
7-1
7-1
7-1
7-4
7-5
7-8
CHAPTER EIGHT: SERVICE COORDINATORS
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8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
GENERAL
ELIGIBILITY
AUTHORITY
SERVICE COORDINATOR FUNCTIONS AND QUALIFICATIONS
QUALITY ASSURANCE
OWNER SUBMISSION REQUIREMENTS
FIELD OFFICE/CONTRACT ADMINISTRATOR PROCESSING
INSTRUCTIONS
APPEALS OF SPECIAL RENT INCREASE DECISIONS
TRAINING GUIDELINES FOR SERVICE COORDINATORS
8-1
8-1
8-3
8-3
8-9
8-9
8-14
8-16
8-16
CHAPTER NINE: NEIGHBORHOOD NETWORKS
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
PURPOSE
BACKGROUND
HOUSING COMMUNITY ELIGIBILITY
FUNDING OF THE NEIGHBORHOOD NETWORK
BUSINESS PLAN (NNBP)
ELIGIBLE COSTS OF AN NNBP
REQUIRED COMPONENTS OF AN NNBP
LOCAL HUD OFFICE REVIEW
MONITORING/REPORTING/TECHNICAL ASSISTANCE
6/97
9-1
9-1
9-11
9-12
9-16
9-20
9-22
9-25
v
4381.5
CHG-2
TABLE OF APPENDICES
Appendix 1:
Previous Participation Certification (Form HUD-2530) with
Instructions
Appendix 2:
Management Entity Profile (Form HUD-9832)
Appendix 3:
Management Certification Forms (Form HUD-9839-A, B,
or C)
Appendix 3A:
Project Owner's Certification for Owner-Managed Multifamily
Housing Projects (Form HUD-9839-A)
Appendix 3B:
Project Owner's and Management Agent's
Certification for Multifamily Housing Projects
for Identity of Interest or Independent
Management Agents (Form HUD-9839-B)
Appendix 3C:
Project Owner's/Borrower's Certification for
Elderly Housing Projects Managed by
Administrators (Form HUD-9839-C)
Appendix 4:
Special Instructions for Processing Rent Increases
for Projects That Use A Cost-Based Rent Formula
Appendix 5:
Management Review Form and Instructions (Form HUD-9834)
Appendix 6:
Physical Inspection Report (Form HUD-9822)
Appendix 7:
Neighborhood Networks Initiative (fact sheet)
Appendix 8:
Sample Pledge Form
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Appendix 9:
Model By-Laws
Appendix 10:
Donation of Excess Computers to Non-profit
Organizations and Educational Institutions
Appendix 10A:
SF-122
Appendix 10B:
Request from Project to Field Office
Appendix 10C:
Request from Field Office to Project site
Appendix 10D:
Gift Certification Form
vi
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___________________________________________________________________________
LIST OF FIGURES
Figure 1-1:
Figure 1-2:
Figure 1-3:
Partnership Among Key Actors.......................... 1-2
Applicability by Type of HUD Property................. 1-3
Additional HUD Reference Materials.................... 1-10
Figure
Figure
Figure
Figure
Approval Authority by Project Type.................... 2-1
Four Types of Management Agents....................... 2-2
Key Steps in Management Agent Approval Process........ 2-7
Information HUD Area Offices Might Need to Assess
the Acceptability of a Proposed Management Agent...... 2-10
Determining Whether Changes Are Needed
in the Management Agent's Operating Procedures........ 2-13
Assessing an Agent's Past Performance and
Probability of Future Compliance...................... 2-15
2-1:
2-2:
2-3:
2-4:
Figure 2-5:
Figure 2-6:
Figure
Figure
Figure
Figure
3-1:
3-2:
3-3:
3-4:
Figure 3-5:
Figure 3-6:
Figure 3-7:
Figure 3-8:
Figure 3-9:
Figure 6-1:
Figure 6-2:
Determining Residential Income........................
Determining Commercial Income.........................
Determining Miscellaneous Income......................
Examples of Long-Term Project Conditions That Could
Justify Add-On Fees...................................
Timing of Area Office Review of Management Fees.......
Effect of a Rent Increase on the Management Fee.......
Adjusting the Residential Management Fee Percentage
for Projects Receiving Significant Rent Increases.....
Example of Residential Fee Range Determination........
The Management Fee Review Process.....................
3-3
3-3
3-4
3-7
3-9
3-12
3-14
3-27
3-35
Priorities for HUD Inspections........................ 6-11
Examples of Costs Paid from Management Fee and
Project Account....................................... 6-30
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LIST OF EXHIBIT
Exhibit 4-1:
SAMPLE RESIDENT SERVICE REQUEST FORM.................. 4-11
Exhibit 6-1:
INDICATORS FOR TROUBLED/POTENTIALLY TROUBLED
PROJECTS.............................................. 6-48
___________________________________________________________________________
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4381.5 REV-2
___________________________________________________________________________
CHAPTER ONE
INTRODUCTION
1.1
GENERAL
a.Management agents that operate HUD-insured and HUD-assisted
multifamily properties play a key role in helping HUD provide
quality affordable housing. A principal focus of this handbook
is the development of an effective partnership among owners,
their management agents, residents and resident associations, and
HUD staff to provide quality affordable housing (see Figure 1-1).
Throughout this handbook, the term "partnership" specifically
refers to the roles of property owners, management agents,
residents, and HUD in working together to meet this objective.
b.This handbook provides guidance regarding most aspects of HUD's
relationship and interaction with owners and management agents of
HUD-insured and HUD-assisted properties. It also includes
guidance regarding the involvement of residents and their
representative organizations in key decisions concerning their
projects and the importance of supporting resident efforts to
organize.
c.Most of the activities discussed in this handbook are the
responsibility of the Office of Multifamily Housing Management.
The handbook also describes the role of the Office of Fair
Housing and Equal Opportunity (FHEO) in ensuring compliance with
civil rights requirements.
1.2
APPLICABILITY
a.The guidance presented in this handbook applies to management
agents of both HUD-insured and HUD-assisted properties. Figure
1-2 lists the different types of HUD properties subject to the
provisions of this handbook.
b.Depending upon the circumstances, HUD, the Administration for
Rural Housing and Economic Development Services (ARHEDS), or a
state/local agency will be responsible for oversight of
management agent activities. In general, state agency-financed
projects that are also HUD-insured follow the rules for
HUD-insured properties. Agents managing projects that are
financed under the ARHEDS Section 515 program generally receive
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guidance from ARHEDS rather than HUD.
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Figure 1-1
HUD is Seeking
To Foster A Partnership Among
Key Actors
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1.3
PURPOSE OF THIS HANDBOOK
a.This handbook describes the procedures that Loan/Asset Management
and other HUD staff need to follow in working with and monitoring
management agents of HUD-insured and HUD-assisted properties.
The handbook is also designed to serve as a reference for owners
and their management agents.
Figure 1-2
Applicability by Type of HUD Property
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===========================================================================
Types of Properties
Programs Affected
===========================================================================
1. Insured Multifamily Housing
Section 221(d)(3)
Section 221(d)(4)
Section 207 & Section 220
Section 231
2. Interest Subsidy Projects
Section 221(d)(3) BMIR
Section 236
3. Project-Based Rental Assistance
Section 8 Multifamily Programs
(except Mod Rehab)
Rent Supplement and RAP
4. Direct Loans for Housing for the
Section 202 and Section 202/8
Elderly or the Handicapped
Section 811
===========================================================================
b.While this handbook provides basic guidance regarding owner/agent
responsibilities and HUD procedures, it is designed to be used in
conjunction with:
(1)HUD Handbook 4350.1, Multifamily Asset Management and
Project Servicing; and
(2)HUD Handbook 4350.5, Subsidy Contract Administration and
Monitoring,
as well as the relevant HUD multifamily housing handbooks listed
at the end of this chapter.
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___________________________________________________________________________
1.4
HUD GOALS
a.The Office of Multifamily Housing has established the following
goals to guide the administration HUD's insured and assisted
housing programs:
(1)Assuring decent, safe, and sanitary housing for those the
housing was constructed to serve. HUD is charged with the
responsibility to help provide and preserve an adequate
supply of affordable housing.
(2)Minimizing losses in the multifamily insured, direct loan,
capital advance, and property disposition programs.
(3)Maximizing collections of all funds due HUD, with particular
emphasis on the collection of delinquent debt and Section
236 excess income.
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(4)Enforcing applicable statutes and regulations.
(5)Allocating, administering, and monitoring subsidy-based
programs in a cost-effective manner.
b.HUD Loan/Asset Management staff will work with and monitor
management agents and owners of HUD-insured and HUD-assisted
properties to achieve these goals and assure that all applicable
HUD regulations and program requirements are met.
c.FHEO Area Office staff will monitor compliance with civil rights
statutes, regulations, and civil rights-related program
requirements and provide technical assistance as needed.
1.5
COOPERATION
a.A successful partnership among management agents, owners,
residents, and HUD staff is vital to providing an adequate supply
of well-maintained, financially solvent, affordable housing on a
nondiscriminatory basis. HUD recognizes that while the formal
relationships between the members of this partnership are
contractually controlled, mutual respect for its partners and an
appreciation of their interests are essential for reaching its
goals.
b.Through the procedures it establishes and its interaction with
the other partners, HUD will seek to foster an effective working
relationship among the members of this partnership. HUD also
will look to management agents, residents, and their
representative organizations to take steps to build and
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12/941-4
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___________________________________________________________________________
maintain a working partnership with HUD. In addition to this
commitment to its partners, HUD must also protect its interests
as a mortgage insurer and its responsibilities to the nation's
taxpayers.
1.6
OWNER/MANAGEMENT AGENT RELATIONSHIP
a.While HUD will work with management agents and monitor their
performance, the property owner is ultimately responsible for a
project's compliance with HUD regulations and requirements. HUD
expects that owners will oversee the performance of their
management agents and take steps to correct deficiencies that
occur.
b.HUD will not intercede in the relationship between owners and
management agents except to review the qualifications of a
proposed agent and to assure compliance with applicable HUD
regulations, program requirements, and civil rights statutes and
regulations. The management fee paid to the management agent is
determined solely through negotiations between the owner and the
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agent. HUD will only approve the management fee payable from
project funds.
1.7
HUD/MANAGEMENT AGENT RELATIONSHIP
a.HUD will work with agents to provide quality affordable housing.
Activities of HUD Area Office staff include providing assistance
to help agents meet their responsibilities, monitoring agent
activities for compliance with laws, regulations and the
provisions of subsidy contracts and regulatory agreements, and
working with associations of housing management agents to resolve
conflicts and develop mutually agreeable solutions to problems
that arise.
b.In the spirit of partnership, HUD will exercise care to prevent
undue intervention in the affairs of the management agent when
taking steps to protect its interests and ensure that agents meet
their obligations.
1.8
RESIDENTS' RELATIONSHIP WITH OWNERS, MANAGEMENT AGENTS, AND HUD
Residents and resident associations can be invaluable allies for
owners/agents and should be given the opportunity to voice their views
and concerns in key decisions regarding the project. Toward this end,
HUD encourages owners/agents to go beyond the minimum requirements for
resident involvement and take the following steps:
(1)work to enhance communication between residents and both
on-site and senior management;
(2)facilitate resident access to management;
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___________________________________________________________________________
(3)ensure that proper consideration is given to resident input;
and
(4)emphasize the importance of promptly resolving problems
affecting residents.
1.9
RESOLVING CONFLICTS AND MANAGEMENT ISSUES
a.This handbook provides guidance regarding a range of management
activities and duties. Nonetheless, HUD recognizes that issues
will arise which are not addressed in the following chapters.
When agents encounter issues affecting their ability to manage
their properties effectively, HUD encourages them to work through
local professional associations of management agents to identify
practices that will provide proposed solutions to these issues.
b.HUD expects that its Area Offices will work with agents through
their professional associations to find mutually acceptable
solutions whenever possible. Once agents and their industry
groups have identified a potential response to a problem area,
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they should review the proposed practice with the Director of
Housing in the Area Office. Resolution of management concerns
pertaining to civil rights compliance or enforcement issues will
involve FHEO staff. The Director will assess whether the
proposed practices protect HUD's interests and are consistent
with the agency's basic regulatory requirements, consulting with
Headquarters staff as necessary. Management practices that
satisfy these two conditions may be approved for use by
management agents in that area. The Area Office may place
conditions on the use of proposed practices if necessary to
protect HUD's interests.
1.10 WAIVER OF HANDBOOK DIRECTIVES BY HUD AREA OFFICES
a.Appropriate Uses of Waivers
(1)The procedures presented in this handbook are designed to
ensure that statutory, regulatory, and contractual
obligations imposed on owners of HUD-insured and assisted
housing are fulfilled. While some are specifically required
by statute or regulation, others have been established by
HUD through experience with court cases and problem
resolution to provide the means to meet statutory and
regulatory goals and objectives and to confirm compliance
with program objectives.
(2)HUD Area Offices may find that some of the procedures do not
allow them to take local conditions into consideration or
that alternative procedures would allow them to perform
their duties more effectively.
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(3)If Area Office staff determine that an alternative system or
procedure allows them to perform their duties more
effectively or helps to overcome problems experienced by
owners or agents, the Director of Housing may waive
directives specified in this handbook ONLY if they are not
formally required by statute or regulation.
b.Processing of a Waiver. The Director of Housing must prepare a
written waiver and waiver justification that includes:
(1)the reason for the waiver, including the issues to be
addressed or the problem to be solved;
(2)the procedure that Area Office staff will follow in place of
the directive being waived, including an explanation of how
the alternative procedure will ensure that all statutory,
regulatory, and contractual obligations will be met and
HUD's interests protected;
(3)the circumstances to which the waiver applies (e.g., whether
the waiver applies to all projects in the Area Office
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jurisdiction, projects in certain circumstances or meeting
certain requirements, or only a specific project); and
(4)the circumstances under which the waiver will no longer
apply (e.g., time limits or threshold requirements that must
be maintained).
c.Area Office Counsel Review and Determination
(1)Upon the request of the Director of Housing, the Area Office
Counsel must review the proposed waiver to confirm that:
(a)the waiver is consistent with statutory and regulatory
requirements and that other legally binding
requirements of any applicable regulatory agreement or
housing assistance contract are met; and
(b)HUD's interests are adequately protected.
(2)If the Area Office Counsel finds that the waiver does not
meet the requirements of paragraph (c)(1) above, the
directive may not be waived. The Area Counsel may recommend
revisions to the proposed waiver that would enable it to be
approved.
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___________________________________________________________________________
d.Notice to Affected Parties. Written copies of the waiver and the
procedures being implemented under the waiver must be provided as
follows.
(1)If the waiver applies to all projects or a group of
projects, the Area Office must make copies available to:
(a)owners of HUD-insured and HUD-assisted projects covered
by the waiver under the jurisdiction of the Area
Office;
(b)management agents of these same projects; and
(c)formally established resident associations representing
the residents of these projects.
(2)If the waiver applies to only a single project or a small
number of projects held by a single owner, the Area Office
must send a written copy to the property owner and
management agent specifically stating that the waiver only
applies to the specific project or group of projects. The
waiver does not need to be distributed to other owners and
agents. However, it should be provided to legitimate
resident associations representing residents of the affected
projects upon written request.
e.Notice to HUD Headquarters.
Upon issuing a waiver, the Director
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of Housing must send HUD Headquarters a copy of the written
waiver and guidance for Area Office staff, property owners, and
agents.
1.11 ORGANIZATION OF THIS HANDBOOK
This handbook is organized as follows:
Chapter 2, Approval of Management Agents identifies the approving
authority for each type of project affected and describes the
conditions and procedures for approving management agents.
Chapter 3, Allowable Management Fees from Project Funds outlines
the different types of management fees and sets forth the
procedures for determining the allowable fee amounts to be paid
from project funds.
Chapter 4, Working with Residents discusses the importance of
resident involvement in certain areas of project operations and
describes owner/agent responsibilities for communicating with and
gathering input from project residents.
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___________________________________________________________________________
Chapter 5, Encouraging Training and Employment Opportunities
presents HUD's policy of encouraging owners/agents of HUD-insured
and HUD-assisted properties to inform residents and area
businesses of employment and training opportunities and to
consider hiring them.
Chapter 6, Program Monitoring discusses the monitoring procedures
Loan/Asset Management staff are expected to follow in monitoring
management agent activities to assure that they are in compliance
with all applicable HUD requirements.
Chapter 7, Program Compliance describes the types of violations
that can occur and the actions HUD must take to assure that
compliance is restored.
Chapter 8, Service Coordinators provides owners/agents the
ability to request, and HUD the ability to approve rent increases
for both budget-based and AAF rents where the owner could justify
the expense of a Service Coordinator.
1.12 OTHER REFERENCES
In addition to the two handbooks references in paragraph 1.3 (HUD
Handbooks 4350.1 and 4350.5), this handbook references guidance and
procedures contained in a number of additional HUD documents. Figure
1-3 lists the additional HUD documents used in conjunction with this
handbook.
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___________________________________________________________________________
===========================================================================
Figure 1-3
Additional HUD Reference Materials
___________________________________________________________________________
o
HUD Handbook 4065.1,
Previous Participation Handbook
(Instructions)
o
HUD Handbook 4350.3,
Occupancy Requirements of
Subsidized Multifamily Housin
Programs
o
HUD Handbook 4370.1,
Reviewing Annual and Monthly
Financial Reports
o
HUD Handbook 4370.2,
Financial Accounting Procedures
Handbook
o
HUD Handbook 4350.2,
Loan Management Set-Aside Handbook
o
HUD Handbook 4355.1,
Flexible Subsidy Handbook
o
HUD Handbook 4350.6,
Processing Plans of Action Under
the Low-Income Housing Preser
and Resident Homeownership Ac
1990
o
HUD Handbook 4370.4,
Basic Accounting Desk Reference for
HUD Loan Servicers
o
HUD Handbook 4571.1 REV-2,
Section 202 Direct Loan Program for
Housing for the Elderly or
Handicapped
o
HUD Handbook 8025.1 REV-2,
Implementation of Affirmative Fair
Housing Marketing Requirement
Multifamily Housing
===========================================================================
___________________________________________________________________________
12/941-10
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Directive Number: [Prev Hit][Next Hit]4381.5
4381.5 REV-2
___________________________________________________________________________
CHAPTER TWO
APPROVAL OF MANAGEMENT AGENTS
2.1
INTRODUCTION
This chapter discusses the approval procedures for the selection of
management agents. Under different circumstances, HUD, Administration
for Rural Housing and Economic Development Services (ARHEDS), or a
state/local agency may be responsible for approving the management
agent. The first section of this chapter describes four management
agent types and lists the conditions under which each federal or
state/local agency has approval authority. The second section
discusses the procedures for management agent approval under HUD
authority. The third section discusses the procedures for management
agent approval under ARHEDS and state/local agency authority.
SECTION 1:
2.2
BACKGROUND
AGENT SELECTION AND APPROVAL AUTHORITY
The project owner is responsible for seeking out and selecting a
management agent, but the selection is subject to the approval of the
authorizing agency. This authorizing agency may be HUD, or it may be
ARHEDS or the state/local agency, depending upon the project type and
the mortgage insurance coverage. See Figure 2-1.
===========================================================================
Figure 2-1
Approval Authority by Project Type
===========================================================================
APPROVING
AUTHORITY
PROJECT TYPE
HUD
State/local
agencies
All multifamily projects insured or financed directly by
HUD, and HUD-assisted multifamily projects where HUD is the
Contract Administrator.
Non HUD-insured multifamily housing projects where a state
or local housing agency financed the project or serves as
the Contract Administrator for HUD assistance. HUD Area
Offices perform Previous Participation review to determine
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agent eligibility.
ARHEDS
HUD-assisted multifamily housing financed by ARHEDS. HUD
Area Offices perform Previous Participation review to
determine agent eligibility.
===========================================================================
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a.HUD Approval Authority. HUD has approval authority for all
multifamily HUD-insured and HUD-assisted projects where HUD is
the contract administrator. Furthermore, regardless of approving
agency, HUD will conduct all Previous Participation Clearance
(Form HUD-2530) reviews for all types of projects.
b.State/local housing agency Approval Authority. State/local
agencies have approval authority for all non-HUD insured projects
where the agency financed the project or serves as the subsidy
contract administrator. As part of the approval process, the
state/local agency must submit to HUD a Previous Participation
Certification (Form HUD-2530) for the proposed management agent
as described in paragraph 2-9a. With respect to all other
procedures discussed in this chapter, state and local agencies
may develop their own criteria or elect to use the procedures
established in this Chapter. See Section 3 of this chapter for
additional guidance.
c.ARHEDS Approval Authority. ARHEDS has approval authority for all
ARHEDS 515/8 projects. The ARHEDS Office must submit a Previous
Participation Certification for the proposed management agent for
all ARHEDS 515/8 projects as described in paragraph 2-9a. With
respect to all other procedures discussed in this chapter, ARHEDS
may develop its own criteria or elect to use the procedures
established in this Chapter. See Section 3 of this chapter for
additional guidance.
2.3
TYPES OF MANAGEMENT AGENTS
==============================================================
Figure 2-2
Four Types of Management Agents
==============================================================
1.Owner/Manager
2.Identity of Interest Management Agent
3.Independent Fee Agent
4.Project Administrator
(In this handbook, the term "management agent" applies to all
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four forms of management agents unless a specific distinction
is made because of policy or procedural differences.)
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a.Owner/manager. In this relationship, the owner and the
management agent are the same business entity. This is also
referred to as self-management. A project is not self-managed if
some or all of the same individuals are involved in both the
ownership entity and the management agent but the organizations
are legally different business entities.
For example, if the owner is a limited partnership, and the
general partner of the ownership entity serves as the management
agent, the management agent is not an owner/manager because the
management agent and the mortgagor are different business
entities. Instead, the management agent is an
identity-of-interest management agent (see paragraph 2.3b).
b.Identity-of-interest (IOI) management agent. An IOI relationship
exists when an individual or entity that provides management
services to the project has a relationship with the project owner
that is such that selection of the management agent and
determination of the management fee will not be determined
through an arms-length transaction.
(1)An identity-of-interest relationship exists when:
(a)The owner entity or a general partner of the owner
entity, or
(b)Any officer or director of the owner entity, or
(c)Any person who directly or indirectly controls 10
percent or more of the voting rights, or owns 10
percent or more of the owner entity
is also
(d)An owner, general partner, officer, or director of the
management agent company or its subcontractor, or
(e)A person who directly or indirectly controls 10 percent
or more of the voting rights, or owns 10 percent or
more of the management company or its subcontractor.
(2)"Person," as used above, refers to any individual,
partnership, corporation, or other business entity. Any
ownership, control, or interest held or possessed by a
person's spouse, parent, child, grandchild, or sibling or
other relation by blood or marriage is attributed to that
person for this determination.
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(3)"Subcontractor," as used above, refers to any individual or
company that contracts with the management agent to provide
management services to the project.
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c.Independent fee management agent. A management company or
individual that has no identity-of-interest relationship with the
owner (see paragraph 2.3b) and no financial interest or
involvement in the project, other than earning a fee for
providing management services.
d.Project administrator. An individual who directs the day-to-day
activities of a project designed for elderly, handicapped, or
disabled residents, and who reports to the Board of Directors.
Generally, a project administrator is an employee of the project,
rather than a contractor; has a job description and/or employment
agreement with the project instead of a management agreement; and
receives a salary rather than a management fee.
2.4
PRINCIPLES OF THE REVIEW PROCESS
a.Approval will not be unreasonably withheld. A management agent's
contract is with the project owner. HUD will not unreasonably
withhold approval of the proposed agent for a project.
b.HUD reviews protect the public interest. HUD reviews management
agent performance, experience, and capabilities to protect the
public and its own interests. HUD does not disapprove agents to
penalize program participants who have had past performance
problems.
c.Past Performance and Current Expertise are Considered.
Loan/Asset Management staff must consider both the agent's past
performance and the probability of future compliance.
(1)Area Offices will not issue disapprovals based on past
performance without considering corrective actions taken by
the agent to address previous poor performance.
(2)If there are management problems or open audit findings at
projects the agent currently manages, Area Offices will
consider the following in deciding whether to approve or
disapprove an agent:
(a)whether the agent caused or exacerbated the problem(s);
and
(b)whether the agent has taken, or is taking, all
reasonable steps to correct the problem(s) and address
HUD's concern(s).
d.Experience. Although the Loan/Asset Management staff may
disapprove the agent if the proposed agent clearly lacks the
skills or experience to manage the project, they may not refuse
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to approve an agent merely because the agent has not previously
managed the type of project being proposed (e.g., has
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managed only Elderly or only Family units). Instead, the
Loan/Asset Management staff must assess the agent's strengths in
management systems and procedures that will be essential to
management of the new type of project.
e.Monitoring. HUD will use the documents submitted during the
approval process as the basis for monitoring the agent's
performance and compliance with all conditions agreed to during
the approval process. HUD will require owners to replace agents
that do not adequately perform their management responsibilities.
2.5
STANDARDS FOR MANAGEMENT AGENT APPROVAL
The owner agent is entrusting a management agent with the day-to-day
operation of the project. Therefore, the owner and HUD must be
assured that the project will be managed in a prudent, efficient, and
cost-effective manner, in accordance with applicable laws and HUD
rules, contracts, and procedures. HUD requires that the management
agent:
(1)Be eligible and in good standing with HUD (see paragraphs 2.10
and 2.11);
(2)Demonstrate effective management experience and acceptable
operating procedures (see paragraph 2.12);
(3)Carry adequate fidelity bond coverage (see paragraph 2.14);
(4)Be in compliance with civil rights laws, regulations and
requirements (see paragraph 2.10b); and
Agents should also demonstrate a positive record of communication and
cooperation with legitimate resident associations (see Chapter 4).
2.6
MANAGEMENT AGENT ASSUMPTION OF RESPONSIBILITY
Generally, the management agent may assume management responsibility
only after:
a.The HUD Loan/Asset Management staff has issued a letter approving
the agent proposed by the owner; and
b.The owner and agent have executed and submitted the appropriate
Management Certification form (Form HUD-9839a, b, or c); and
c.The owner and agent have executed a Management Agreement, as
necessary (see paragraph 2.17).
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2.7
MANAGEMENT IN EMERGENCY SITUATIONS
An owner or agent may assume management of a project without prior
Loan/Asset Management staff approval only in an emergency (e.g., an
agent has abandoned a project or HUD has required the owner to
terminate a management agreement).
2.8
SUBSEQUENT AGREEMENTS WITH MANAGEMENT AGENTS
Once HUD has approved a management agent for a particular project, the
owner and agent do not have to seek HUD approval for subsequent
agreements as long as the agent remains at the project, unless HUD has
imposed a Limited Denial of Participation (LDP), Suspension, or
Debarment on the agent. (See paragraph 2.10a)
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SECTION 2:
PROCEDURES FOR HUD APPROVAL OF MANAGEMENT AGENTS
======================================================================
Figure 2-3
Key Steps in Management Agent Approval Process
======================================================================
The project owner selects proposed management entity.
The owner submits required documentation to HUD.
HUD reviews the project owner's submission to assess proposed
agent's:
o
o
o
o
eligibility
past performance
management capacity and experience
fidelity bond coverage.
HUD issues a decision letter.
The owner executes an acceptable Management Agreement with the
agent.
======================================================================
2.9
OWNER/MANAGEMENT ENTITY APPROVAL SUBMISSION REQUIREMENTS
To request approval of the management entity, the owner/agent must
submit the following information to the HUD Area Office at least 60
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days before the date the owner wishes the new agent to assume
responsibility. In the case of emergency replacements of management
agents (see paragraph 2.7) the owner/agent must submit the information
needed for HUD to review and approve the new management agent as soon
as the new agent is identified.
a.Previous Participation Certification. Form HUD-2530 (see
Appendix 1) reports the names of all principals and affiliates of
the management agent and any previous housing projects in which
they have participated. It further certifies that they currently
are eligible to participate in the management of the HUD-insured,
financed or assisted multifamily project.
b.Management Entity Profile. Form HUD-9832 (see Appendix 2)
provides HUD with information on the management entity's
organization and procedures, including treatment of
identity-of-interest relationships. It also shows the types of
projects the agent has managed and what skills or professional
certificates
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the agent's staff hold. It does not provide information on how
the agent has operated individual projects.
(1)If the management entity has already submitted a profile in
the format of the HUD-9832 and the profile is still
accurate, the owner/agent should state in the cover letter
requesting approval of the management entity that an
accurate and up-to-date profile is on file. The cover
letter should also include the date that this document was
submitted. A new submission is not required.
(2)If a previously-submitted profile is not current, or if the
management entity has never submitted a profile that
conforms with the HUD-9832 format, the owner or agent must
submit a new profile of the management entity.
(3)An updated profile must be submitted whenever there are
changes in the management entity's organization or
operations. The owner and/or agent should not wait until
the management fee changes to submit a revised profile.
c.Management Certification. Using Form HUD-9839a, b, or c, as
appropriate, (see Appendix 3) the owner and management agent
together certify that they will comply with HUD requirements and
contract obligations, execute an acceptable management agent
agreement, and that no payments have been made to the owner in
return for awarding the management contract to the agent and such
payments will not be made in the future (projects not managed by
the owner). Owners and agents must fill out the appropriate
Certification Form as follows:
(1)Owner-Managed Projects submit Form HUD-9839a
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(2)Identity-of-Interest Agents submit Form HUD-9839b
(3)Independent Fee Agents submit Form HUD-9839b
(4)Project Administrators submit Form HUD 9839c.
d.Proposed Staffing to be Charged Against the Project Operating
Account. (See paragraph 6.38 for a discussion of which positions
can be charged against the operating account.)
(1)Owners/agents must provide a listing of the staff whose
salaries will be paid from the project's operating account.
The list must include:
(a)Job titles and approximate salary, including hourly
rate;
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(b)A statement of each position's duties, if not obvious
by title and whether the position is full or part-time;
(c)If the employee will be working for more than one
project and/or working part-time for the agent in a
non-supervisory capacity, a statement of how that
person's time and salary will be allocated.
Note:Salaries of management agent supervisory staff not
assigned to the project must be paid from the
management fee. Only full-time, front-line
supervisors may be paid from the project account
(see exceptions to this rule in paragraph
6.39(c)).
(2)Any changes in staffing structure described in the listing
above or additions in staff, which would require submitting
a rent increase request to HUD, should be documented as part
of the budgeted rent increase request process.
e.Resident Complaints and Their Resolution. Owners must provide a
description of the system employed by the agent for resolving
resident complaints and actual examples of the agent's
implementation of the system.
f.Additional Information Required by the HUD Area Office.
Loan/Asset Management staff may require owners to submit
additional information to clarify materials already submitted.
Materials requested may address:
The
(1)Determining the management agent's acceptability.
(2)Monitoring the agent's compliance with HUD requirements.
(3)Resolving project operating problems.
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Figure 2-4 lists the types of additional information that may be
needed to assess the acceptability of a proposed agent.
Loan/Asset Management staff should not require owners to submit
this type of information on a specific form.
2.10 AGENT ELIGIBILITY BASED ON PREVIOUS PARTICIPATION
a.Previous Participation Review. To assess if a proposed agent is
eligible, Loan Management staff must perform a Previous
Participation review to determine if the management agent or any
of its principals are ineligible (24 CFR, Part 200.213).
Loan/Asset Management staff will process Form HUD-2530, the
Previous Participation Certification. (Instructions are in HUD
Handbook 4065.1, Previous Participation Handbook.) If HUD has
taken one or more of the following actions against the proposed
agent or one of its principals, the agent may not be approved to
manage the project.
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Figure 2-4
Information HUD Area Offices Might Need to Assess
the Acceptability of a Proposed Management Agent
===========================================================================
Situation
Type of Information
===========================================================================
1. Area Office is familiar with the
Explanation of how operating and
agent's operating procedures and
oversight procedures for this
agent has satisfactorily managed
project will vary from any others
projects similar to the one
normally used by the agent
under consideration.
___________________________________________________________________________
2. HUD Area Office has had no
To aid in future performance
experience with the agent or is
monitoring, new agents need to
unsure of the agent's ability to
include a narrative explaining how
manage the project.
the agent will handle the
management tasks listed on Fo
HUD-9834, Management Review R
and/or a copy of the agent's
procedures manuals
___________________________________________________________________________
3. Project has significant physical,
Statement of project's problems and
financial, or social problems.
their causes
Review of recent Forms 9834 a
open IG audits on the project
List of actions to be taken t
eliminate those causes and co
the problems (e.g., repairs,
increase, change in operating
procedures)
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Schedules for implementing th
above actions
List of projects with similar
problems or needs that the
agent has previously or is
currently managing
___________________________________________________________________________
4. New project preparing for rent-up.
Description of planned advertising
and marketing efforts. (NOTE
an Affirmative Fair Housing
Marketing Plan is on file for
project, use the information
that plan.)
___________________________________________________________________________
5. Owner/manager proposes to contract
List of functions to be contracted
out certain management functions.
out, as well as a description of
the contractual relationship
the contractor's qualificatio
and experience in those funct
___________________________________________________________________________
6. Project is different from any
List of similar projects in other
other project(s) the agent is
Area Office jurisdictions
currently managing in the Area
Office's jurisdiction.
===========================================================================
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(1)Headquarters has suspended or debarred the management agent
or any of its principals (24 CFR, Part 24.200).
(2)Headquarters has placed the agent or any of its principals
in an ineligible status -- i.e., HUD has disqualified the
agent or principal from participation in HUD programs
because another Federal Agency has imposed a sanction (24
CFR, Part 24, subpart G).
(3)The HUD Area Office in which the project is located has
issued a Limited Denial of Participation (LDP) for the
agent. The HUD Area Office may also restrict or deny an
agent's participation on the basis of an LDP issued by
another Area Office (24 CFR, Part 24, subpart G).
b.FHEO Input. Loan/Asset Management staff should also seek FHEO
input regarding a proposed management agent. FHEO can alert
Loan/Asset Management staff to proposed participation by persons
who have been found, through appropriate procedures, to be in
violation of civil rights laws, regulations, or requirements.
2.11 AGENT ELIGIBILITY IN SECTION 202 PROJECTS
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a.Self Management. The Borrower may self-manage the project
provided that the salaried employee responsible for managing the
project is not an office, board member or authorized agent of the
Sponsor or Borrow and a waiver of Paragraph 11(b) of the
Regulatory Agreement (Form FHA 2466-EH), is obtained from
Headquarters to permit self management. The salary included in
processing the project expenses must be what is reasonable and
customary.
b.Identity of Interest Management Agents.
(1)An identity-of-interest relationship exists if any officer,
director, board member, or authorized agent of any
development team member (consultant, general contractor,
attorney, management agent, seller of the land, etc):
(a)Is also an officer, director, board member, or
authorized agent of any other development team member;
(b)Has any financial interest in any other development
team member's firm or corporation;
(c)Is a business partner of an officer, director, board
member, or authorized agent of any other development
team member;
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(d)Has a family relationship through blood, marriage or
adoption with an officer, director, board member, or
authorized agent of any other development team member;
or
(e)Advances any funds or items of value to the
sponsor/borrower.
(2)The Sponsor or its nonprofit affiliate may be retained by
the Borrower to manage a Section 202 project if no more than
two paid officers, directors, board members, or authorized
agents of the Sponsor also serve as nonvoting board members
of the Borrower corporation. In such cases a waiver of 24
CFR Part 885.5 and Paragraph 11(b) of the Regulatory
Agreement is required.
2.12 REVIEW OF AGENT PERFORMANCE, EXPERIENCE, AND CAPABILITY
Loan/Asset Management staff must review the qualifications of the
proposed agent to assess the agent's ability to manage the project
effectively and in compliance with HUD requirements. Loan/Asset
Management staff must consider each of the factors below in reviewing
an agent's qualifications. Paragraph 2.13 provides guidance about how
to conduct the review and document the results.
a.Past and Current Management
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(1)Loan/Asset Management staff must review the proposed agent's
past experience and current performance with respect to the
following performance indicators:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Billing
Controlling operating expenses
Vacancy rates
Resident turnover
Rent collection and accounts receivable
Physical security
Physical condition and maintenance
Resident relations.
Figure 2-5 provides guidance for determining whether changes
are needed in the Management Agent's operating procedures.
(2)If problems are identified with any of these indicators,
Loan/Asset Management staff must assess whether the agent
has adequately improved its procedures to prevent the
recurrence of such problems or whether management
initiatives proposed by the agent and owner are
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Figure 2-5
Determining Whether Changes Are Needed
in the Management Agent's Operating Procedures
===========================================================================
If:
Assess Procedures for:
===========================================================================
Billings: The agent has consistently
submitted late or incorrect HUD-50059
certifications or subsidy billings.
Training occupancy staff and
reviewing the occupancy staff's
work. (The agent should have
described these procedures
the Management Entity Profi
___________________________________________________________________________
Operating expenses: Operating
Comparing prices taking advantage
expenses are higher than those of
of discounts, and bulk
comparable projects (i.e., assisted
purchasing.
projects are compared to other
assisted projects and unassisted
Preparing budgets and monitoring
projects are compared to
actual expenses against budgeted
other unassisted projects).
amounts.
___________________________________________________________________________
Vacancy rates: Vacancy rates are
Marketing and preparing units for
higher than those of comparable
occupancy following move-out.
projects.
___________________________________________________________________________
Resident Turnover: Turnover rates
Screening residents.
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have been higher than those of
comparable projects.
Responding to resident
complaints and repair reque
Project maintenance.
___________________________________________________________________________
Rent collection and accounts
Screening residents for payment
receivables: Accounts receivables
history.
have been high.
Collecting rents in a timel
manner.
Pursuing delinquent account
___________________________________________________________________________
Physical security: Project has
Providing security services.
frequent break-ins, vandalism,
or drug problems.
___________________________________________________________________________
Physical condition/maintenance:
Compliance with contractual terms
Project has critical and continuous
and HUD-required corrections.
physical condition/maintenance
problems attributed to the
Performance evaluations and
Management Agent.
responsiveness to HUD-required
actions.
Project is not well maintained.
Responding to resident conc
___________________________________________________________________________
Resident Relations: Verified
evidence that the agent has shown
a pattern of harassment of residents
or legitimate resident organizations.
Recognition of independent,
representative resident
associations; communication with
resident associations; and
distribution of information
residents' rights and
responsibilities.
===========================================================================
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sufficient to correct the problems and their causes. Figure 2-6
presents two sample situations of agents with past performance
problems and how to assess the probability of future compliance.
b.Ability to Manage Troubled Projects. If the project the agent
will manage has physical, financial or social problems that
require special expertise or skills to manage effectively,
Loan/Asset Management staff must determine whether the agent has
the necessary skills and expertise to manage the project and
whether the agent's proposed remedies are appropriate. Agents
proposed for these projects should have prior experience
successfully addressing similar issues.
c.Management Qualifications.
The proposed management agent should
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have at least one person who establishes the agent's policies and
supervises project operations with the following qualifications:
(1)A professional designation in housing management from a
national organization that provides such accreditation or
(2)A minimum of two years experience in directing and
overseeing the management of multifamily projects serving a
similar resident clientele.
The Loan/Asset Management staff may accept a proposed agent
without the experience requirements listed in this subparagraph
if the agent is satisfactorily managing other HUD-insured or
subsidized projects.
d.Past Performance with IOI Contractors. If the agent purchases
goods or services from identity-of-interest companies and has
previously managed HUD-insured and/or subsidized projects,
Loan/Asset Management staff must assess the agent's past use of
such companies and whether this use resulted in costs to the
project that exceed the prices paid in arms-length transactions.
The review should especially consider:
(1)Goods and services purchased through any "pass-through"
arrangements described in Item 11b of the Management Entity
Profile.
(2)Evidence that the agent has compared prices and that the use
of any identity-of-interest companies or pass-through
arrangements has been more advantageous to the project than
purchasing through arms-length transactions would have been.
(3)Evidence that the management agent followed the contracting
and hiring guidelines in Chapter 5 and Paragraph 6.49.
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Figure 2-6
Assessing an Agent's Past Performance and Probability of Future Compliance
===========================================================================
SAMPLE SITUATIONS
Situation 1: The agent has seriously or frequently misused project assets
or violated HUD requirements, but has corrected the violations.
The Area Office should consider: Will the agent repeat these
violations? If the Area Office concludes that the answer is no, it
should approve the proposed agent. It might reach this conclusion if:
A.The violations were caused by weaknesses in the agent's operating
procedures and the agent has since implemented acceptable
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procedures.
or
B.The violations were caused by persons who are no longer
associated with the management agent.
If there is reason to believe that the agent will repeat these
violations, then the Area Office should impose a Limited Denial of
Participation (LDP) on the agent.
Situation 2: In the past, the agent seriously or frequently violated HUD
requirements and did not properly correct the violations.
The Area Office may still approve the agent on a conditional basis if
the agent and the Area Office have agreed on actions, and a schedule
for implementing them, that will correct the violations. Before
making the conditional approval, the Area Office should determine that
the agent has made satisfactory progress toward correcting the
violations -- in short, that the agent is making a good-faith effort
to restore and ensure compliance with HUD requirements.
Under a conditional approval, the management agreement between the
owner and the agent must:
A.Incorporate or refer to the schedule for completing the
corrective actions,
and
B.Contain a clause giving HUD the right to request termination of
the management agreement at any time if the agent is not making
satisfactory progress toward completing those corrections.
The Area Office will have to incorporate monitoring of that progress
into its review process.
If the Area Office and the agent do not agree on actions and a
schedule for implementation, or do reach an agreement but the Area
Office determines that the agent has not made satisfactory progress in
correcting the violations the Area Office will impose a LDP until it
determines that the agreement is in place and the agent is making
satisfactory progress.
In both situations: If the problems on which the LDP are based are serious
enough to warrant a denial of participation nationally and/or in other
programs, the Area Office will request Headquarter's Office of Multifamily
Housing to initiate action for debarment or suspension.
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2.13 CONDUCTING REVIEWS OF AGENT QUALIFICATIONS
a.Timing of decision. The Loan/Asset Management staff should
normally issue a decision on the acceptability of a proposed
management agent within 45 days of receiving all the materials
listed in paragraph 2.9, unless processing delays in receiving
the HUD-2530 clearance preclude completing the review within this
time period.
b.Information Sources for the Review. Loan/Asset Management staff
have a variety of sources of information about the proposed
management agent.
(1)Management Entity Profile. Loan/Asset Management staff can
use the information listed on the form to solicit opinions
from:
(a)Other Area Offices that have worked with this agent, as
noted in Section 19a of the Management Entity Profile.
(b)ARHEDS offices and State/local agencies that have
worked with this agent, as noted in Section 19c of the
Management Entity Profile.
For ARHEDS-financed projects insured by HUD, Loan/Asset
Management staff should inquire with the ARHEDS offices
shown on Schedule A of Form HUD-2530.
(2)Audit Reports. Open audit reports and information about IG
or GAO audits in progress related to the project, the
management agent, or individual principals can be obtained
from the Area Office Inspector General for Audit (IGA).
Upon request, the IGA will provide:
(1)Report numbers, titles, and dates of audit reports;
(2)The nature of any findings; and
(3)Whether the findings are open or closed.
to determine
project when
deficiencies
authority to
The Loan/Asset Management staff should review these reports
whether the proposed agent was managing the
the audit took place, and whether the
cited in the audit were within the agent's
correct.
(3)Performance Evaluations for the proposed agent and projects
which the agent has managed or is currently managing if
those projects are under Flexible Subsidy contracts or
Workout Agreements.
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(4)Monthly and Annual Financial Statements of the Project,
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including the Independent Public Auditor (IPA) Internal
Controls Questionnaire.
(5)Additional Documentation. Additional documentation that the
HUD Loan/Asset Management staff may review includes:
(a)HUD/mortgagee on-site review reports;
(b)Results of Form HUD-50059 and voucher reviews;
(c)Correspondence;
(d)Resident complaint files; and
(e)Previous management reviews.
c.Documentation of Review Results. Loan/Asset Management staff
must develop a format to document their review of management
agents. The review documentation must provide evidence for
Headquarters and for the owner and proposed agents that
Loan/Asset Management staff has reasonably considered all
information pertinent to its decision.
2.14 BONDING REQUIREMENTS FOR AGENTS
Loan/Asset Management staff must also determine whether the agent has
adequate bonding. The Loan/Asset Management staff may not waive these
minimum fidelity bond requirements. To provide a basic level of
protection for the multifamily project assets:
a.The management agent must certify in the Management Certification
that it carries fidelity bond or employee dishonesty coverage
for:
(1)All principals of the management entity, and
(2)All persons who participate directly or indirectly in the
management and maintenance of the project and its assets,
accounts, and records.
b.The fidelity bond or coverage must name the mortgagee and HUD as
additional loss payees.
c.Coverage may be through one or more bonds, and one bond may cover
more than one project, including projects whose mortgages are not
insured or held by HUD. The agent's principals and supervisory
and front-line staff may be covered under the same bond.
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d.Each project
gross potential income
than one project, this
with the highest gross
must be insured for at least the value of two months
for the project. If a bond covers more
minimum must be computed using the project
potential income.
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______________________________________________________________
EXAMPLE: If an agent seeks to manage three projects with
monthly gross income of $50,000, $75,000, and $150,000,
the agent may obtain one bond with a value of $300,000
-- two months' income from the $150,000 project -- to cover
all three projects.
______________________________________________________________
2.15 APPROVAL OF THE PROPOSED MANAGEMENT AGENT
a.Grounds for Approval.
agent when:
HUD will approve a proposed management
(1)HUD Headquarters approves the Form HUD-2530 clearance;
(2)Loan/Asset Management staff determines that the agent has
the capacity to manage the project effectively and in
accordance with HUD requirements; and
(3)Loan/Asset Management staff determine that the agent has
adequate fidelity bond coverage.
b.Conditional Approvals. All issues raised during the review that
may negatively impact the Loan/Asset Management staff's decision
should be discussed with the owner and agent, as necessary and
appropriate. If the Loan/Asset Management staff feels that the
agent is acceptable but concludes that the agent's proposed
procedures are weak in particular areas, it may make a
conditional approval of the proposed management agent by:
(1)Sending the owner a letter describing the specific
weaknesses identified and discussing these weaknesses with
the owner and/or agent as appropriate; and
(2)Reaching an agreement with the owner and agent as to how the
agent will change its procedures. This agreement should
indicate the specific steps the owner/agent will have to
take to remedy the identified weaknesses and establish a
date by which HUD will reassess the agent's acceptability.
The agreement should be included in the letter approving the
management agent.
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The second sample situation in Figure 2-6 illustrates the use of
a conditional approval.
c.Scheduling Initial Management Reviews of Less Experienced Agents.
When issuing approvals for agents who have not previously managed
HUD projects or who do not have experience with the particular
type of project under consideration, Loan/Asset Management staff
should schedule a comprehensive management review to be performed
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within 12 months of the date the agent assumes responsibility for
the project, unless otherwise specified by program requirements.
2.16 DISAPPROVAL OF THE PROPOSED MANAGEMENT AGENT
a.Previous Participation Rejection.
(1)If Headquarter's Participation Control Officer/Review
Committee decides to deny or withhold approval of an agent's
participation in accordance with 24 CFR, Parts 200.226-230,
it will notify the owner and agent directly in writing and
send a copy to the Loan/Asset Management staff.
(2)The Loan/Asset Management staff must then advise the owner
that the project may not enter into an agreement, pay, or
become obligated to pay management fees to the proposed
agent and of the owner's right to appeal this decision.
b.Owner Response.
The owner must:
(1)Propose another management agent, or
(2)Await resolution of any appeal the agent files under 24 CFR,
Part 200.241 and make interim management arrangements
acceptable to the Loan/Asset Management staff.
2.17 MANAGEMENT AGREEMENT REQUIREMENTS
a.Applicability. Projects with identity-of-interest agents or
independent fee agents must execute a Management Agreement. An
Agreement is recommended, but not required, for owner-managed
projects or projects managed by a project administrator.
b.Required contents. The owner and agent may negotiate their own
form of agreement provided that it contains language to meet the
following requirements:
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(1)Scope of service. All management agreements must describe
the services the agent is responsible for performing and for
which the agent will be paid management fees.
(2)Required clauses.
All agreements must provide that:
(a)Management fees will be computed and paid according to
HUD requirements.
(b)HUD may require the owner to terminate the agreement:
(i)Immediately, in the event a default under the
Mortgage, Note, Regulatory Agreement, or Subsidy
Contract attributable to the management agent
occurs;
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(ii)Upon 30 days written notice, for failure to comply
with the provisions of the Management
Certification or other good cause; or
(iii)
When HUD takes over as MIP.
NOTE: As a good business practice, the management
agreement should always give the owner the ability to
terminate the contract for cause, with notice.
(c)If HUD terminates the agreement, the owner will
promptly make arrangements for providing management
satisfactory to HUD.
(d)HUD's rights and requirements will prevail in the event
the management agreement conflicts with them.
(e)The management agent will turn over to the owner all of
the project's cash, trust accounts, investments, and
records immediately, but in no event more than 30 days
after the date the management agreement is terminated.
(3)Prohibited "hold harmless" clause. Management Agreements
cannot exempt the agent from all liability for damages and
injuries.
A sample prohibited clause would read:
"The owner agrees to hold and save agent harmless from
dangers of injuries to persons or property by reason of any
cause whatsoever, either in or about the premises or
elsewhere, when agent is carrying out
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the provisions of this agreement, or acting under the
express or implied direction of the owner."
To make this clause acceptable:
(a)Delete the underlined words, and
(b)Add "unless such injuries resulted from the agent's
gross negligence or willful misconduct" after
"direction of the owner".
c.Length/term of the Agreement. The length/term of the Agreement
is negotiated between the owner and the management agent. The
Loan/Asset Management staff may impose a maximum term on the
Management Agreement if the Loan/Asset Management staff approved
the agent on a conditional basis.
(1)The contract may provide for a fixed term or an open-ended
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term (e.g., automatically renewable or "to remain in effect
until cancelled by HUD, the owner, or the agent").
(2)If the length/term of the Agreement changes, the owner/agent
must submit a new Management Certification.
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SECTION 3:
REVIEW PROCEDURES FOR MANAGEMENT ENTITIES SUBJECT TO
ARHEDS OR STATE/LOCAL AGENCY APPROVAL
2.18 GENERAL
a.Management agents for HUD-assisted properties which are financed
by state/local agencies or through the ARHEDS Section 515 program
are approved by the financing agency. (See Figure 2-1 for a
complete description of approval authority by project type.)
b.State/local agencies and the ARHEDS may approve a proposed agent
only if:
(1)HUD Headquarters has approved the HUD-2530 clearance; and
(2)The state/local agency or ARHEDS is satisfied that the agent
has the capacity to manage the project.
c.Apart from the Form HUD-2530 review process described above,
state/local agencies and ARHEDS may develop their own policies
and procedures for reviewing and approving management agents.
They may elect to use HUD forms and procedures or design
different ones.
d.Monitoring records should be kept in accordance with the Contract
Administrator's Handbook (HUD Handbook 4350.5).
2.19 STATE/LOCAL AGENCY AND ARHEDS PROCESSING PROCEDURES
a.Upon receiving the Form HUD-2530 and any other documentation
required by the agency, the state/local agency or ARHEDS must
assess the acceptability of the proposed agent.
(1)If the state/local agency or ARHEDS staff know that HUD has
taken any of the actions described in paragraph 2.10a
against the proposed agent or one of its principals, it
should advise the management agent that HUD will not approve
its participation.
(2)The state/local agency or ARHEDS has full authority to
disapprove a proposed management agent without processing
and submitting the Form HUD-2530 to HUD if there is good
reason for doing so.
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b.If the agent is acceptable to the state/local agency or ARHEDS,
the agency should send to the Loan/Asset Management staff:
(1)The original Form HUD-2530 with a letter stating that the
Form HUD-2530 is being submitted in connection with the
review of a proposed management agent; and
(2)If the agency is aware of involvement by the owner or any of
its principals with a project that did not comply with HUD's
regulations or administrative procedures, information about:
(a)Names of involved principal(s);
(b)The nature of the non-compliance;
(c)Whether the principal was involved with the project
when the non-compliance occurred;
(d)How the principal was involved; and
(e)Whether, how, and when the non-compliance was resolved.
c.When HUD returns the Form HUD-2530, the Form will indicate
whether HUD has cleared the agent's previous participation in HUD
programs. If HUD disapproves or withholds clearance, the
state/local agency or ARHEDS should require the owner to propose
a new agent.
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2-2312/94
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
4381.5 REV-2
___________________________________________________________________________
CHAPTER THREE
ALLOWABLE MANAGEMENT FEES FROM PROJECT FUNDS
3.1
GENERAL
Management agents operating HUD-insured and HUD-assisted properties
are paid a management fee for their services. Management fees may be
paid only to the person or entity approved by HUD to manage the
project. Management agents must cover the costs of supervising and
overseeing project operations out of the fee they receive.
Owners determine the actual amount of fee to be paid to the management
agent. As provided for in project Regulatory Agreements and rental
assistance contracts, for certain projects HUD determines the amount
of fee that may reasonably be paid out of project funds.
_______________________________________________________________
NOTE: Unless otherwise specified, the term "management fee"
in this chapter references to the management fee payable out of
project funds.
_______________________________________________________________
This chapter addresses reviews of management fees requiring HUD
approval.
Section 1: Management Fees and Review Requirements discusses the
types of fees that are allowed and summarizes review
requirements.
Section 2: Procedures for Performing Management Fee Reviews
covers procedural steps in the review process.
Section 3: Assessing Reasonableness of Management Fees provides
guidance on the technical review of proposed fees.
Section 4: Special Provisions for Fees Approved On or Before
August 1, 1986 highlights special rules for certain "held
harmless" projects.
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SECTION 1:
3.2
MANAGEMENT FEES AND REVIEW REQUIREMENTS
TYPES OF MANAGEMENT FEES
a.There are five major types of fees that, when added together,
make up the overall management fee for a project. The five types
of fees are:
(1)Residential income fee;
(2)Commercial income fee;
(3)Miscellaneous income fee;
(4)Special fees; and
(5)Add-on fees.
b.Fees derived from project income (residential, commercial, and
miscellaneous) must be quoted and calculated as a percentage of
the amount of income collected by the agent. Multiplying the fee
percentage by the income collected gives the actual amount of fee
paid to the agent. This requirement serves two purposes.
(1)It gives the agent an incentive to maximize collections; and
(2)It automatically increases the agent's potential fee yield
as project rents increase. These increases help offset
increases in the agent's cost due to inflation.
c.Both special fees and add-on fees are quoted as dollar per unit
amounts because they relate to project conditions that are not a
function of project rents or income.
3.3
RESIDENTIAL INCOME FEE
HUD specifies the kinds of income that may be treated as residential
income when determining the residential income fee. In general,
income received from the rental of housing units may be counted as
residential income. Figure 3-1 indicates the types of income that may
and may not be included in the residential income base amount used
when calculating this fee.
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Figure 3-1
Determining Residential Income
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DO COUNT
DO NOT COUNT
1.
Apartment rents.
1.
Section 8 Special Claims:
2.
Cooperative carrying charges.
b) vacancy loss
3.
Rent Supplement payments.
d) resident damages.
4.
RAP payments.
5.
Section 8 regular tenant
assistance payments (including
utility reimbursement payments
made to residents whose Total
Tenant Payment is less
than the utility allowance).
a) unpaid rents
c) debt service
2.
Excess rents and charges for
Section 236 when the
paid is greater than the unit
Basic Rent. (This condition
applies regardless of whether
the excess income is due to
HUD.)
3.
Section 236 Interest Red
Payments (IRPs) made
mortgagees on Section
projects.
===========================================================================
3.4
COMMERCIAL INCOME FEE
Most sources of commercial income may be counted when establishing the
income base for this fee. Figure 3-2 shows the types of income that
may be counted as commercial income.
===========================================================================
Figure 3-2
Determining Commercial Income
===========================================================================
DO COUNT
1.
Rent receipts from commercial
space.
2.
Fees for parking spaces or
garages.
DO NOT COUNT
1.
Charges for services paid
directly to an outside vendor
or contractor.
3.
Charges collected by the
agent for additional
services not included in
project rents.
===========================================================================
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3.5
MISCELLANEOUS INCOME FEE
a.HUD will allow management agents to earn fees only on selected
types of miscellaneous income. Figure 3-3 lists the types of
income that may and may not be counted in the miscellaneous
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income base amount.
===========================================================================
Figure 3-3
Determining Miscellaneous Income
===========================================================================
DO COUNT
DO NOT COUNT
1.
Laundry and concession income
(e.g., coin machines, car
wash, cable TV, etc.).
1.
Interest earned on invested
security deposits, reserves,
or other project funds.
2.
Charges collected from
residents, such as fees for
damages, bad checks, and
late payments.
2.
Section 8 Special Claims for
unpaid rent, vacancy loss,
debt service, or resident
damages.
3.
Proceeds from Loss of Rents
Insurance policies.
3.
Flexible Subsidy Funds,
except as provided for in the
MIO plan.
4.
Income from furniture,
equipment, and other charges
shown on the HUD-approved
Rent Schedule (Form HUD-92458).
4.
Refunds from property tax or
utility rate appeals.
5.
Proceeds from property damage
or liability insuran
policies.
6.
Recovered legal fees and
5.
Pet fees - for clean-up, etc.
(not pet deposits).
court costs.
7.
Replacement reserve and
residual receipts
reimbursements to th
project.
===========================================================================
3.6
SPECIAL FEES
a.Use of Special Fees. In addition to the percentage-based fees
described above, owners may agree to pay special management fees
if a project has special needs or problems. Proposing special
fees (rather than adjusting the fee percentage) is an appropriate
and cost effective way to address specific project conditions
that should be temporary in nature.
b.Circumstances When Special Fees Are Allowed. Agents may earn
special management fees only if all six conditions listed below
are met.
(1)The agent did not cause the problem the fee is designed to
address.
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___________________________________________________________________________
(2)The fee is tied to the correction of specific problems or
the accomplishment of specific tasks. Examples of such
tasks include:
(a)Renting-up the project (unless compensation for this is
provided from a supplemental management fund);
(b)Obtaining or renewing a lease for commercial space at
the project;
(c)Completing significant rehabilitation work or utility
conversion;
(d)Reducing vacancies or improving rent collections;
(e)Reducing a specific excessive expense (e.g., utility
costs or property taxes); and
(f)Processing membership transfers at cooperatives.
____________________________________________________________
NOTE: Normally, Loan/Asset Management staff should not
approve incentive fees tied solely to an agent's
performance in increasing net income, or decreasing total
expenses. Such fees might encourage agents to forego
necessary maintenance or expenditures.
____________________________________________________________
(3)The fee is structured so that it is payable only if the
agent completes the required actions or obtains the required
results.
____________________________________________________________
EXAMPLE: A new agent might receive a special fee for
satisfactorily correcting all items of deferred maintenance
by a specific date.
____________________________________________________________
(4)The fee does not include services that are covered by
residential, commercial, or miscellaneous management fees,
or by other sources of compensation.
____________________________________________________________
EXAMPLE: An agent may not collect a special management
fee for supervising rehabilitation work if those services are
being paid for through BSPRA (Builders/Sponsors Profit and
Risk Allowance), a construction oversight fee.
____________________________________________________________
(5)The fee is reasonably related to the time, effort, and
expertise required of the agent.
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(6)The fee is paid only for a limited period of time.
length of this period should be no longer than the time
required to resolve a specific problem or complete a certain
task.
The
c.Bookkeeping Expenses Are Treated as a Project Cost. The cost of
bookkeeping services for a project performed as part of a
centralized bookkeeping system are treated as a project cost and
should not treated as a special fee. Such expenses are paid out
of project funds based on actual costs attributable to the
project. Further guidance on the treatment of such costs and the
amount payable out of project funds is provided in Chapter Six,
paragraph 6.37.
3.7
ADD-ON FEES
NOTE: ONLY AFTER computation of the permitted percentages for
residential, commercial and miscellaneous income have been determined
and approved by HUD, may add-on fees be considered. In approving the
permissible percentage fees, the PUPM Yield must fit within the range
established by the Area Office. Although the total yield including
the add-on fees may exceed the range, add-on fees may not be used to
increase this range and in turn increase the percentage fee.
a.Add-on fees are a flat dollar per unit fee paid to agents
managing projects with long-term project
characteristics/conditions that require additional management
effort beyond than the activities covered by the residential
management fee. For example, scattered site projects will often
will often require greater management effort than single site
projects.
(1)HUD Area Offices will establish a schedule of project
characteristics/conditions that warrant add-on fees and a
flat fee amount (PUPM) for each characteristic/condition
(see paragraph 3.21). Area Offices will make this schedule
available to owners/agents of projects within its
jurisdiction.
(2)Figure 3-4 list examples of project characteristics/
conditions that may warrant the use of add-on fees.
(3)For short-term or temporary project conditions,
owners/agents should seek special management fees (see
paragraph 3.6). Area Offices will not approve add-on fees
for temporary projects conditions.
(4)HUD Area Offices must not establish add-on fees for project
characteristics/conditions that are already covered in its
residential management fee range. For example, an add-on
fee for a subsidy contract would not be appropriate if a
significant number of the projects used to establish the
residential fee range were Section 8 New Construction or
Substantial Rehabilitation projects.
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12/943-6
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___________________________________________________________________________
===========================================================================
Figure 3-4
Examples of Long-Term Project Conditions That Could Justify Add-On Fees
___________________________________________________________________________
A.High Density Projects: A high percentage of units with three or more
bedrooms increases the population density and can increase the cost of
managing a project.
B.Location:
1.Remote location.
o
o
A higher fee may be justified if:
No local management is available and agent will incur
unusually high travel costs.
Special outreach is required to attract residents.
2.
Scattered site. The agent may be paid additional compensation
for the extra travel expenses incurred in overseeing several sites.
3.
Adverse neighborhood conditions (e.g., high incidence of crime or
vandalism, or large concentration of deteriorated or substandard
housing). These characteristics tend to increase maintenance and
repair problems resident turnover, vacancies, and rent collection
losses.
NOTE: While higher fees may be allowed for these conditions. Area
Offices should not allow higher fees for collection losses caused by
these conditions if the owner and agent used a collections base of
less than 95 percent to estimate the residential management fee yield.
C.Type of ownership: Because owners of nonprofit projects may be less
experienced in property management or because cooperative projects
have additional legal and organizational responsibilities, management
of these projects may require extra knowledge and effort on the part
of the agent.
EXAMPLE: To manage a cooperative, the agent must understand State and
local cooperative laws, the cooperative subscription process, how
homeownership works in cooperative housing, and other requirements
specific to cooperative housing.
D.Subsidy mix:
A higher fee may be appropriate if:
1.A project has more than one type of subsidy.
AND
2.The combination of subsidies to the project requires more
administrative oversight than the projects that were used to
establish the residential fee range.
EXAMPLE A:
An agent who manages a 236 project with a Rent Supplement,
RAP, or Section 8 contract may receive a higher fee than an agent who
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manages an otherwise comparable 236 project with no tenant-based
subsidy.
EXAMPLE B: An agent who manages a 236 project with both Rent
Supplement and Section 8 may receive a higher fee than an agent who
manages an otherwise comparable 236 project with only one tenant-based
subsidy. (NOTE: This does not apply if the project has both RAP and
Section 8. Since the rules for these two programs are so similar,
having both subsidies does not require significantly more work from
the agent.)
===========================================================================
___________________________________________________________________________
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4381.5 REV-2
___________________________________________________________________________
a.Owner/Agent Requests for Add-on Fees. Owners/agents requesting
add-on fees for a project must submit a new Management
Certification (Form HUD-9839-A, or B) and list the requested fees
under the Special Fees section of Attachment 1 of this form. In
completing Attachment 1 of the Management Certification,
owners/agents must clearly distinguish any add-on fees requested
from any special fees listed on the form. The owner may request
any dollar amount for a specific add-on so long as the amount
does not exceed the dollar limit established for that add-on fee
by the appropriated Area Office.
3.8
PROJECTS SUBJECT TO HUD MANAGEMENT FEE REVIEWS
a.General. Whether a project is subject to a management fee review
depends upon several key factors:
(1)Type of Ownership (i.e., whether the ownership is profit
motivated, limited dividend, or nonprofit.)
(2)Management Agent: (e.g., whether the agent has previously
received approval from the Area Office or has outstanding
findings of noncompliance.)
(3)Project Conditions: (i.e., whether the project's financial,
physical, or administrative problems suggest the need for a
review.)
Projects subject to review may be reviewed either up-front
(before the project is obligated to pay the management agent) or
after-the-fact (in conjunction with other servicing activities).
Figure 3-5 summarizes the requirements and timing of management
fee reviews.
b.Types of Ownership
(1)Profit-Motivated Project. A profit-motivated (PM) project
is one in which the ownership entity is legally allowed to
distributed surplus cash to its members.
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(2)Limited Distribution Project. A limited distribution (LD)
project is one in which distributions of surplus cash to the
ownership are limited and certain conditions must be met
before the project's surplus cash can be distributed.
(3)Nonprofit Project. A nonprofit project is one in which the
ownership entity generally does not receive distributions of
surplus cash from the property. Surplus funds from the
operation of these projects are used for project-related
improvements or services.
___________________________________________________________________________
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___________________________________________________________________________
Figure 3-5
Timing of Area Office Review of Management Fees
===========================================================================
UP-FRONT REVIEW
===========================================================================
All projects:
1. Whose agents have not received previous approval from the HUD Area
Office in the jurisdiction.
2. In default under a mortgage or other approved payment program.
3. Where the Director of Housing Management has determined that an
up-front review is needed to protect HUD's interests. This
determination should be made if a project exhibits any of the
following conditions:
a) Poor financial position with a need to control expenses. Evidence
that this condition is present includes:
-- recent defaults
-- delinquent mortgage payments
-- marginal or negative cash throw-off (i.e., income less than or
only slightly more than operating expenses, debt service, and
reserve requirements)
-- high vacancy/turnover rates
-- excessive accounts receivable/payable.
b) Serious noncompliance with HUD financial requirements, including
outstanding diversions and/or significantly overdue financial
reports.
c) Poor physical condition, including significant deferred maintenance.
d) Serious outstanding findings from IG or GAO audits.
e) Agent has not made satisfactory progress toward correcting
problems found in project reviews (HUD, IPA, administrator, or
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mortgagee).
f) A persistent pattern of poor communication or relationships with
tenants or tenant associations and/or a persistent pattern of
failure to address tenant service requests or complaints.
===========================================================================
AFTER-THE-FACT REVIEW
NO REVIEW
===========================================================================
Projects not subject to up-front
reviews that fall into any of the
following categories.
1. Limited distribution and
nonprofit projects (regardless
of how project rents are set).
2. Profit-motivated Section 8
projects subject to budgeted
rent reviews.
3. Subsidized cooperative
projects.
No fee review is performed for the
following types of projects, unless
one or more of the conditions
necessitating an upexists.
1. Profit-motivated projects that
do not have rental assista
contracts.
2. Profit-motivated Section 8
projects that have rents s
through use of the Annual
Adjustment Factor (AAF).
3. Profit-motivated Preservat
projects that use the Oper
Cost Adjustment Factor
(OCAF) to determine rent
adjustments.
4. Unsubsidized cooperatives
and Section 234(d)
condominium projects.
===========================================================================
___________________________________________________________________________
3-912/94
4381.5 REV-2
___________________________________________________________________________
In certain cases nonprofit entities, such as those receiving
Title II or Title VI Preservation funding, are allowed to
receive distributions. Such projects retain their nonprofit
designation even though the organization is allowed to
receive distributions of project funds. For detailed
guidance regarding Preservation projects, see Processing
Plans of Action under the Low-Income Housing Preservation
and Resident Homeownership Act of 1990, HUD Handbook 4350.6.
(4)Determining the type of ownership. The applicable
Regulatory Agreement or rental assistance contract for the
project will indicate the extent to which surplus cash can
or cannot be distributed to the owner.
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____________________________________________________________
NOTE: Generally speaking, Section 8 projects issued a
notice of selection after November 5, 1979 (for New
Construction) and February 20, 1980 (for Substantial
Rehabilitation) should be LD projects.
____________________________________________________________
c.Projects Not Subject to HUD Management Fee Reviews. Owners of
the following types of projects do not have to obtain HUD
approval of the management fee payable out of project funds
unless the project is in default under a mortgage or other
approved payment program or HUD determines a review is necessary
to protect its interests. See Figure 3-5 for examples of project
conditions that might trigger the requirement for a review.
(1)PM projects that do not have rental assistance contracts.
(2)PM projects that hold Section 8 contracts and use the Annual
Adjustment Factor (AAF) to compute rental adjustments for
Section 8 units.
NOTE: If owners of this type of project request a special
rent increase or have their rents set through a budget, HUD
will process the rent increase request using the lower of:
(a)The project's actual management fee (as shown on the
current management certification); or
(b)The maximum fee that would be allowed under this
chapter's procedures, if the fee were subject to HUD
review.
(3)PM Preservation projects that use the Operating Cost
Adjustment Factor (OCAF) to determine rent adjustments.
(4)Unsubsidized cooperatives and Section 234(d) condominium
projects.
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___________________________________________________________________________
3.9
APPLICABLE MANAGEMENT FEE FOR RENT INCREASE REQUESTS
a.Budget-based Rent Increases. For projects where rents are set
through an expense-based rent formula, HUD will use the approved
management fee percentage in processing all rent increase
requests. The approved fee percentage is used regardless of the
fee yield provided by this percentage fee, except in cases where
the provisions of paragraphs (b) or (c) below apply.
____________________________________________________________
EXAMPLE: Last year HUD approved a management fee of five
percent for Property X. At that time, this management fee
provided a potential fee yield of $25 per unit per month
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(PUPM). This year the owner is applying for a budgeted
rent increase.
In processing this request, Loan Management staff will use the
management fee of five percent. If the five percent fee would
result in a potential fee yield of $28 PUPM and this amount
exceeded the upper limit of the reasonableness range of $26
PUPM for that area (see Section 3), Loan Management staff
would use the approved fee percentage and no cap would be
placed on the fee yield.
____________________________________________________________
b.Capped Fee Percentage for Projects Receiving Significant Rent
Increases. When a project will receive a rent increase equal to
20 percent or more of its current rent potential (e.g., as a
result of large increases in project costs, capital improvement
activities, or preservation incentives), the management fee
percentage must be adjusted. Figure 3-6 illustrates when an
owner request for a rent increase affects the residential
management fee percentage.
(1)In such cases, the residential management fee yield is
limited to the yield that would be allowed under a 20
percent rent increase using the current management fee
percentage.
(2)The residential management fee percentage is then adjusted
to reflect the maximum allowable yield under the new rent
structure for the project.
(3)This adjustment to the fee percentage will not be subject to
a reasonableness review as described in Sections 2 of this
chapter. It is merely an adjustment of the percentage fee
which will occur at the same time the rent increase is
approved by HUD.
(4)This adjusted percentage fee will apply to all future rent
potentials without regard to the fee range limits until such
time as the agent requests a change in the percentage fee.
___________________________________________________________________________
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4381.5 REV-2
___________________________________________________________________________
Figure 3-6
EFFECT OF A RENT INCREASE
ON THE MANAGEMENT FEE
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*
GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED
*
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___________________________________________________________________________
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___________________________________________________________________________
Figure 3-7 illustrates the method for determining the revised
residential management fee for these projects and adjusting the
residential fee percentage for these projects.
c.Adjusting the Management Fee for Rent Decreases. When project
rents are reduced as a result of refinancing or other reason
permitted by HUD regulation, HUD will also adjust the residential
management fee percentage in order to ensure that agents retain
their current yield. In readjusting the percentage, the
following formula should be used:
Revised Management
Fee Percentage
=
Current Fee Yield x Number of Units
________________________________________________
Collections Percentage x Reduced Monthly Rent
Potential
(0.95 or other factor determined by HUD)
This adjusted percentage fee will apply to all future rent
potentials without regard to the fee range limits until such time
as the agent requests a change in the percentage fee.
d.Capped Fee Yield In Hold-Harmless Projects. For projects where
the residential management fee yield has been capped pursuant to
the hold-harmless provisions set forth in paragraphs 3.24 and
3.27, Loan Management staff must use the capped fee yield when
processing rent increases. (NOTE: This only applies to Pre-1986
contracts covered by paragraphs 3.24 and 3.27)
3.10 OWNER REQUESTS FOR CHANGES IN EXISTING FEES
a.Owner Submission. To initiate a change in the management fee
percentage, the owner and agent must submit a new Management
Certification showing the revised management fee(s).
(1)For projects subject to up-front reviews, the fee can be
changed only after the HUD Area Office has given written
approval of the fee.
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(2)Owners of projects subject to after-the-fact reviews may
negotiate and implement revised fees with in-place agents
without HUD approval, as long as the fee complies with the
reasonableness standards described in Section 3. A new
Management Certification must be submitted before the
revised fee can be charged.
(3)For projects not subject to HUD review, owners may negotiate
fees and revise fees without HUD review or approval.
However, the owner/agent must submit a new Management
Certification.
b.HUD Review. When HUD receives a request from an owner to change
the management fee for an in-place agent, Loan/Asset Management
staff should take the following steps:
___________________________________________________________________________
3-1312/94
4381.5 REV-2
___________________________________________________________________________
Figure 3-7
Adjusting the Residential Management Fee Percentage
for Projects Receiving Significant Rent Increases
===========================================================================
METHODOLOGY
Step 1:
DETERMINE ALLOWABLE FEE YIELD
Allowable Fee Yield =
Step 2:
Projected Fee Yield** Under a 20% Rent Increase
Using Current Management Fee Percentage
CALCULATE REVISED MANAGEMENT FEE PERCENTAGE
Revised Management
Allowable Fee Yield Under New Project Rents
Fee Percentage
= _________________________________________________
Annual Net Rent Potential Under New Project Rents
** Projected Fee Yield = Yield Under New Rent Structure Using Applicable
Occupancy Factor Adjustment
__________________
EXAMPLE
ABC Apartments Assumptions:
A 30% rent increase has been approved
Annual Gross Rent Potential Under 30% Rent Increase = $1,300,000
Annual Gross Rent Potential Under 20% Rent Increase = $1,200,000
Current Management Fee =
Step 1:
7.00%
Determine Allowable Fee Yield Under New Project Rents
$1,200,000
x .95
__________
1,114,000
x .07
___________
(Annual Gross Rent Potential Assuming 20% Increase)
(Standard Occupancy Adjustment Factor **)
_________________________________________
(Adjusted Gross Rent Potential)
(Current Management Fee)
________________________
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$79,800
Step 2:
(Allowable Fee Yield)
Revise Fee Percentage
$1,300,000
x .95
__________
$1,235,000
(Annual Gross Rent Potential Assuming 30% Increase)
(Standard Occupancy Adjustment Factor **)
__________________________________________
(Adjusted Gross Rent potential)
$79,800 (Allowable Fee Yield) / $1,235,000
(Adjusted Gross Rent Potential) = 6.46%
______________________
**
Standard Occupancy Adjustment factor of 95% is used in this example.
However, the factor normally used in the budgeted rent increase
process and/or in processing the Management Fee percentage should be
used.
===========================================================================
___________________________________________________________________________
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4381.5 REV-2
___________________________________________________________________________
(1)Review the Management Certification to determine the type of
review required, if any.
(2)Write the applicable review category (i.e., up-front,
after-the-fact, or no review) on the first page of the
Management Certification.
(3)For projects not subject to up-front reviews, Loan/Asset
Management staff should update the office computer system
with data items used in determining reasonableness ranges.
This information will be used when revising residential fee
ranges.
(4)Follow the procedures in Section 2 to assess the
reasonableness of the proposed changes in the existing
management fees.
3.11 TERM OF HUD-APPROVED MANAGEMENT FEES
a.Once HUD has reviewed and approved the percentage management fees
for a project (i.e., completed an up-front or after-the-fact
review), these management fees will not be subject to further
review unless:
(1)There is a change in management agents; or
(2)Owners/agents request a change in the approved management
fee percentage (see paragraph 3.10).
b.Rents increases do not trigger HUD management fee reviews.
rent increases may require an adjustment of the fee percentage
(see paragraph 3.9).
Large
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4381.5 REV-2
___________________________________________________________________________
SECTION 2:
PROCEDURES FOR PERFORMING MANAGEMENT FEE REVIEWS
============================================================
KEY STEPS IN MANAGEMENT FEE REVIEW PROCESS
oReceive owner/agent request and management certification
oDetermine if up-front or after the fact review is required
oDetermine if "Hold-Harmless Provisions" are Applicable
oDetermine whether fees are reasonable
oNotify the owner and agent
oDocument the results of the review
============================================================
3.12 BASIC PROCEDURES FOR PERFORMING MANAGEMENT FEE REVIEWS
Loan/Asset Management staff must follow the procedures below when
performing management fee reviews. These procedures are used for both
up-front and after-the-fact management fee reviews. See Figure 3-5 to
determine the type of review required.
a.Determining If "Hold-Harmless Provisions" Are Applicable.
instituted reasonableness reviews of management fees on August 1,
1986. If an owner/agent is seeking an increase in the
residential management fee percentage and the agent's current
management agreement was executed prior to August 1, 1986,
specific hold-harmless provisions may apply to the review of the
residential fee. See Section 4 of this chapter.
HUD
b.Determining Whether Management Fees Are Reasonable. Section 3 of
this Chapter provides guidance for determining the reasonableness
of these fees.
(1)If the agent listed on the Management Certification is a new
agent for the project, all four types of management fees
(i.e., residential, commercial, miscellaneous, and special
fees) must be reviewed for reasonableness.
(2)If the fee review is being performed because the existing
agent for the project is requesting an increase in the
percentages for any management fee or new special fees, only
the fees where a change is
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___________________________________________________________________________
requested must be reviewed. For example, if the Management
Certification submitted indicates the owner/agent is seeking
a higher residential fee percentage but no change in the
commercial fee percentage or special fees for the project,
then Loan/Asset Management staff need only review the
reasonableness of the proposed increase in residential fee
percentage.
c.Documenting the Results of the Review. The analysis and results
of the review must be documented as required by paragraph 3.17.
d.Notifying the Owner and Agent. The owner and agent must be
notified of the results of the review as required by paragraph
3.15.
3.13 UP-FRONT MANAGEMENT FEE REVIEWS
For affected projects, an up-front review is required whenever an
owner proposes a new management agent or requests a change in the fee
percentages or special or add-on fees paid to the existing agent.
Loan/Asset Management staff determine the reasonableness of the
proposed fees following the criteria provided in Section 3.
a.HUD Notice to Owners. Loan/Asset Management staff must notify
the owner and agent in writing if an up-front review is required.
Owners/agents receiving notices that an up-front management fee
review is required remain subject to up-front reviews until
notified by HUD that such reviews are no longer required.
b.Prior Approval is Required. For projects subject to an up-front
review of management fees, owners/agents must obtain HUD approval
of the amount listed in the management fee line item of the
project's operating budget before (1) charging any portion of the
fee against the project operating account or (2) otherwise
obligating the project to pay a management fee.
(1)If the proposed agent has not previously received HUD
approval, the owner and the agent may sign a management
agreement that contains a clause specifying that the
agreement is conditional upon HUD approval of the agent.
The agent may not be paid from project funds until the owner
receives HUD approval of the agent.
(2)If, in an emergency, an agent assumes management of a
project without prior HUD approval of the management fee,
the agent may begin collecting the fee and charging these
amounts against the project's account. However, the
management fee is subject to reduction if Loan/Asset
Management staff determine the fee amount is excessive. In
such cases, Loan/Asset Management staff must review the fee
immediately upon receipt of the Management Certification.
___________________________________________________________________________
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___________________________________________________________________________
c.Owner Requests for Up-front Review. An owner with a project
subject to an after-the-fact review may request that HUD perform
an up-front review. Loan/Asset Management staff must conduct an
up-front review if the owner requests one.
d.Time Period for Completion of Review. Loan/Asset Management
staff should complete up-front management fee reviews within 60
days of receiving the Management Certification.
(1)If the owner and agent do not receive written notice of the
results of HUD's management fee review within 60 days, the
agent may begin collecting the management fees documented in
the Management Certification under review.
(2)If the results of a HUD review completed after this date
indicate that the management fees must be reduced, these
reductions will take effect on the date that notice of the
review results is issued to the owner and agent.
3.14 AFTER-THE-FACT MANAGEMENT FEE REVIEWS
For projects which are subject to after-the-fact reviews (See Figure
3-5), owners/agents may establish and charge the management fee amount
listed in the project's budget without prior HUD approval.
Owners/agents must submit a new management certification prior to
changing the management fee for a project.
a.Timing of Review. Loan/Asset Management staff may assess the
reasonableness of these fees at any time, but will usually
perform this review in conjunction with other servicing
activities (e.g., reviewing annual or monthly financial reports,
processing rent increase requests, or negotiating transfers of
physical assets or provisional workout arrangements). Whether
performed in conjunction with other servicing activities or
independently, Loan/Asset Management staff should complete the
fee review within 12 months of receiving the owner/agent's
request for a fee increase.
b.Results of the Review. If the review shows that the residential
fee yield falls within the applicable fee range at the time the
fee was established, the fee will be approved. If the fee
exceeds the applicable range, the fee must be reduced to an
amount considered reasonable under the range.
c.Fee Reviews Performed in Conjunction With Financial Reviews.
the fee review is performed in conjunction with the review of the
project's annual financial statements or monthly accounting
reports, Loan/Asset Management staff should perform the
procedures established in paragraph 3.12 in accordance with the
following requirements.
If
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4381.5 REV-2
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(1)Use the data on actual rent collections from the project's
most recent financial statement to make reasonableness
determinations.
(2)If a review of the project's financial statements show that
the owner/agent's collection assumptions were wrong, rework
the yield computation using the actual collections data.
(3)Compare the yield with the acceptable range that is in
effect at the time of the after-the-fact review.
(4)If after-the-fact reviews reveal that the fee amount charged
to the project exceeds the amount the HUD Area Office
determines to be reasonable, Loan/Asset Management staff
should immediately review fees at all other projects that
are:
(a)Managed by the same agent; and
(b)Subject to after-the-fact reviews and have not already
been reviewed.
(5)Loan/Asset Management staff must also perform a compliance
check on the amount of management fee charges, as required
in Paragraph 2.21.d of HUD Handbook 4370.1, Reviewing Annual
and Monthly Financial Reports. These checks assess whether
the fees collected by the agent are within the limits shown
on the Management Certification.
d.Fee Reviews Performed in Conjunction With Rent Increase Requests.
If the review is performed in conjunction with the processing of
a rent increase request, Loan/Asset Management staff should take
the review in the following manner.
(1)Complete the procedures established in paragraph 3.12.
Assess the reasonableness of the management fee and
determine the residential income fee percentage on the basis
of current rents.
(2)Use the instructions in Appendix 4 to process rent increases
that use a cost approach.
____________________________________________________________
NOTE:
If an after-the-fact review is done in conjunction
with the processing of a rent increase request, review the
fee early during the rent increase processing so that HUD's
decision on the rent increase will not be delayed.
____________________________________________________________
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3.15 NOTIFICATIONS TO OWNERS AND AGENTS
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a.Acceptable Fees. If the fee amount to be charged to the project
account is acceptable, Loan/Asset Management staff must send a
letter to both the owner and agent stating that: "HUD has
approved a residential management fee of ___[specify]% and other
fees set forth in the Management Certification dated ________
[enter the date shown in the top right portion of Page 1 of the
Management Certification]."
b.Unacceptable Fees. If the fee amount(s) is(are) not acceptable
under the procedures set forth in this chapter, Loan/Asset
Management staff must send the owner and agent a letter that:
(1)Explains the reasons HUD cannot approve the fees shown in
the Management Certification.
(2)Sets forth the fees HUD could approve.
(3)Indicates whether the residential fee is held harmless due
to the transition provisions in Section 4 of this chapter.
(4)Includes the statements required by paragraph 3.27(d) if the
residential fee yield is capped under the provisions of that
paragraph.
(5)Within 30 days of the letter, requires the owner and agent
to:
(a)reduce the fee(s) to the amount(s) specified in the
letter;
OR
(b)appeal HUD's decision (see paragraph 3.16).
(6)With 30 days of the initial notification letter or HUD's
decision letter responding to the owner's/agent's appeal:
(a)Refund to the project any excessive fees collected.
(b)Reduce any management fees payable by the excessive
amounts included in them.
3.16 APPEALS
a.The owner and management agent may appeal the results of a
management fee review to the Multifamily Division Director in the
Area Office.
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(1)Appeals must be submitted in writing within 30 days after
the date of HUD's decision letter.
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(2)In the appeal, owners/managers must show how special needs
and conditions at the project and the type of management
services required justify a higher fee.
(3)If agents submit an appeal without the owner's signature,
the agent must certify that the owner consents to the
appeal.
b.The Director of Housing in the Area Office must issue a decision
within 30 days after receiving an appeal.
c.From the time the Area Office issues its initial decision letter
until the Director of Housing renders a decision on the appeal,
management agents can collect fees only as provided below.
(1)If the appeal follows an up-front review and HUD has
approved the agent, the agent may collect only the fee
specified in HUD's initial decision letter.
(2)If the appeal follows an after-the-fact review, the agent
can continue to collect the disputed fee until the Area
Office issues a decision on the appeal. If the appeal
decision requires a reduction in the fee, the reduction will
be retroactive to the date the agent began charging the
excessive fee. Therefore, within 30 days after the date of
the appeal decision, the owner and the agent must:
(a)Reduce the fee to the amount specified in Area Office
decision on the appeal.
(b)Refund to the project any excessive fees collected.
AND
(c)Reduce any excessive fees payable by the excessive
amounts included within them.
d.If the agent submitted the appeal without the owner's signature
and, on appeal, HUD allows part or all of the amount appealed,
the appeal decision letter must state that HUD's approval of the
fee is subject to the owner's written approval of that fee.
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___________________________________________________________________________
3.17 DOCUMENTING MANAGEMENT FEE DECISIONS
Loan/Asset Management staff must document their approvals and
disapprovals of management fees.
a.Fees Approved.
If the fees are approved:
(1)Indicate HUD's approval on the last page of the Management
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Certification; and
(2)Staple a copy of the HUD approval letter to the Management
Certification.
b.Fees Disapproved.
If fees are disapproved:
(1)Annotate Page 1 and Attachment 1 of the Management
Certification to show which fee(s) were not approved;
(2)Indicate HUD's disapproval on the last page of the
Management Certification and enter the date of the
disapproval letter. If the residential fee percentage is
held harmless, indicate this condition on the certification
and enter the hold harmless percentage or yield; and
(3)Staple a copy of the disapproval letter to the Management
Certification.
c.Retaining Key Documents.
Management fee documents must be retained in the project file for
at least three years. This documentation must include:
(1)Management Certifications;
(2)Decision letters; and
(3)Management fee correspondence with owners/agents.
d.Updating Computerized Files.
Loan/Asset Management staff must enter information on approved
management fees into their office's computer system.
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SECTION 3:
ASSESSING REASONABLENESS OF MANAGEMENT FEES
NOTE: The procedures in this Section are intended to apply only when
assessing the reasonableness of a percentage fee when an agent requests a
change in the fee percentage. Once a percentage fee is approved by HUD,
reasonableness is not further assessed under this Section. (See Chapter 3,
Section 4 and Paragraph 3.9(b)-(d) for reasonableness tests which may be
applicable to a specific project after the approval of a percentage fee by
HUD).
3.18 OVERVIEW
a.Goals of the Reasonableness Determination. The goals of HUD's
review of management fees for reasonableness are to assure that
fees approved for projects:
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(1)Provide sufficient compensation to attract the quality of
management needed to administer the project during the time
period covered by the fee.
(2)Do not significantly exceed the amount that HUD determines
independent agents and owners would ordinarily negotiate for
comparable services at projects in the same geographic/cost
area, except as justified by conditions that require more
time and effort on the part of the management agent.
b.Determining Comparable Costs for the Residential Management Fee.
HUD Residential income fee ranges are established by HUD that
reflect costs by geographic/cost area. Paragraph 3.19 below
provides instructions for developing and updating fee ranges.
(1)For projects subject to fee reviews, Loan/Asset Management
staff use the applicable ranges to determine whether the
owner-proposed fee percentages initially yield a PUPM dollar
amount that is reasonable.
(2)If using the owner's proposed percentage results in a dollar
yield that falls within the applicable range, the proposed
percentage will be approved and remain in effect until the
management agent requests an increase in the percentage fee
amount.
c.Additional Fees Based upon Project Conditions. Residential
Income fee ranges are developed using data on the fees
independent management agents charge for managing projects with
market-based incentives for controlling both operating costs and
management fees. The presence of certain project characteristics
or conditions may warrant the approval of fees in excess of the
residential fee.
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4381.5 REV-2
___________________________________________________________________________
(1)Add-on fees may be approved
characteristics or conditions. Paragraph 3.21
provides instructions for developing a list of
Add-on fees and determining the reasonableness
Add-on fees.
to recognize long-term
below
permissible
of proposed
(2)Special fees may be approved to recognize temporary project
conditions. Paragraph 3.23 below provides instructions for
determining the reasonableness of Special Fees.
d.Additional Fees Based upon Income
(1)Commercial Fees. Commercial fees are considered reasonable
if they do not significantly differ from the fee yield HUD
determines would be generated by projects with similar types
of commercial space.
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(2)Miscellaneous Income Fees. Miscellaneous income fees are
considered reasonable if the fee percentage does not exceed
the approved residential income fee percentage.
e.Compensation for Section 202/Section 811 Project Administrators
Loan/Asset Management staff must also determine whether the
salaries of Section 202/811 Project Administrators are
reasonable. Project administrators' salaries should be compared
to the salaries of other project administrators in the area,
taking into consideration the level of management required to
operate the property.
3.19 CALCULATING THE RANGE OF ACCEPTABLE RESIDENTIAL FEE YIELDS
Each Super A Area Office must assure that residential fee ranges are
established for its jurisdiction. An individual Area Office may
establish their own residential fee range, if the market (or a
specific portion of the market) covered by the Area Office varies
significantly from the Super A Office. At the Area Office's option, a
single range may be used with add-ons, several different ranges may be
established, or the Area Office may develop its own process for
developing ranges. For example, if fee data show that yields vary
significantly by a project's location, a range for high and low cost
areas might be appropriate. Ranges must be reviewed and updated every
two years. Updated ranges should be set more frequently if: (1)
staff workload permits; or (2) the fees used to set the range(s)
change significantly. If the ranges are not reviewed and published by
an Area Office at the two year interval, they will automatically be
adjusted by the Services Consumer Price Index (CPI) for the total of
the 2 years.
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12/943-24
4381.5 REV-2
___________________________________________________________________________
At the request of an owner/agent, information regarding the process
for which ranges are established should be made available. Area
Offices are encouraged to publish their method for deriving the range
as well as the approved range on an annual basis.
Whenever the permissible fee range is developed or revised, a copy
should also be forwarded to HUD Headquarters, Attention: Director of
Multifamily Housing Management. This will assist in the monitoring
and review of nationwide financial data.
______________________________________________________________
NOTE:
As used in this paragraph and throughout this
chapter, "monthly rent potential" means the sum of the
contract rents of all units, including rent-free units, shown
on the most recent Rent Schedule (Form HUD-92458)
submitted to HUD.
______________________________________________________________
a.Data Collection.
To establish a range of acceptable fee yields,
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HUD Area Office staff will gather information on the fees charged
for HUD-insured and HUD-assisted projects where the owners/agents
have incentives to control management costs.
(1)If possible, ranges should be established using data from
unassisted, HUD-insured projects.
(2)Projects included must meet all of the following criteria:
(a)Be owned by profit-motivated entities and have fees
that are not subject to HUD review.
(b)Be managed by independent agents who have no
identity-of-interest with the owners.
(c)Properly allocate the management costs between the
management fee and the project account as required by
the procedures specified in Chapter 6.
(d)Have no problems that would merit special or add-on
fees, whether or not these fees are paid.
(e)Be well-managed and in good physical condition (e.g.,
generally receive at least satisfactory ratings on any
IPA, GAO, IG or HUD reviews). Mortgagee physical
inspections should show that the physical condition of
the project is satisfactory.
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4381.5 REV-2
___________________________________________________________________________
(3)If an Area Office does not have enough unassisted,
HUD-insured projects to establish a meaningful range for a
particular market area, the office may include data from
Section 8 New Construction or Substantial Rehabilitation
projects that meet the criteria in paragraph (2) above.
(4)If the office still does not have enough projects to
establish a meaningful range for a particular cost area or
project type, the office may further expand the range by
including projects subject to after-the-fact fee reviews
that also meet criteria (b) through (e) in paragraph (2)
above. Projects must be added in the following sequence.
(a)Limited Distribution Section 8 New Construction and
Substantial Rehabilitation projects.
(b)Nonprofit Section 8 New Construction and Substantial
Rehabilitation projects.
____________________________________________________________
NOTE:
Use the fee yield proposed by the owners/agents
rather than any revised amount allowed by HUD following
an after-the-fact review.
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____________________________________________________________
____________________________________________________________
EXAMPLE:
The proposed residential fee yield shown on
Line 1d of Attachment 1 of the original Management
Certification of a LD was $22 per-unit per-month (PUPM).
As a result of an after-the-fact review, the Area Office
approved a fee yield of $19 PUPM. The originally quoted
yield of $22 should be used rather than the $19 figure
approved by HUD.
____________________________________________________________
b.Calculating the Fee Yield. Residential fee yields used for
establishing the range(s) must be computed by applying the
residential fee percentage to the monthly rent potential for all
revenue-producing units (adjusted to reflect a 95 percent
collection rate).
(1)The fee percentage and the rent potential used must be those
in effect at the time the ranges are established.
(2)Yields must be computed on a per-unit per-month (PUPM)
basis.
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12/943-26
4381.5 REV-2
___________________________________________________________________________
c.Determining the Acceptable Range. HUD will use the following
procedures to set the acceptable range. These will ensure that
the top of the acceptable range does not exceed "amounts
ordinarily paid" for management services and is not distorted if
some fee yields significantly exceed the average amount of most
fee yields. Figure 3-8 provides an example of the range
determination process.
in dollars PUPM.
yield.
(1)List all fee yields in ascending order. Express fee yields
Show the number of projects with each fee
(2)Determine the mean (average) fee yield by dividing the total
dollar amount in column (c) by the total number of projects
in column (b). Round the result to the nearest dollar.
(3)Determine the top of the acceptable range.
If the highest
fee yield is:
(a)Less than or equal to 120 percent of the mean, use the
highest fee yield rounded to the nearest dollar.
(b)Greater than 120 percent of the mean, use 120 percent
of the mean fee yield rounded to the nearest dollar.
(4)Use the lowest fee yield among the figures collected to
establish the lower end of the acceptable range.
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============================================================
Figure 3-8
Example of Residential Fee Range Determination
============================================================
(a)
(b)
(c)
Fee Yield
Number of
Total
(PUPM)
Projects
(a x b)
____________________________________________________________
$12
2
$24
$14
1
$14
$15
4
$60
$17
5
$85
$18
7
$126
$19
5
$95
$20
4
$80
$21
1
$21
$25
2
$50
____________________________________________________________
Total
31
$555
____________________________________________________________
Average: $555 / 31 = $17.90 (rounded to $18 PUPM)
____________________________________________________________
Top of Acceptable Range:
Lower of: $18 x 1.20 = $21.60 or $25
____________________________________________________________
Lower End of Acceptable Range = $12
============================================================
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4381.5 REV-2
___________________________________________________________________________
3.20 REVIEWING RESIDENTIAL MANAGEMENT FEES
a.Review Owner Estimate of Monthly Collections for Accuracy and
Reasonableness.
Loan/Asset Management staff must examine the
occupancy/collections assumptions and yield computations shown in
Attachment #1 of the Management Certification (Form HUD-9839-A,
B, or C) and confirm that they are accurate. If inaccuracies are
found, the figures must be corrected.
(1)Determine if the estimate of monthly collections shown on
Line 1(a) of the attachment is accurate. Except for the
following cases, this figure should be 95 percent of the
monthly contract rent potential shown in the last
HUD-approved Rent Schedule (Form HUD-92458).
(a)Owners may use a collections base of less than 95
percent of potential only if the conditions that impede
collections were not caused or exacerbated by the
current management agent.
(b)If the conditions leading to collections of less than
95 percent will last less than one year, a special fee
should be used instead of a lower estimate of
collections.
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(2)If the owner/agent listed rent collections of less than 95
percent on the Management Certification, review the
following items to identify the cause of the lower rent
collections.
(a)The owner's/agent's explanation for the lower
collections base provided in Attachment 1 of the
Management Certification.
(b)The project's recent monthly accounting and occupancy
reports.
(c)Market area vacancy trends.
(d)Any marketing/management initiatives the agent is or
will be taking to increase occupancy and/or reduce
collection losses.
(3)If the lower rent collections percentage is due to the
current agent's poor rent collection or leasing practices,
compute the PUPM yield using 95 percent rather than the
collections percentage proposed by the owner/agent.
(4)If the lower rent collections percentage is due to factors
beyond the current agent's control:
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12/943-28
4381.5 REV-2
___________________________________________________________________________
(a)Use the collections percentage most likely to be
realized through aggressive management effort during
the term the fee will be in effect.
(b)Limit the term of that collections percentage.
Generally, the term should not exceed one year. If
collections will improve significantly within the year,
different percentages may be used during the year
(e.g., 85 percent for first six months and 90 percent
for the next six months).
(c)Determine if the agent will receive a special fee for
the conditions related to lower rent collections. If
the agent will receive special fees for these
conditions, a 95 percent rent collections figure should
be used to determine the fee yield.
(d)Recompute the PUPM fee yield using the allowable
collections percentage.
b.Review the Owner's Estimate of total fee yield and PUPM yield
shown on the Management Certification to ensure that they were
properly computed.
c.Assess Whether the Proposed Fee Percentage is Reasonable.
Management staff must assess whether the yield produced by the
fee percentage is reasonable. If the yield is not reasonable,
Loan
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the fee percentage may not be approved. (Note: If PUPM fee
yield listed in the Management Certification was inaccurate, use
the corrected fee yield calculated under paragraph (b) above.)
(1)If the PUPM fee yield falls within the residential fee range
established by the Area Office at the time approval was
requested, the residential management fee is considered
reasonable and the fee percentage may be approved. As
future rent increases are approved, this percentage fee may
provide a fee yield that exceeds the upper limit of the
range. This yield is allowable as long as the fee
percentage remains the same.
(2)If the PUPM fee yield falls below the current residential
fee range established by the Area Office, Loan/Asset
Management should assess the project's past and current
performance. The agent may have proposed a low fee to win
the management contract with the owner. If the fee
percentage is unrealistically low, the agent may experience
management problems resulting in poor services and
conditions at the project.
(a)If there are no problems attributable to the management
agent, Loan/Asset Management staff should approve the
fee and
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4381.5 REV-2
___________________________________________________________________________
monitor the project periodically to make sure that
management services are adequate.
(b)If there have been problems with management agent
performance, Loan/Asset Management staff should discuss
with the owner the possible need to upgrade management
services and to propose a fee commensurate with these
services,
(3)If the PUPM fee yield exceeds the acceptable range, the
requested residential fee percentage may not be approved.
Loan/Asset Management staff must advise the owner/agent of
the residential fee percentage that could be approved.
3.21 REVIEWING THE REASONABLENESS OF ADD-ON FEES
a.Developing an Add-on Fee Schedule. An add-on fee reflects the
amount HUD will pay management agents to cover a higher level of
management service for a project with specific characteristics or
recognized long-term conditions.
(1)Each Area Office must develop and publish a list of
permissible Add-on fees that may be applicable to projects
within its jurisdiction.
Whenever this fee list is developed or revised, a copy
should be forwarded to HUD Headquarters, Attention: Director
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of Multifamily Housing Management. This will assist in the
monitoring and review of nationwide financial data.
(2)Add-on fees are separate and distinct from residential fee
percentage and should not be used to provide agents a fee
for functions covered by the residential fee percentage.
For example, if the projects used to establish the
residential fee range were all unassisted, HUD-insured
projects, allowing an Add-on fee for subsidy contract
administration could be appropriate. However, if the
residential fee was established by relying heavily on
assisted projects, an add-on fee for this project
characteristic would be inappropriate.
(3)Add-on fees may be established for specific types of
projects and locations (e.g., an add-on fee for projects
located in high-cost areas). Add-on fees must be reviewed
and published every two years.
(4)The schedule of Area Office approved add-on fees must be
made available to owners/agents upon request.
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___________________________________________________________________________
b.Determine Whether the Project's Characteristics Warrant Add-On
Fees. Examine the add-on fees listed by the owner/agent in the
Management Certification (see Item #4 - Special Fees, Attachment
1 to the Management Certification form) and determine whether the
project's characteristics or conditions qualify the agent to
receive the add-on fees requested.
(1)Loan/Asset Management staff should review the project's
records to assess whether add-on fees are warranted. For
example, an add-on fee is not warranted if the owner/agent
has requested the add-on fee for small projects established
by the Area Office, but the number of units in the project
exceeds the size limit to qualify for the fee.
(2)Loan/Asset Management staff must not allow add-on fees for
short-term problems or services when a special management
fee would be more appropriate. For example, the Area Office
may have established an add-on fees for adverse neighborhood
conditions, but the adverse conditions at the project under
review are temporary. The following steps should be taken
to determine whether add-on fees are warranted.
(a)Assess whether the project conditions the add-on fee is
intended to cover are likely to be long-term
conditions.
(b)If the project conditions are likely to be short-term,
the add-on fee must not be approved.
(c)If the add-on cannot be approved, consider whether the
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project conditions warrant a special fee.
are appropriate, inform the owner/agent.
If such fees
(3)If the owner/agent has requested an add-on fee for a project
condition that does not have an established add-on fee, the
add-on fee should be disallowed.
(a)If this occurs, Loan/Asset Management staff should
assess whether the condition warrants a special fee.
(b)If a special fee is warranted, the notice issued to the
owner/agent should indicate that the add-on fee was not
allowed but that a special fee could be used.
c.Assess Whether the Project's Add-On Fees are Reasonable.
Loan/Asset Management staff must assess whether the add-on fee
amounts requested are reasonable.
(1)Only the add-on fees warranted for the project need to be
reviewed for reasonableness.
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___________________________________________________________________________
(2)The amount of the add-on fee listed on the Management
Certification must be compared to the schedule of add-on
fees established by the Area Office.
(3)Add-on fees that do not exceed the current schedule are
considered reasonable and may be approved.
(4)If the amount requested exceeds the fee amount on the
current fee schedule, the add-on fee may not be approved.
The notice to the owner/agent should indicate the amount the
Area Office could approve.
3.22 REVIEWING THE REASONABLENESS OF COMMERCIAL AND MISCELLANEOUS FEES
a.Commercial Fees. The yield likely to be derived from the fee
proposed for the project must not exceed the yields generated by
projects with comparable types of commercial space (e.g., stores,
offices, etc.).
b.Miscellaneous Fees. The miscellaneous fee percentage must not
exceed the residential income fee percentage.
3.23 REVIEWING THE REASONABLENESS OF SPECIAL FEES
a.Determine if Circumstances Warrant Special Fees.
Management staff must confirm that:
Loan/Asset
(1)The agent did not cause the problem that the fee is designed
to address.
(2)The fee is tied to the correction of specific problems or
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the accomplishment of specific tasks.
(3)The fee is structured so that it is payable only if the
agent completes the required actions or obtains the required
results.
(4)The fee does not include services that are covered by
residential, commercial, or miscellaneous management fees,
or by other sources of compensation.
(5)The fee is reasonably related to the time, effort, and
expertise required of the agent.
(6)The fee is paid only for a limited period of time.
length of this period should be no longer than the time
required to resolve a specific problem or complete a certain
task.
The
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b.If the amount requested exceeds the amount determined by the Area
Office to be reasonable, the special fee may not be approved.
The notice to the owner/agent should indicate the amount the Area
Office could approve.
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SECTION 4:
SPECIAL PROVISIONS FOR FEES APPROVED
ON OR BEFORE AUGUST 1, 1986
3.24 GENERAL
The provisions in this section apply only to management fees subject
to HUD review that were approved by HUD on or before August 1, 1986
and continue to remain in effect. These provisions are referred to as
the "hold harmless" provisions for management fees. Figure 3-9
contrasts the fee review procedures for projects with management fees
approved prior to August 1986 with the procedures for all other
projects subject to HUD management fee reviews.
3.25 CONTINUATION OF EXISTING AGREEMENTS
On August 1, 1986, HUD implemented the reasonableness criteria for
management fees described in the above sections of this chapter for
projects that are subject to management fee reviews. If the current
management agreement and fee percentages payable from project funds
were approved by HUD on or before August 1, 1986, the agent may
continue collecting that approved fee percentage for the term of the
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agreement. This is true even if the per-unit per-month (PUPM) fee
yield exceeds the upper limit of the fee range that the Area Office
would use to assess the reasonableness of the agent's fees if a fee
review were being performed.
3.26 REQUESTS FOR INCREASES IN PERCENTAGE FEES AT OWNER-MANAGED PROJECTS
AND PROJECTS WITH OPEN-ENDED AGREEMENTS
The following procedures apply to projects with active management
agreements signed on or before August 1, 1986 that have self-managing
owners or owners/agents with open-ended agreements. If the
owner/agent requests an increase in the residential management fee
percentage payable out of project funds and the fee is subject to HUD
review, Loan/Asset Management staff must use the following procedures.
a.The proposed fee percentage increase may not be approved if the
PUPM yield under the new fee would exceed the maximum amount
allowed by HUD under the criteria set forth in Sections 2 and 3
of this chapter. A smaller increase in the percentage fee may be
approved as long as the fee yield does not exceed the maximum
allowable amount.
b.If the proposed increase cannot be approved because it exceeds
the reasonableness range, the existing fee percentage is held
harmless. Area Offices may not reduce the current HUD-approved
residential fee percentage for these projects, even if the yield
produced by this percentage exceeds the applicable reasonableness
range.
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Figure 3-9
THE MANAGEMENT FEE REVIEW PROCESS
___________________________________________________________________________
OWNERS REQUESTING FEE PERCENTAGE INCREASES
___________________________________________________________________________
Post-1986 Agreements
Subject to HUD Review
Pre-1986 Fixed Term
Agreements
Pre-1986 Open Ended
Agreements
___________________________________________________________________________
Use ranges to determine
the approvable fee.
Use ranges to determine
the approvable fee.
Any increase in the fee
percentage must result
in a yield
range limit
However, th
percentage
to be used,
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yield excee
limits.
___________________________________________________________________________
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RENEWALS OF PRE-1986 FIXED TERM AGREEMENTS
_________________________________________________________________
If the fee percentage is not increased but the current
fee yield exceeds the range:
(1)
cap the yield at the current yield
(2)
adjust the fee percentage by dividing the capped PUPM
yield by the new net monthly rent potential
See paragraph 3.27
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EXAMPLE:
An owner who has an open-ended
management agreement with the in-place agent executed in
November 1985 requests a residential fee increase from the
previously approved figure of six percent to 6.25 percent.
The results of the review by Loan/Asset Management staff
reveal that not only does the yield under the proposed
increase ($32 PUPM) exceeds the maximum allowable yield
of $26 PUPM, but the yield under the current fee of six
percent ($29 PUPM) also exceeds the maximum. In this
case, the residential fee percentage must remain at the
previously approved figure of six percent.
__________________________________________________________
c.Commercial and miscellaneous income percentage fees remain
subject to the reasonableness criteria discussed in paragraph
3.12.
__________________________________________________________
REMINDER: Commercial and miscellaneous income
percentage fees cannot exceed the residential fee
percentage.
__________________________________________________________
3.27 RENEWALS OF EXISTING FIXED-TERM AGREEMENTS
The provisions of this paragraph apply only to management agreement
renewals where the residential management fee percentage remains the
same as the fee percentage previously approved by HUD. Owners/agents
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of projects with fixed-term agreements that propose to change the
management fee percentage must be reviewed in accordance with Section
3 of this chapter.
a.If the fee is subject to HUD review and the residential fee yield
shown on the Management Certification exceeds the maximum amount
allowed under Section 3 of this chapter, Loan/Asset Management
staff must cap the fee at its current yield.
b.If the fee was not previously capped, Loan/Asset Management staff
must use the procedures described in paragraphs 3.20(a) and (b)
to compute the yield the agent is likely to collect. The
residential fee yield must be capped at this amount.
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EXAMPLE:
In a letter dated October 31 of last year, HUD
approved a monthly rent potential of $94,737 for Project A,
which consists of 200 units. On November 15, Project A
submitted a Management Certification showing a six
percent residential management fee, which is the same
percentage that HUD approved under the initial
Management Agreement signed in November 1985. (Note:
The fee for this property was not previously capped.)
Attachment 1 of the Management Certification shows that
this fee's yield at 95 percent of the $94,737 rent potential
is $27 PUPM. The maximum amount HUD would otherwise
approve under Sections 2 and 3 of this chapter is $26
PUPM. In this case, the residential fee yield must be
capped at $27 PUPM.
__________________________________________________________
c.The residential fee for such projects will remain capped at this
level until conditions change and HUD approves a revised fee due
to such changes. The types of situations in which Loan/Asset
Management staff may consider revising the approved fee payable
from project income include the following:
(1)The capped yield no longer exceeds the maximum allowable
yield;
(2)The financial or physical condition of the project have
changed; or
(3)The scope of management services have changed.
d.In the decision letter authorizing the renewal of the Management
Agreement, Loan/Asset Management staff must:
(1)State the capped residential fee yield.
(2)If the fee was previously capped and the fee percentage had
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to be reduced to comply with the cap (see paragraph (e)(1)),
state the revised fee percentage payable out of project
income.
(3)If necessary, require the owner and the agent to revise
their Management Agreement to show the revised management
fee.
(4)State that the cap on the residential fee yield will remain
in effect until HUD approves a revised fee as a result of
changes in one of the following:
(a)Acceptable fee range.
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(b)Project conditions.
(c)Scope of management services.
e.Each time Loan/Asset Management staff approve a rent increase for
these projects, the following steps must be taken.
(1)Recompute the residential fee percentage using the formula
below.
============================================================
Revised Residential
Management Fee %
Capped PUPM Fee Yield x No. of Units
_________________________________________
Collections Percentage x New Monthly
(Standard = 95%)
Rent Potential
============================================================
(2)Highlight the adjusted residential management fee percentage
in the letter approving the rent increase. Require this
adjustment to be effective on the date on which the rent
increase takes effect.
(3)Enter the following items on the last page of the Management
Certification.
(a)Effective date of the rent increase/management fee
adjustment.
(b)New monthly rent potential.
(c)Collections percentage assumed.
(d)Adjusted management fee percentage.
(4)An owner/agent of a project where HUD has capped the fee
yield as provided above may request that HUD reconsider the
fee at any time. Loan/Asset Management staff must perform
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such a review up-front, even if the project would otherwise
be eligible for an after-the-fact review.
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f.Commercial and miscellaneous income percentage fees remain
subject to the reasonableness criteria discussed in paragraph
3.12.
____________________________________________________________
REMINDER: Commercial and miscellaneous income
percentage fees cannot exceed the residential fee
percentage. If the residential fee percentage is reduced
to maintain the capped fee yield, the commercial and
miscellaneous income percentage fees must be reduced
accordingly.
____________________________________________________________
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
4381.5 REV-2
___________________________________________________________________________
CHAPTER FOUR
WORKING WITH RESIDENTS
4.1
GENERAL
HUD expects owners and their management agents to build good resident/
management relations. The participation and cooperation of residents
is important in creating a suitable living environment and can
contribute to the successful operation of these properties. For
example, resident involvement can help maintain the physical condition
of the property, ensure proper maintenance, improve security,
contribute to improvements in energy efficiency, and control operating
costs.
HUD regulations establish several basic requirements that owners and
their management agents must abide by with respect to resident
involvement. HUD views these requirements as minimum standards for
resident participation and encourages owners and agents to take
further steps to foster strong resident/management relations.
4.2
APPLICABILITY
The requirements regarding resident participation presented in this
chapter apply to all HUD-insured and HUD-assisted projects with the
exception of the resident input provision described in paragraph 4.5,
which applies only to projects receiving project-based assistance.
4.3
DEVELOPING A COLLABORATIVE RELATIONSHIP
a.Residents and resident organizations can be invaluable allies for
owners/agents and should be given the opportunity to voice their
views and concerns. Toward this end, HUD encourages owners/
agents to go beyond the minimum requirements for resident
involvement and take the following steps.
(1)Foster Enhanced Communication Between Residents and Both
On-Site and Central Office Management. Owners/agents are
encouraged to request constructive comments and suggestions
from residents. Resident suggestions often reveal
cost-effective ways to reduce maintenance problems or
improve security at the property.
(2)Increase Resident Access to Management.
Steps that give
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residents greater access to managers help encourage resident
input and increase
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the likelihood that owners/agents will find out about
problems before they become severe.
(3)Ensure that Proper Consideration and Acknowledgement to
Resident Input is Given. When residents offer their input,
they need to know that their input is taken seriously or
they will often stop contributing their comments.
Owners/agents are encouraged to follow up with residents to
show them that their views were considered.
(4)Emphasize the Importance of Promptly Resolving Problems.
Encouraging on-site staff to respond to resident complaints
promptly will send the message that responding to resident
concerns is important. Owners/agents can help ensure that
the people who have regular interaction with residents are
aware of these issues and understand that the owner/agent
takes these concerns seriously. Toward this end,
owners/agents should establish a system to track resident
complaints/service requests and communicate resident
concerns to all on-site staff.
4.4
RESIDENT INPUT REGARDING OWNER REQUESTS TO HUD
a.When seeking HUD approval for certain actions, HUD regulations
(24 CFR, Part 245) require owners of projects receiving
project-based assistance to show that they have notified
residents in the affected project of the proposed action and
solicited resident input regarding the impact of this action.
Resident notification and comment is required when an owner will
request any of the following actions:
(1)Increase in maximum permissible rents.
(2)Conversion from project-paid utilities to resident-paid
utilities, or a reduction in resident utility allowances.
(3)Conversion of residential units to non-residential use, or
to cooperative housing or condominiums.
(4)Partial release of mortgage security.
(5)Major capital additions.
(6)Additional resident subsidy or funding under the Flexible
Subsidy program.
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4381.5 REV-2
___________________________________________________________________________
The specific procedures necessary to comply with resident
notification and comment requirements can be found in the
documents that provide guidance on preparing requests for HUD
approval of any of these actions. Additional resident notice
requirements apply to project receiving LIHPRHA funding. These
requirements are covered in HUD Handbook 4350.6.
b.Owners/agents must make copies of the following documents
available to designated resident association representatives upon
request.
(1)HUD's completed Physical Inspection and Management Review
reports.
(2)Owner/agent's proposed MIO Plan and funding strategy.
(3)HUD non-compliance notices to the owner and the owner's
response.
(4)HUD declaration of default, MIP action, or other sanctions.
(5)Applications by the owner for HUD assistance or HUD
approval.
c.The owner is ultimately responsible for meeting resident
notifications and comment requirements. However, management
agents are expected to comply with these requirements to the
extent that they are obligated to perform this function as a
condition of their management contract and, in any event, to make
their best effort to follow resident notification and comment
procedures. HUD regulations regarding resident input also
establish that owners and their agents must not take any actions
that would hinder proper notification or resident input.
d.HUD will respond in writing within 30 days to written comments
submitted by a legitimate, independent resident association
regarding proposed owner actions requiring HUD approval.
Resident association representatives may request a meeting with
Area Office representatives, prior to any final action by HUD on
such owner/agent requests.
4.5
RESIDENT EFFORTS TO OBTAIN ASSISTANCE
a.Residents Seeking Assistance
Owners/agents may not interfere with the efforts of residents to
obtain rent subsidies or other public assistance (24 CFR, Part
245.205). For example, owners/agents may not reject residents
during the screening process solely because they receive public
assistance or hold a Section 8 Rental Certificate or Rental
Voucher.
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b.Rental Assistance for Existing Residents
(1)Owners/agents must provide in-place residents with
information regarding rent subsidies and other public
assistance that is prepared by HUD and sent to the project
for distribution to residents (24 CFR, Part 245.210).
(2)Owners/agents of properties with rent supplement, RAP, and
Loan Management Set-Aside HAP contracts may not refuse to
make assistance available to existing residents who are
eligible if sufficient funding and units are available.
Existing residents who are eligible for assistance may, at
the option of the owner, receive priority over applicants on
the property's waiting list (24 CFR, Part 245.205).
4.6
RELATIONS WITH RESIDENT ORGANIZATIONS
a.Recognizing Resident Organizations and Their Efforts
HUD expects owners/agents to recognize legitimate resident
organizations which meet regularly, operate democratically, are
representative of all residents in the development, and are
independent of non-resident owners and management agents.
Owners/agents may not impede the reasonable efforts of residents
to organize or activities of resident organizations to reasonably
represent resident interests (24 CFR, Part 245.105).
b.Meeting Space for Resident Organizations
(1)Owners/agents are expected to provide an accessible meeting
space within the premises of the development for legitimate
resident associations to hold meetings.
(2)Owners/agents may not unreasonably withhold the use of
community rooms or other available space within the project
when requested by:
(a)A resident organization in connection with the
representational functions of the organization; or
(b)Residents seeking to organize or to collectively
consider any matter pertaining to the operation of the
project (24 CFR, Part 245.110).
(3)The following restrictions apply to fees for resident use of
community rooms.
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(a)In projects subject to budget-based rent reviews,
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owners/agents may not charge residents a fee for the
use of such rooms.
(b)For all other projects, owners/agents may charge
residents a fee for the use of these facilities only if
a fee is normally charged for the use of such space.
If owners/agents do not normally charge a fee for such
facilities, they may not charge resident organizations
for the use of this space (24 CFR, Part 245.110). HUD
does not approve the fees for such facilities
4.7
ADDRESSING RESIDENT SERVICE REQUESTS/COMPLAINTS
a.Owner/Agent Responsibility. HUD expects owners/agents to respond
to valid resident requests involving concerns about conditions or
quality of life at the project, and to resolve all significant or
recurring problems.
(1)Whenever possible, owner/agents should take immediate action
to address problems or concerns registered by residents.
(2)Owners/agents should provide a copy of any written request
or complaint received from a resident or resident
association to the person filing the request/complaint.
b.HUD's Response to Notice of Resident Concerns/Complaints.
HUD will monitor the level of consideration given to resident
concerns, it will not become intricately involved in the
resolution of routine complaints.
While
(1)If HUD receives a complaint from a resident, Loan/Asset
Management staff will notify the owner/agent of the problem.
Upon notification of a complaint, owners/agents should take
immediate action to address the problem. HUD may require
the owner/agent to provide information about the resolution
of the problem.
(2)If HUD discovers an ongoing high level of resident
complaints over several months, Loan/Asset Management staff
should perform a nonscheduled management review of the
project's operations.
c.Developing and Implementing A "Service Request" System.
While most good management companies have an effective work order
system in place for addressing tenant concerns, this section
details a recommended outline for those agents who do not have
such a system in place and are in the process of developing one.
NOTE:
(1)Resident requests involving concerns or problem conditions
at a project are often referred to as "resident complaints."
HUD encourages
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owners/agents to take a positive, customer service approach
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in addressing resident concerns. One action that
owners/agents can take is to develop and implement a
"Service Request" system for processing and responding to
resident concerns.
(2)Exhibit 4-1 at the end of the chapter contains a sample
"Resident Service Request" form that could be used as part
of such a system.
(3)Owner/agent adoption of a Service Request system is strictly
voluntary.
d.Special Consideration Given to Projects Using Service Request
Systems. Proper use of a Service Request system reflects a
commitment by the owner/agent to respond effectively to resident
concerns.
(1)Owners/agents who implement an acceptable Service Request
system can receive the following considerations from HUD.
It should provide enough flexibility for residents to either
write or phone in their concerns.
(a)HUD will not become involved in situations involving
resident complaints (with the exception of immediate
health and safety threats) until the owner/agent has
had 30 days from the date of the resident's service
request to present a written response to the concern.
(b)HUD would consider evidence of proper implementation of
a Service Request system as a strong positive factor
when rating the agent's resident/management relations
during management reviews.
(2)To receive the considerations outlined above, owners/agents
must take the following steps.
(a)Notify HUD in writing that the agent is implementing a
Service Request system that meets HUD's standards. The
written notice should include:
1)a description of the procedures used to implement
the system;
2)a copy of the Service Request form to be used by
residents; and
3)a description of the steps taken to obtain
resident input regarding the design of the system
and a summary of their comments and suggestions.
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(b)Maintain records on-site showing the disposition of service
requests received during the past three months and any
outstanding or unresolved requests.
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e.Failure to Address Resident Complaints. Owner/agent failure to
respond timely to valid resident complaints will be noted during
management reviews. Both the agent and the owner will be
notified of failure to address resident complaints. A lack of
consideration for resident concerns and poor response to resident
complaints could result in a lower overall rating on a management
review. Poor ratings can affect owner/agent participation in HUD
programs.
4.8
HUD OVERSIGHT
a.HUD Response to Tenant Complaints. Loan/Asset Management staff
are expected to ensure that owners/agents are responding to
resident concerns.
(1)Loan/Asset Management staff should have a system in place to
formally notify management agents and/or owners when a
resident complaint is received. Valid resident complaints
forwarded by other agencies, as well as those discovered
during on-site reviews or sent directly to HUD, should be
addressed by Loan/Asset Management staff. In the event
Loan/Asset Management staff believe an owner/agent is not
responding to resident complaints, they should conduct an
on-site review to assess the situation and take appropriate
action to ensure that identified problems are addressed.
(2)If a complaint appears to involve discrimination, Loan/Asset
Management staff must contact Fair Housing and Equal
Opportunity staff for guidance on how to proceed. Initial
requests for guidance from FHEO should be made in writing
and describe the basic allegation(s).
(3)Loan/Asset Management staff should consult with the Resident
Initiatives Specialist (RIS) regarding resident/management
relations at the project and the circumstances surrounding
resident complaints.
(4)Repetitive complaints, including complaints regarding
harassment of residents or residents associations who
attempt to exercise their rights, should be viewed as an
indicator that the project may be in trouble. In the event
that Loan/Asset Management staff believe an owner/agent is
not responding to resident complaints, they should conduct
an on-site review to assess the situation and take
appropriate action to ensure that identified problems are
addressed.
Note:When HUD's automated Early Warning System becomes
available, Loan/Asset Management staff should use
the system
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to aid in performing monitoring and follow-up
activities concerning resident/management relations.
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(5)A great deal of judgement is involved in separating routine
from non-routine complaints. The Director of Housing for
the Area Office should be consulted if Loan/Asset Management
staff require guidance in this area.
(6)There are certain circumstances where Loan/Asset Management
staff should not become actively involved in resolving a
problem. Loan/Asset Management staff should refrain from
involvement in:
(a)Disputes involving third parties;
(b)Suits brought by residents against owners/agents, or
vice versa;
(c)Eviction matters; and
(d)Interpretations of local laws and ordinances.
b.Assessing Resident/Management Relations During Management
Reviews. The management review form (Form HUD-9834) includes a
section for rating resident/management relations.
(1)To develop this rating, Loan/Asset Management staff are
encouraged to meet with representatives of residents in the
property to obtain their views of resident/management
relations. Loan/Asset Management staff should also visit
units chosen for review by the resident organization and the
management agent, as well as randomly selected units. Loan/
Asset Management staff should ask the Resident Initiative
Specialist for the project to comment on resident/management
relations and provide input regarding the rating. Chapter 6
of HUD Handbook 4350.1 provides specific instructions for
completing a management review and discusses the procedures
for rating resident/management relations.
(2)Loan/Asset Management staff must also determine whether the
agent is responding to valid resident complaints. Resident
complaints that correspond to one of the following
conditions must be addressed promptly by the agent.
(a)The resident's rights as established by the lease or
described in the HUD Resident Rights and
Responsibilities brochure have been violated;
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(b)The physical condition of the property violated HQS
requirements;
(c)The owner/agent has failed to properly carry out its
management responsibilities; or
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(d)The owner/agent has engaged in one or more of actions
that constitute harassment of residents or resident
associations attempting to exercise their rights as
described in paragraph 4.8d below.
(3)Loan/Asset Management staff should give a less than
acceptable rating on the resident/management relations
section of the management review to owners/agents who fail
to show that they are responding effectively to legitimate
resident concerns or who fail to address resident
complaints.
(4)In cases where an owner/agent has shown continued failure to
respond to valid resident complaints, Loan/Asset Management
staff should establish a reasonable time period for the
owner/agent to address these complaints and recommend
actions that could be taken to adequately respond to the
complaints. The nature of the complaints will govern the
type of actions to be taken.
(5)If the owner/agent fails to adequately respond to the
outstanding resident complaints within the time period set
by the Area Office, Loan/Asset Management staff should
consider implementing sanctions against the agent and/or
owner in accordance with the procedures in Chapter Seven.
d.Impediments to Residents or Resident Associations Attempting to
Exercise Their Rights.
(1)The following actions by owners/agents constitute
impediments to residents or resident associations attempting
to exercise their rights.
(i)Unreasonable denial of accessible meeting space to
residents.
(ii)Repeatedly sending management representatives to
resident meetings when residents have requested
management not to attend.
(iii)Evicting, threatening to evict, withholding
entitlements, or otherwise penalizing residents
for organizing or asserting their rights.
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(iv)Attempting to adversely influence resident leaders by
offering individual inducements such as employment,
preferential transfers, rent abatements, favored
repairs, or other benefits not available to all
residents in the development.
(v)Attempting to form a competing resident organization
under the control of the management company or the
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owner.
(vi)
Sexual harassment of residents by owners/agents.
(2) Management employees may not run for elected office in the
residents organization. (NOTE: Coop owners who are also employees of the
management company are not subject to this restriction.)
(3) HUD considers any of the above actions taken by
owners/agents to be a violation of residents' right to organize and assert
individual rights.
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Exhibit 4-1
SAMPLE RESIDENT SERVICE REQUEST FORM
Name:
___________________________________________Apartment:
Phone: _____________________
Type of Request: ____ Maintenance Problems
____ Neighbor Issu
____ Management St
Concerns
____ Other________
Please provide a detailed description of your request:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Please attach additional sheet of paper if necessary.
Received by:
_____________________________
Management Agent Representati
Date: _______________________
Owner/Agent Response:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
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___________________________________________________________________________
Signed
by: _______________________________________
Owner/Agent
Date:________________
___________________________________________________________________________
4-1112/94
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4381.5 REV-2
CHG-2
CHAPTER FIVE:
ENCOURAGING TRAINING AND EMPLOYMENT OPPORTUNITIES
5.1
GENERAL
HUD encourages and, in some instances, requires recipients
of HUD assistance to facilitate training and employment
opportunities for low income residents of assisted housing
as well as residents and business in the project area and
women- and minority-owned business.
5.2
SECTION 3 (EMPLOYMENT, TRAINING AND CONTRACTING
OPPORTUNITIES FOR PROJECT AREA RESIDENTS AND BUSINESSES) RESERVED
For a discussion of Section 3 objectives and requirements,
see the implementing regulations at 24 CFR 135 and HUD
Handbook 8023.1, Implementation of Section 3 of the Housing
and Urban Development Act of 1968.
5.3
ENCOURAGING PARTICIPATION OF WOMEN- AND MINORITY-OWNED
BUSINESSES
a.
b.
HUD encourages participation of women and minority-owned enterprises
(W/MBEs) in the activities of HUD programs.
(1)
Management agents (in the Management
Certification) and Owners (in applicable contracts
and regulatory agreements) agree to work and take
affirmative steps to make W/MBEs aware of
contracting opportunities.
(2)
Owners and management agents should attempt to
obtain at least one bid from a W/MBE when
soliciting services for HUD-insured or HUD-assisted
properties through a competitive process.
(3)
Owners and managers also should consider
employment opportunities under Neighborhood
Networks (see Chapter 9 of this Handbook).
Owners and managers should consider the outreach
activities described below to encourage the
participation of women- and minority-owned businesses.
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5.4
(1)
Identify and maintain an inventory of certified
W/MBEs, their capabilities, services and/or
products.
(2)
Use local media to market and promote contract and
business opportunities with W/MBEs.
(3)
Develop written material (fact sheets, procurement
forecasts, etc.) on contracting opportunities.
(4)
Sponsor and/or participate in business opportunity
meetings, conferences, seminars to promote
opportunities for W/MBEs.
(5)
Develop procurement procedures that facilitate
opportunities for W/MBEs to participate. For
example, if possible and economically feasible,
solicit services and products in quantities that
make it feasible for small W/MBEs to participate.
TELECOMMUNICATIONS SERVICES
a.
GENERAL.
The Department supports owners of HUD's multifamily
insured and assisted housing projects contracting with
providers who offer project residents various
alternative telephone, cable or satellite television,
information and security systems.
b.
BACKGROUND.
Several telecommunications companies have approached
project owners of HUD's assisted and insured
multifamily housing projects to provide the project
residents with various alternative telephone, cable or
satellite television, information and security systems.
In these proposals, the providers typically propose
installing all necessary equipment on the project site
at no cost to the project and, in some cases, returning
a portion of the subscriber fees paid by tenants for
the services to the project as project income.
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These benefits are provided to the project in return
for an exclusive agreement for providing such services
as an alternative to those available through local
telephone and cable television companies.
Additionally, some proposals offer coordination through
a third-party entity who would arrange the agreements
between service providers and, possibly, multiple
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project owners.
The Department supports all these arrangements,
especially since they may bring a higher level of
service to our low-income communities in a more
competitive atmosphere, offer avenues to training and
jobs, possibly increasing project revenues, and
producing more marketability for the project.
c.
REQUIREMENTS.
The following features must be addressed or included in
each arrangement or contract. Documents must be
submitted to the asset management staff of the
appropriate HUD field office or State HFA office, as
appropriate.
(1)
Owner Action/Considerations Prior to Agreement:
(i)
Project owners shall notify residents of the
proposed agreement/contract and solicit their
input.
(ii) Project owners may do a preliminary review of
the types of services available in their area
to obtain a wide range of services at
competitive prices.
(2)
Contracts or Agreement Contents:
Each contract/agreement must specifically address
the following points:
(i)
General Contractual Stipulations:
(a)
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(b)
HUD property cannot be encumbered by a
service provider without prior HUD field
office approval.
(ii) The Equipment or System:
(a)
All costs for installation, operation,
maintenance, repair and upgrading are
borne by the provider.
(b)
Equipment remains the sole property of
the provider and shall not be deemed to
constitute part of the property, or
otherwise encumber the property.
(c)
The project may provide electrical power
to the system, as long as there is no
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significant negative effect on the
project's operating budget.
(iii)
Resident Service Subscriptions:
(a)
Are strictly voluntary by project
residents.
(b)
Must be paid by the residents directly
to the service provider, NOT through
project management. Said service can
not be part of the rent or rent
structure.
Any excess fees must be returned
directly to the subscribers by the
provider. Such fees may NOT revert to
the owning entity or the management
agent.
(c)
3.
Must not include fees in excess of the
amount ordinarily paid for such service
in the area. Note: The fees are not
part of, or compensated from the
management agent fee.
ITEMS FOR CONSIDERATION - PROVIDER.
(i)
In certain cases, providers may want to
station their staff on-site to act as sales
or marketing personnel. Project owners can
consider such an arrangement acceptable,
subject to HUD's review and approval.
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However, these staff must be separate from
management agent staff, and compensation from
the provider cannot be a part of, or paid by
HUD's management fee.
(ii) Providers may wish to do a feasibility study
to determine if such an arrangement would be
beneficial to them.
d.
SUBMISSION/HUD REVIEW.
Any contract/agreement must be submitted to the HUD
field office servicing the project or review and
approval prior to execution.
(1)
The HUD review should focus particularly on issues
regarding any effect on the project's income and
expenses, the Regulatory Agreement and mortgage,
and on any arrangements using project management
staff as representatives or agents of the service
provider.
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The Multifamily Director should determine which
field staff are involved in the review, depending
on the issues of concern.
HUD MONITORING AND ASSISTANCE
a.
Monitoring.
FHEO staff have the primary responsibility for
monitoring compliance with these requirements.
b.
HUD Assistance.
(1)
FHEO maintains an automated registry of Section 3
businesses which is available for use by owners
and managers.
(2)
HUD's Office of Asset Management and Property
Disposition works to maintain information about
training and employment opportunities for
residents and can share this information with
owners and managers.
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4381.5 REV-2
___________________________________________________________________________
CHAPTER SIX:
PROGRAM MONITORING
SECTION 1:
6.1
INTRODUCTION
GENERAL
This chapter provides basic guidance on monitoring management agent
activities to ensure that program requirements and procedures are
followed. It specifically focuses on how to apply HUD's monitoring
strategy in reviewing management agent performance. Where specific
instructions for carrying out individual monitoring activities are
provided in other HUD Handbooks, these documents are referenced.
6.2
OVERVIEW OF MONITORING ACTIVITIES
a.Types of Monitoring Activities.
monitoring activities.
There are three basic types of
(1)Physical Inspections. To assure that properties provide
decent, safe, and sanitary housing, HUD regularly inspects
the physical condition of all HUD-insured and HUD-assisted
projects. Section 2 of this chapter discusses the use of
physical inspections to monitor property conditions.
(2)Management Reviews. HUD also conducts on-site visits to
review the management of HUD-insured and HUD-assisted
properties. Key management areas, such as occupancy
practices and on-site recordkeeping, are examined to ensure
that program requirements and procedures are properly
followed. Section 3 of this chapter describes the use of
management reviews in more detail.
(3)Financial Reviews. The financial management of HUD projects
is also regularly monitored. HUD staff review financial
statements and other documents to ensure that project funds
are handled properly. Financial reviews are discussed in
Section 4 of this chapter.
In addition to these regular monitoring activities, HUD will
check that owners/agents comply with all elements of rental
assistance contracts (e.g., HAP Contract) or Regulatory
Agreements governing the property that are not included as part
of the above reviews. These activities are outlined in Section 5
of this chapter.
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b.Applicability. The responsibility for carrying out individual
monitoring activities varies by activity and the type of project.
The responsibility for performing each type of review is
discussed in the sections below as part of the description of
each activity.
6.3
MONITORING GOALS
Broadly speaking, HUD's monitoring goal is to ensure the success of
its statutory mission to provide decent, safe, and sanitary housing.
Management agents and owners, as HUD's partners in this effort, each
have responsibilities in fulfilling this mission.
More narrowly, HUD seeks to protect the Department's interest as the
insurer of project mortgages and as the regulator of millions of
dollars in physical assets. HUD has a Congressional mandate to
oversee the provision of physically and fiscally sound housing, and to
protect the integrity of the resources that underwrite its production.
Last, HUD has a statutory obligation to monitor compliance with
housing program requirements as set out in rental assistance contracts
and Regulatory Agreements. Fulfillment of this goal requires HUD to
directly oversee owners' and management agents' activities through
periodic management, project, and documentation reviews. Within this
review process, HUD seeks to work objectively and in a professional
manner to identify strengths and weaknesses in project management, to
communicate findings openly with the owner and management agent, and
to find mutually acceptable solutions to management problems.
Monitoring and enforcing program compliance is a responsibility that
HUD takes very seriously. HUD also recognizes that this
responsibility is a component of its overall partnership with owners
and management agents in providing affordable housing. In carrying
out its monitoring activities, HUD will simply seek to assure that
owners and agents are fulfilling their responsibilities and at the
same time will respect the contribution of its partners.
6.4
HUD'S MONITORING STRATEGY
To guide its monitoring activities, HUD uses a strategy known as
accountability monitoring. Under this strategy, HUD focuses the
majority of it's monitoring efforts on program participants who pose
the greatest risk to HUD's mission.
6.5
IMPLEMENTING ACCOUNTABILITY MONITORING
a.Monitoring Based on Risk. Decisions regarding monitoring reviews
and resources are made using a risk management process which
determines both
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the participants and areas to be reviewed based on the risk posed
to HUD's objectives. Under this approach, the frequency and
intensiveness of monitoring reviews increases as the risk posed
by a project or participant increase.
b.Monitoring Schedule. Schedules for monitoring activities will be
based on an assessment of the risks posed by projects within a
jurisdiction. A risk rating system has been developed to guide
the scheduling of monitoring activities. The rating system to be
used to schedule physical inspections (see paragraph 6.12) is
also used in scheduling other monitoring reviews.
(1)In developing
Management staff should schedule
top of these ratings earliest in
the potential need for follow-up
their monitoring schedules, Loan/Asset
projects that fall near the
the schedule and consider
reviews.
(2)Projects that pose lower risks should be scheduled after
higher risk properties.
c.Interrelationship of Monitoring Reviews. Although each type of
review is discussed separately, Loan/Asset Management staff
should conduct each review with an eye toward overall
performance. For example:
omany contract monitoring requirements directly overlap with
the financial review and management review requirements; and
omanagement reviews contain most of the steps required to
complete a financial review.
Loan/Asset Management staff not only need to complete an
individual monitoring activity, but also recognize the
implications of a finding in a particular area for other
functional areas, as well as for the project overall. The
following guidelines apply in all cases:
(1)Risk Assessment. After identifying the goal of their review
procedures, Loan/Asset Management staff should use their
knowledge of project conditions to identify and focus their
attention on higher-risk items. It is more efficient to
concentrate on areas where problems have been identified,
even at the risk of neglecting lower-risk areas, than to
spend equal time on all issues and not adequately cover the
highest-risk issues.
(2)Trend Analysis. Individual findings should be viewed in the
context of the project as a whole. Loan/Asset Management
staff should try to look "behind" an individual finding to
see if its cause lies elsewhere or is having a larger
effect. For example, if cash management controls are weak,
the problem may lie in the management agent's training
policies.
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Or, if a project is in poor physical condition, a reviewer
should consider whether its Replacement Reserve Account is
managed properly.
(3)Portfolio Analysis. Loan/Asset Management staff should
evaluate a management agent's performance by looking at all
projects that the agent manages, not simply at the project
currently under review. A pattern of findings at other
projects might suggest that a control weakness exists in the
project currently under review.
d.Adapting to Changing Conditions. Monitoring schedules should be
flexible to allow for periodic revisions based on changes in
monitoring objectives and available resources. For example, the
discovery of a series of unanticipated compliance problems during
the course of monitoring reviews may require Loan/Asset
Management staff to revise the monitoring schedule to account for
the presence of a previously unknown problem.
6.6
WHEN TO PERFORM NON-SCHEDULED REVIEWS
While individual monitoring techniques can follow different schedules,
there are situations where one or more reviews is immediately
appropriate. Loan/Asset Management staff should recognize that they
can and should use any of the monitoring activities discussed in
paragraph 6.2 when the need arises. The following paragraph outlines
situations in which each monitoring technique is appropriate. HUD
Handbook 4350.1 provides more detailed guidelines for using each of
these techniques.
a.Physical Inspections. Physical inspections should be performed
as soon as possible once the Loan/Asset Management staff
determine that a project is troubled or potentially troubled (see
Exhibit 6-1). Such projects are characterized by:
(1)Physical deterioration or specific substandard conditions
identified by a legitimate, representative resident
organization;
(2)Evidence of drug use, drug sales, or other criminal
activities;
(3)Financial stress; and/or
(4)A high level of significant resident complaints.
The Loan/Asset Management staff should also inspect the project
if it determines that the mortgagee inspection is inadequate or
if the project requests additional HUD financial assistance.
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b.Management Reviews. When physical inspections are required for
any of the reasons listed in paragraph (a), a management review
should also be performed. Loan/Asset Management staff may also
perform a management review when a physical inspection is not
necessary, but there is evidence of:
(1)Poor accounting, budgeting, and/or cost controls;
(2)Failure to submit required periodic reports, including
vouchers, in a complete and timely manner;
(3)Low rent collection or high accounts receivables;
(4)Complaints about or evidence of poor procedures for resident
screening and selection;
(5)High vacancy rates or turnover;
(6)Specific and verifiable evidence of project mismanagement or
harassment of residents or resident associations reported by
petition from a legitimate resident association;
(7)Other staffing/supervisory failures; and/or
(8)A high level of significant resident complaints.
c.Financial Reviews. Financial reviews should be performed when
the project management does not submit fiscal reports in a timely
manner. For example, a financial review is appropriate when
there are frequent requests for Section 8 special claims or
Reserve for Replacement withdrawals. The Loan/Asset Management
staff should also conduct a financial review if rent collections
are below expected levels and accounts receivables are
excessively high.
d.Resident File Reviews. Resident file reviews are conducted as
part of an on-site review to verify that the project manager is
complying with HUD resident screening selection, and other
occupancy policies. If remote monitoring suggests occupancy
problems at any project that the agent manages, Loan/Asset
Management staff should review a sample of files to assess the
extent of the problem and determine appropriate corrective
actions.
6.7
MONITORING LOBBYING ACTIVITIES
a.Pursuant to Section 319 of Public Law 101-121, all mortgagees,
mortgagors, and their agents participating in any multifamily,
assisted housing, or coinsurance program under Title II of the
National Housing Act are required to submit certifications and
disclosures regarding their lobbying activities.
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(1)The certification states that the recipient of
federally-appropriated funds does not, has not, and will not
use those funds for lobbying purposes.
(2)The disclosure form (Standard Form-LLL) reports any payments
made or agreement to make any payment from funds other than
federally-appropriated funds for the purpose of influencing
or attempting to influence any Executive of Legislative
personnel in connection with the award of HUD contracts,
grants, cooperative agreements, loans, or other form of
assistance.
b.Applicability. The certification and disclosure requirements are
triggered when contracts or grants exceeding $100,000 and loans
or commitments exceeding $150,000 are made. However, any attempt
to influence federal agency actions through the use of
federally-appropriated funds to this end is prohibited and such
actions which come to the attention of HUD staff must be reported
to the Office of Ethics.
c.Submission Requirements
(1)The Area Office is required to provide each applicant for an
insured/coinsured mortgage commitment or for other federal
assistance (e.g., contract, grant, loan, etc.) with the
standard certification and disclosure language, and a
Standard Form-LLL to report lobbying activities.
(2)When applicable, sponsors, mortgagors, and mortgagees must
submit certifications and disclosure forms in conjunction
with the following documents:
(a)Mortgage insurance application at any stage -HUD-92013, 92013-Hosp, 92013-NHICF, or HUD-93201, as
appropriate;
(b)Cost Certification forms HUD-92330 or FHA-2205A;
(c)Request for Final Endorsement of Credit Instrument -FHA-2023;
(d)Applications for Flexible Subsidy assistance;
(e)Requests for Loan Management Set-Aside assistance; and
(f)Applications for drug grants and other forms of
competitive awards.
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d.HUD Processing
(1)The Loan/Asset Management staff will review each
certification and disclosure for completeness prior to
issuing any commitment or award of insurance or financial
assistance
(2)The Area Office will send the original of any disclosure
form (Standard Form-LLL) immediately to the Office of Ethics
in Headquarters and will retain a copy in the application,
project, or program file.
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SECTION 2:
6.8
PHYSICAL INSPECTIONS
HUD'S PHYSICAL INSPECTION PROGRAM
Well-maintained projects are central to HUD's mission of providing
decent, safe, and sanitary housing. HUD will not accept deteriorated
conditions in housing under its jurisdiction.
a.Purposes.
A comprehensive inspection program:
(1)Verifies the quality of housing provided to residents and
enables Loan/Asset Management staff to identify and correct
problems in project conditions and maintenance.
(2)Serves as a control for the quality of mortgagees'
inspections of projects.
(3)Helps to safeguard the integrity of the FHA Insurance Fund
for HUD-insured and HUD-held projects.
b.Annual Inspections. The Loan/Asset Management staff is
responsible for ensuring that all multifamily projects under
HUD's jurisdiction are inspected yearly by HUD, a designated
Contract Administrator, a HUD-selected contractor, or by the
mortgagee. Loan/Asset Management staff should follow the
procedures set forth in Chapter 6 of HUD Handbook 4350.1 for
performing inspections of insured and non-insured projects where
HUD is the Contract Administrator.
c.Additional Funding or Funding Changes. Before approving
additional HUD funding or changes to HUD funding arrangements, a
physical inspection must be conducted if the most recent
inspection is more than 12 months old. Examples of additional
funding or funding changes include:
(1)receiving additional LMSA units;
(2)awarding Flexible Subsidy funding;
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(3)awarding Service Coordinator funding; or
(4)conversion of a Rent Supplement contract to a Section 8
contract.
NOTE: Section 8 budget authority amendments are not considered
additional HUD funding
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6.9
MORTGAGEE AND CONTRACT ADMINISTRATOR INSPECTIONS
a.Mortgagee Inspections. The Loan/Asset Management staff must
ensure that mortgagees comply with the procedures outlined in the
Mortgagee Monitoring Handbook (HUD Handbook 4350.4), which sets
forth the requirements for mortgagees to complete physical
inspections.
(1)Loan/Asset Management staff must establish a tracking and
quality control system for mortgagee physical inspections.
(2)Loan/Asset Management staff must inspect a portion of the
portfolio sufficient to evaluate the reliability of
mortgagee physical inspections and to follow up where a
mortgagee inspection or other indicator identifies a project
as troubled or potentially troubled.
b.Contract Administrator Inspections. For projects with an entity
other than HUD serving as the contract administrator, Loan/Asset
Management staff must ensure that the administrator is performing
physical inspections. Loan/Asset Management staff must also
ensure that the physical integrity of the property is being
maintained as required in the applicable rental assistance
contract and under HUD Handbook 4350.5, Subsidy Contract
Administration.
(1)Loan/Asset Management staff must establish procedures for
ensuring that contract administrators are conducting
physical inspections as required.
(2)Loan/Asset Management staff must inspect a portion of the
portfolio sufficient to evaluate the reliability of contract
administrator physical inspections and to follow up where
such inspections or other indicators identify a project as
troubled or potentially troubled.
For more detailed instruction, see HUD Handbook 4350.5.
6.10 USE OF CONTRACTORS
Area Offices must not use contractors to conduct Physical Inspections
for projects with HUD-insured and HUD-held mortgages which are
troubled projects. Area Offices may use contractors to inspect only
the remaining portion of the insured and HUD-held portfolio which HUD
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staff did not inspect during the year.
a.Contracting and Payment.
from the FHA Insurance Fund.
Contractors will be paid with fee money
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b.Resource Utilization Strategy. Area Offices should include in
their resource utilization strategy the staff required to oversee
and review contract physical inspections.
6.11 INSPECTION STANDARDS
a.Housing Quality Standards. At a minimum, all assisted units must
comply with Section 8 Housing Quality Standards (HQS) and/or
local housing codes, whichever are more stringent. However,
inspectors should expect management agents to maintain the
projects at physical conditions above these minimum maintenance
standards.
b.Serious vs. Non-serious Deficiencies. The Loan/Asset Management
staff must develop criteria for classifying physical deficiencies
as serious or non-serious. Criteria may include:
(1)Whether the repair need was judged as "immediate";
(2)Whether the deficiency poses a health and/or safety threat
to residents and/or project staff;
(3)The cost to repair the deficiency; and
(4)Any other criteria the Area Office reasonably deems
appropriate.
Serious deficiencies will serve as the basis for the Area Office
Manager's determination of technical default. See paragraph
6.19.
6.12 PRIORITIES FOR SCHEDULING PHYSICAL INSPECTIONS
a.The Loan/Asset Management staff should use the priorities
described in Figure 6-1 to schedule physical inspections.
Exhibit 6-1 at the end of this chapter provides additional
guidance on indicators of "troubled" or "potentially troubled"
status.
b.Within each priority area, identify and rank projects in the
worst condition. These projects should be targeted for physical
inspection first, followed by the remaining projects within that
category. Sources of information include: mortgagee
inspections, management review reports, previous physical
inspection reports, and resident complaints.
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=======================================================
FIGURE 6-1
PRIORITIES FOR HUD INSPECTIONS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Insured assisted troubled
HUD-held assisted troubled
Non-insured assisted troubled
Insured unassisted troubled
HUD-held unassisted troubled
Insured assisted potentially troubled
HUD-held assisted potentially troubled
Non-insured assisted potentially troubled
Insured unassisted potentially troubled
HUD-held unassisted potentially troubled
Insured assisted
HUD-held assisted
Non-insured assisted
Insured unassisted
HUD-held unassisted
=======================================================
6.13 CONDUCTING THE INSPECTION
a.Scope of Inspection.
Each physical inspection must include:
(1)A physical review of the inside and outside of projects'
housing units, buildings, grounds, commercial space, and
common areas for condition and maintenance.
(2)A visual check of all common areas (equipment rooms,
laundries, storage rooms, etc.).
(3)A review of at least 10 percent of the occupied units and
all vacant units. The Director of Multifamily Housing may
authorize or require a lesser or greater number of units to
be inspected, based on the number of units in the project,
to establish a reasonable sample size.
b.Identifying Deficiencies. For any identified deficiency, HUD
should work with owners/agents to estimate the cost of repairs in
order to provide as much useful information as possible to the
owner and/or management agent.
(1)Loan/Asset Management staff should conduct inspections of
troubled projects with the assistance of either the loan
servicer, a construction analyst, or an engineer who is
capable of determining the cost of the required repairs.
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(2)If this expertise is not readily available to the
Multifamily Housing staff, the Director of Multifamily
Housing and the Director of Housing shall coordinate to
provide either in-house resources or a third-party
contractor to produce the needed cost estimate.
c.Conducting Close-out Meeting
(1)The owner and manager must be notified of findings upon the
conclusion of the inspection so they can begin to address
the problems.
(2)Inspectors should stress that areas of concern identified
are not necessarily all-inclusive and that the final report
could include additional findings of deficiency based on the
analysis of the overall inspection.
6.14 DOCUMENTATION OF THE PHYSICAL INSPECTION AND FINDINGS
a.Format. The prescribed format for the documentation is the Form
HUD-9822, "Physical Inspection Report," included in Appendix 5.
b.Contents.
document:
The written report of the physical inspection should
(1)Detailed deficiency explanations, including locations of the
deficiencies and classification as "serious" or
"non-serious";
(2)Cost estimates for needed repairs;
(3)Recommended or required actions and time frames; and
(4)Overall conclusions on the physical condition of the
project.
c.Use of Photographs. Where practicable, inspectors should include
photographs with the Form HUD-9822 documentation to describe both
good and bad conditions. Any photographs used in the report
should be cross-referenced to their location in the report.
d.Report Conclusion. Each report must be signed, dated, and must
specify the recommended corrective actions specified by the
inspector. The report to the owner may summarize the
deficiencies, but Loan/Asset Management staff must retain
detailed descriptions of deficiencies and locations in the
project files for follow-up review.
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e.Time for Completion
(1)If HUD performs the inspection, HUD staff will prepare the
report once the field work is complete.
(2)If a contractor performs the inspection, the contractor must
deliver the report to the Area Office within the time frame
specified in its contract with HUD.
6.15 AREA OFFICE COUNSEL REVIEW
When inspection results reveal serious deficiencies, Loan/Asset
Management staff should submit the inspection documentation to Area
Office Counsel to determine whether the deficiency represents a
"waste" of assets or whether there has been a failure to maintain the
property in good repair. Area Office Counsel should provide the
program office with guidance regarding which documentation should be
retained.
See Handbook 4350.1 Chapter 6 for further instruction the on Area
Office Counsel review.
6.16 NOTIFICATION OF THE OWNER/MANAGEMENT AGENT
a.The Loan/Asset Management staff should send a completed physical
inspection report to the owner upon completion of the report by
HUD staff or contractors. Loan/Asset Management staff must also
send a copy of the report to the management agent and/or other
contacts identified by the owner.
b.The Area Office is not required to send any photographs with the
report unless such pictures are specifically referenced in the
report.
6.17 CORRECTIVE ACTION PLANS
Once HUD has notified the owner and management agent of the report's
findings, the owner/agent is expected to prepare a corrective action
plan to address any deficiencies. The Area Office shall not approve
the corrective action plan unless it provides for the final resolution
of all deficiencies.
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a.Time Frames for Owner Response
(1)When serious deficiencies are identified in the inspection
report, owners must:
(a)Meet with Loan/Asset Management staff within ten (10)
working days from the date of issuance of the report to
discuss the deficiencies identified during the
inspection, unless an alternate schedule is agreed upon
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by HUD staff and the owner.
(b)At this meeting, provide a written report on all
actions taken since the report was issued to correct
the deficiencies noted.
(c)Provide a commitment within 20 working days of the
meeting outlining how and when the remaining
deficiencies will be corrected and provide a written
plan for addressing these deficiencies within a time
frame agreed upon by the Area Office. The owner may
use the Management Improvement and Operating (MIO) Plan
format, and must include a budget identifying the
source of funds used to implement corrective actions.
See HUD Handbook 4355.1 REV-1, Flexible Subsidy, for a
description of the MIO Plan.
(2)For deficiencies identified as non-serious, owners are not
required to meet with the Loan/Asset Management staff.
However, they must submit a plan to resolve those
deficiencies within 30 calendar days of the date of the
receipt of the report. Owners will be subject to all
monitoring and enforcement actions outlined in this
Handbook, and in accordance with HUD Handbook 4350.1,
Chapter 6.
b.Required Contents
(1)Corrective action plans for insured projects, including
those submitted for non-serious deficiencies, must be
appropriately formulated and organized so that they can be
monitored in the Area Offices.
(2)The action plan must be well-considered and specific.
must include timetables for deficiency resolution and must
identify sources of funds necessary to bring the project to
an acceptable condition.
It
(a)If the project's cash flow is not sufficient, the owner
should provide a MIO plan covering how he/she proposes
to correct the problem or what savings he/she suggests.
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(b)The owner must make all reasonable efforts to secure
additional funding needed to implement corrective
actions.
(3)Where an owner requests increased HUD funding to pay for all
or part of the required repairs, the owner must present a
certification and supportive documentation that he/she has
made efforts to secure funding from non-HUD funding sources.
c.Area Office Counsel Review.
When serious deficiencies exist,
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Area Office Counsel must review the corrective action plan prior
to Loan/Asset Management staff approval. Area Office Counsel
will advise program staff on any legal issues raised within the
plans.
d.Corrective Action Plans for HUD-Held Projects will be included in
and made part of a workout plan,
6.18 MONITORING CORRECTIVE ACTION
a.Use of Monitoring Systems. If a monitoring system is not in
place, Loan/Asset Management staff in each Area Office will
develop a system to monitor planned and completed corrections.
The Early Warning System, when implemented, may aid in the
tracking of corrective plans.
b.Follow-Up Inspections
(1)Where serious deficiencies were identified during the
physical inspection, Loan/Asset Management staff shall
schedule a follow-up inspection within 30 days or less of
the meeting to assure satisfactory completion of all
corrections the owner indicates are completed.
(2)Follow-up inspections on completed tasks may be performed by
permanent staff, or by contract inspectors if the project is
HUD-insured or HUD-held.
(3)All follow-up inspections must be documented either through
a memorandum to the file or on a Form HUD-9822. Documents
must be clearly marked to show that the inspection is a
follow-up.
b.Addressing Noncompliance. Loan/Asset Management staff shall
notify the owner in the case of noncompliance with the plan.
(1)The owner must take remedial action immediately upon receipt
of notification and must provide an explanation of any
noncompliance. In addition, the owner must develop and
provide to the Area Office proposed revisions to the
corrective action plan.
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(2)The Loan/Asset Management staff will analyze any suggested
modifications to determine their feasibility and their
effect on the continued viability of the plan.
(3)If the Loan/Asset Management staff determine that the owner
and/or management agent is not making a good-faith effort to
bring the project into acceptable condition, or if the plan,
as revised, is no longer feasible, then they may impose
sanctions as described in Chapter 7 of this Handbook and, if
applicable, in accordance with Chapter 8, HUD Handbook
4350.1.
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6.19 TECHNICAL DEFAULTS
If the owner does not remedy noncompliance with the corrective action
plan and the physical condition of the property has fallen to an
unsatisfactory level, Loan/Asset Management staff must determine
whether to declare default under the clauses of the Regulatory
Agreement or under the waste provision of the mortgage.
a.Recommendation of Default. If the Director of Multifamily
Housing determines that a declaration of default is appropriate,
the Director of Housing has the authority to approve or
disapprove the recommendation.
b.Notification. If the Director of Housing accepts the Director of
Multifamily Housing's recommendation, the Loan/Asset Management
staff must notify the owner of the intended action by certified
mail with return receipt requested, and must send a copy of the
notification to the management agent.
(1)The notification must be reviewed by Area Office Counsel and
signed by the Director of Housing before being sent to the
owner. Area Office Counsel must review and concur on all
notices of intent and all subsequent correspondence to the
owner.
(2)The Loan/Asset Management staff must inform owners in the
notification that they will be given thirty calendar days to
show sufficient cause why the default should not be
declared, or otherwise to provide a new or revised
corrective action plan, or to carry out the previously
approved plan.
c.Extension of Notice. The Director of Housing may extend the time
frame for declaration of default for specific cause on a
case-by-case basis. The Director must document such cause for
the record.
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d.Declaration of Default. If the owner does not satisfactorily
show cause or comply with the Director of Housing's requests
regarding corrective actions within thirty days or the approved
time frame, the Area Office Counsel shall proceed with a written
request to the mortgagee to accelerate the principal balance of
the mortgage.
(1)For declarations of default under the waste provision of the
mortgage, the request shall require that, under the
authority provided the Secretary contained in 24 CFR
207.257, the mortgagee declare a Covenant Default and
accelerate the principal balance of the mortgage.
(2)For projects with HUD-held mortgages, the Director of
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Housing Management must request the Office of Mortgage
Insurance Accounting and Servicing (MIAS) to accelerate the
principal balance of the mortgage and to declare the balance
immediately due and payable.
(3)If the housing condition is below acceptable levels, but the
documentation or the problem does not support a declaration
of default based on the Regulatory Agreement or the waste
provision of the mortgage, HUD should determine the
advisability of initiating immediate litigation against the
owner. Civil penalties should also be implemented where
appropriate to ensure compliance with the corrective action
plan.
e.Foreclosure and Mortgagee-in-Possession (MIP) Status.
(1)After the mortgagee has prepared the election to assign the
mortgage, or MIAS has completed the necessary steps for
HUD-held mortgages, the Area Office Counsel, upon
instruction from the Director of Housing, should take action
to obtain either voluntary or involuntary
mortgagee-in-possession status.
(2)The Area Office must request or begin foreclosure
concurrently with the commencement of MIP status. This is
imperative and must occur in all cases.
(3)When the Department is awarded MIP status, the Director of
Housing Management should authorize the management agent to
begin making the needed repairs to restore the project to
acceptable living standards as quickly as possible. The
repairs should be paid for out of project funds and the
Insurance Fund.
Refer to Handbook 4315.1, Multifamily Property Disposition -Management, for further instruction on foreclosure and MIP
responsibilities.
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6.20 NON-ROUTINE INSPECTIONS
a.Inspections for Funding Changes. In addition to
regularly-scheduled inspections, Loan/Asset Management staff must
ensure that a physical inspection has been carried out prior to
approving actions that entail funding changes, such as additional
subsidy approvals and workouts. Loan/Asset Management staff may
waive this requirement if:
(1)A physical inspection performed in compliance with this
Handbook has been completed within the past year; or
(2)Loan/Asset Management staff determine that project
operations will be imperiled if approval of the requested
assistance is withheld.
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b.Ad-hoc Reviews. If time permits, HUD staff on official travel
should drive by any HUD-assisted and insured projects located
nearby their travel route or destination. Area Office staff
should observe the physical condition of the project with a quick
walk-through or drive-by inspection and assess whether the
project requires further inspection.
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SECTION 3:
MANAGEMENT REVIEWS
6.21 PURPOSE OF MANAGEMENT REVIEWS
a.Compliance. Management reviews are another integral step for
ensuring compliance with HUD program requirements. Management
reviews allow HUD to determine whether owners and management
agents are providing the services which HUD requires under its
Regulatory Agreements, Housing Assistance Payments Contracts,
mortgages, and general and industry standards.
b.Communication. Effective management of HUD-insured and
HUD-assisted multifamily properties requires adequate
communication between owners, managers, and residents.
Management reviews serve as HUD's primary means of assessing the
communication between owners, management agents, and residents
and resident organizations. Chapter Four of this Handbook
provides more detailed guidance on communication between owners,
management agents, and residents.
6.22 TYPES OF MANAGEMENT REVIEWS
There are two types of management reviews.
a.Comprehensive Management Reviews. A comprehensive review covers
all aspects of property operations and addresses all questions on
the HUD-9834 "Management Review of Multifamily Projects."
Exceptions to the comprehensive review format may be granted in
writing by the Director of Housing Management on a case-by-case
basis.
b.Limited Management Reviews. Limited management reviews examine
only the key areas of project operations. These reviews use 17
of the questions on the HUD-9834, in addition to all questions
addressing the suspected or known problem area(s).
Refer to HUD Handbook 4350.1, Chapter Six for a full discussion of
comprehensive vs. limited reviews.
6.23 DETERMINING THE SCOPE OF REVIEW
a.Loan/Asset Management staff must conduct comprehensive reviews
for all physically or fiscally troubled projects.
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b.Loan/Asset Management staff may choose to perform limited reviews
for some projects. The Director of Multifamily Housing will
determine whether the scope may be limited or comprehensive.
Chapter 6 of HUD Handbook 4350.1 outlines the appropriate
circumstances in which to use limited reviews.
6.24 SCHEDULING MANAGEMENT REVIEWS
a.The Area Office should use the same priority standards shown in
Figure 6-1 to schedule management reviews. Loan/Asset Management
staff should ensure that assisted projects which are physically
or fiscally troubled receive first priority.
b.In addition to the normal review plan, Loan/Asset Management
staff must arrange to review projects at which there are serious
management problems or significant resident complaints.
c.When possible, Loan/Asset Management staff should schedule
management reviews to coincide with the project physical
inspection to minimize the impact on project operations and to
use HUD resources most efficiently.
6.25 STEPS FOR PERFORMING THE MANAGEMENT REVIEW
a.Preparation. Loan/Asset Management staff should review the
records, listed below, for each project scheduled for review to
determine whether the review is warranted and, if so, its extent.
Staff should keep in mind, however, that these records alone may
not fully indicate the project's needs and condition.
(1)The priority status assigned to the project.
(2)Any records of the agent's performance at other projects.
(3)Quality, scope, and results of previous HUD on-site reviews
(management or physical) and mortgagee physical inspection
reports.
(4)Results from FHEO reviews.
(5)Financial condition reports, including the Independent
Public Accountant's report.
(6)Early Warning System, MIPS, and TRACS printouts.
(7)Results of Occupancy Specialist desk reviews of subsidized
project resident certifications and vouchers.
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(8)Resident comments and complaints.
(9)Local police reports, if available.
b.Documentation
(1)Format. The review will be documented on form HUD-9834,
"Management Review of Multifamily Projects." See Appendix
4.
(2)Contents.
(a)The report will summarize all identified deficiencies,
recommended or required corrective actions and time
frames, and conclusions. Area Office records shall
contain a detailed description of any deficiency.
(b)If the report refers to materials that are not
physically attached to it (such as annual financial
statements) it should clearly identify the location of
those materials.
c.Close-out Meeting. The owner and/or manager should be notified
of findings upon the conclusion of the review so they can begin
to address the problems. The reviewers should stress at the
meeting that the areas of concern identified are not necessarily
all-inclusive and that the final report could include additional
findings of deficiency based on the analysis of the overall
review.
6.26 FAIR HOUSING AND EQUAL OPPORTUNITY CONSIDERATIONS
a.Referrals to FHEO. During management reviews, Loan/Asset
Management staff examine resident records together with the
agent's resident screening and selection procedures for
compliance with the occupancy requirements established in HUD
Handbook 4350.3. If concerns about an owner/agent's compliance
with Fair Housing requirements arise during such reviews
Loan/Asset Management staff should notify FHEO of these concerns.
b.FHEO Reviews. FHEO staff conduct separate compliance reviews
based upon Loan/Asset Management referrals or the results of FHEO
risk assessments concerning the following areas.
(1)Management and administration;
(2)Equal employment opportunity and training;
(3)Outreach and affirmative marketing;
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(4)Occupancy reviews and resident data;
(5)Maintenance and facility management;
(6)The provision of services to persons with disabilities; and
(7)Procurement practices and the use of minority- and
women-owned businesses.
For additional information, see FHEO Notice 92-1, Implementing
FHEO Accountability Monitoring/Risk Assessment.
6.27 TIMEFRAME FOR COMPLETING REPORT
a.If HUD performs the management review, it will issue the report
upon completion of the field work.
b.If a contractor performs the management review, the contractor
must deliver the report to the Area Office within the time frame
specified in its contract with HUD.
6.28 NOTIFICATION OF THE OWNER/MANAGEMENT AGENT
The Loan/Asset Management staff must notify the owner of the results
of the review upon completion of the report by HUD staff or
contractors. Loan/Asset Management staff must also send a copy of the
report to the management agent and/or other contacts identified by the
owner and to the mortgagee if the property has an insured mortgage.
See HUD Handbook 4350.1 for specific procedures regarding owner
notification.
6.29 CORRECTIVE ACTION PLANS
a.Format. Once HUD has notified the owner and management agent of
the report's findings, the owner/agent is expected to prepare a
corrective action plan to address deficiencies. Like the
corrective action plan for a physical inspection, this plan may
use the MIO plan format. (See HUD Handbook 4355.1, Flexible
Subsidy Handbook.)
b.Time Frame for Response. Owners must provide the Area Office
with a corrective action plan addressing the noted deficiencies
within thirty 30 days of the date of notification.
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c.Appeals. The owner may appeal the findings of the management
review according to HUD Handbook 4350.1, Chapter 6. However, the
owner may not delay submitting the response or correcting valid
deficiencies that are not under appeal.
d.Monitoring Corrective Action.
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(1)To monitor corrective action, Loan/Asset Management staff
may, as appropriate:
(a)Conduct discussions with owners, agents, and residents;
(b)Review the deficient area by performing a limited
management review using form HUD-9834; and
(c)Review desk reports and other documentation to verify
that management deficiencies have been corrected.
(2)Each Area Office must develop its own procedures and
timetables for monitoring management corrections given the
severity of the deficiencies and available staff resources,
but the following guidelines apply to all monitoring
activities.
(a)Follow-up. HUD staff must ensure that owners are
carrying out the required corrective actions. The
Loan/Asset Management staff will monitor the project
for as long as deficiencies are being corrected, and
will determine whether the owner is acting in a timely
and professional manner in carrying out the
corrections.
(b)Discovery of Additional Deficiencies.
deficiencies are revealed as a result of routine
monitoring or as a result of a subsequent review of
operations, Loan/Asset Management staff will repeat all
steps necessary to assure owner compliance.
If new
(c)Follow-up System. If a follow-up system is not in
place, Loan/Asset Management staff shall establish a
follow-up and reporting system which monitors the
actions taken by the owner to cure existing
deficiencies.
6.30 ADDRESSING NONCOMPLIANCE
a.The Loan/Asset Management staff shall notify the owner in the
case of noncompliance with the corrective action plan. The owner
must take remedial action immediately upon receipt of
notification, and must provide an explanation of any
noncompliance.
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b.The owner also must develop and provide to the Area Office
proposed revisions to the corrective action plan within ten (10)
days of the notification. The Loan/Asset Management staff will
analyze any modifications to determine their feasibility and
their effect on the continued viability of the plan.
c.If noncompliance is caused by a management agent, Loan/Asset
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Management staff should follow the procedures described in
Chapter 7 to enforce agent compliance.
6.31 TECHNICAL DEFAULTS
For properties with HUD-insured or HUD-held mortgages, if the
Loan/Asset Management staff determine that:
a.A good-faith effort is not being made to correct deficiencies
noted in the management review report;
b.A plan is not received; or
c.The plan, as revised, is no longer workable.
then the Area Office should pursue a declaration of default, under
either the waste provision of the mortgage or under the Regulatory
Agreement. See paragraph 6-19.
6.32 AGENTS MANAGING MORE THAN ONE PROPERTY
a.If the Loan Management or other Area Office staff are familiar
with the management agent's performance because the agent manages
more than one property under HUD's jurisdiction, the Loan/Asset
Management staff may perform a Limited Management Review. They
may also examine a sample of the more important management tasks
(cost controls and budgeting, resident screening and selection,
preventive maintenance, etc.).
b.If the Area Office has observed problems at one or more of the
agent's projects Loan/Asset Management staff should perform a
Comprehensive Management Review at all current projects.
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6.33 REVIEWS OF MANAGEMENT AGENTS' CENTRAL OFFICES
a.In some cases, agents with more than one property perform certain
management functions from a centralized location. General
management functions, as well as financial management and
selected occupancy functions, are activities these agents often
choose to centralize. Loan/Asset Management staff must perform
management reviews of the agent's central office activities as
well as regular on-site reviews of functions carried out at the
projects. The purpose of the centralized review is to limit the
time spent reviewing individual properties. For example, once a
review is performed on the agent's central offices books,
records, and internal controls, they will not need to be
inspected at each individual property.
b.The HUD Super A Area Office covering the area in which the
management agent's central office is located has responsibility
for centralized reviews. They may solicit assistance from the
Area Office which is located closest to the Central Office
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proposed for review. The Super A Area Office has the
responsibility for assuring the review is conducted, resolving
any outstanding findings, and forwarding a copy of the review to
other Area Offices with properties managed by that agent.
c.Central office management reviews should be performed at least
once every 18 months.
d.Whenever possible, a team of the appropriate HUD specialists,
rather than a single staff person, should perform these reviews.
An ideal team would consist of a Loan Specialist/Asset Manager, a
Financial Analyst, and an Occupancy Specialist, if staffing
permits. Additional members may be appropriate depending on the
size of operation and types of functions handled by the agent's
central office.
e.Central office management reviews follow a modified management
review format. Loan/Asset Management staff performing this type
of review should complete the following portions of the
Management Review Form (Form HUD-9834):
(1)Part B - Financial Management (All items)
(2)
Part C - Occupancy and Tenant Selection (Those items that
correspond to activities handled at the agent's
central office)
(3)Part E - Drug Free Housing Policy (Items 33, 34, 36, & 37)
(4)Part F - General Management (Items 38 - 42 and 44- 45)
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In completing the review, Loan/Asset Management staff should assess
whether the agent's procedures allow HUD to examine the performance of
each project individually for all of the applicable items above.
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SECTION 4:
FINANCIAL COMPLIANCE
6.34 OVERVIEW
a.Purpose. Management agents are charged with protecting the
financial viability of HUD-insured multifamily projects. The
purpose of financial reviews is to verify that owners and
management agents are in compliance with HUD Handbook 4370.2,
Financial Operations and Accounting Procedures for Insured
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Multifamily Projects, and related HUD requirements and
guidelines. This section provides an overview of the financial
compliance review requirements for Loan/Asset Management staff.
Inadequate internal controls and procedures for financial
operations and accounting can result in
oinsufficient funds to pay for maintenance and emergency
repairs;
owillful misappropriation of project funds; and/or
oclaims and losses against the FHA Insurance Fund.
To prevent these occurrences, Loan/Asset Management staff are
responsible for determining that owners and management agents
observe HUD guidelines and maintain an effective set of reporting
systems and internal controls.
b.Applicability. All HUD-insured and HUD-assisted properties are
subject to some degree of financial review. HUD Handbook 4370.2
describes the review procedures that must be performed for
different types of projects and who is responsible for conducting
the review (i.e., HUD, the mortgagee, or Contract Administrators
other than HUD).
6.35 RELATIONSHIP TO MANAGEMENT REVIEW
Part B of the HUD-9834, Management Review of Multifamily Projects,
addresses financial management. Questions on Part B of the HUD-9834
relate directly to the following paragraphs. See Appendix 4.
6.36 REVIEWING ANNUAL FINANCIAL STATEMENTS
a.Purpose. Annual financial statements show the project's
financial condition. Loan/Asset Management staff may review the
statements, which are sent to the Area Office, to measure the
current and near-term financial stability of the
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project by using financial ratios and other indicators.
from existing MIPS applications may provide additional detail.)
Loan/Asset Management staff should determine whether project
assets and liabilities, rates of rent collection, accounts
payable, etc., appear reasonable given the project's size and
history. This information may suggest areas where increased
oversight is needed.
(Reports
b.Review requirements. Loan/Asset Management staff must verify
that annual financial statements are prepared and submitted to
the Area Office in compliance with the following procedures and
with HUD Handbook 4370.2.
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(1)Preparation
(a)Each annual financial report must be based on books and
accounts for that project only.
(b)The annual financial report must cover the project's
entire fiscal period under review.
(c)The annual financial report must be prepared on an
accrual basis.
(d)The annual financial report must be audited by an
Independent Public Accountant (IPA) who is a Certified
Public Accountant or who has been licensed or
registered on or prior to December 31, 1970.
(2)Submission. Chapter 3 of HUD Handbook 4370.2 REV-1 provides
a detailed listing of the required annual reports. Audited
financial statements must be submitted annually for each
project. The Regulatory Agreement requires submission
within 60 days following the end of each fiscal year.
6.37 ASSIGNING MANAGEMENT COSTS
a.HUD allows owners to charge certain management costs to the
project's operating account. However, other management costs may
be paid only out of the management fee. The assignment of these
costs is discussed in paragraphs 6.38 and 6.39. Asset management
costs for the project must be paid out of distributions to the
owner. The assignment of asset management costs is described in
paragraph 6.41.
b.In reviewing a project's financial statements, Loan/Asset
Management staff should follow the procedures in paragraphs 6.38
through 6.41 and in
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Handbook 4370.2 to ensure that management costs have been
properly assigned.
c.Rather than maintaining separate payroll and separate fringe
benefits plans for each property, some agents consolidate payroll
and fringe benefit plans in order to reduce costs for the
properties. In such a system, all personnel for several
properties are listed under a single Federal Employer I.D.
Number. The salary and fringe benefits costs are prorated to the
various properties in the following ways.
(1)Salaries and fringe benefits of personnel performing
front-line duties are prorated among the properties served
in proportion to actual use.
(2)The agent may not impose surcharges or administrative fees
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in addition to actual costs.
(3)The properties served may make reimbursement payments to the
consolidated employer upon issuance of payroll checks.
(4)Discounts, rebates, dividends, commissions, or other
recoveries of fringe benefits costs must be prorated among
the properties served in proportion to actual use during the
period to which the recovery applies.
6.38 MANAGEMENT COSTS CHARGED TO THE PROJECT'S OPERATING ACCOUNT
a.Front-line Costs and Day-to-Day Activities
(1)Reasonable expenses incurred for front-line management
activities may be charged to the project operating account.
HUD Handbook 4370.2, Financial Operations and Accounting
Procedures for Insured Multifamily Projects, provides a
complete listing of allowable expenses. Front-line
activities include:
otaking applications;
oscreening, certifying, and recertifying residents;
omaintaining the project; and
oaccounting for project income and expenses.
Figure 6-2 provides examples of front-line management costs.
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Figure 6-2
Examples of Costs Paid from Management Fee and Project Account
===========================================================================
Costs Paid from Fee
Costs Paid from Project Account
===========================================================================
The selection and establishment of
an accounting system and internal
management control procedures.
Visits to spot check performance of
on-site staff (e.g., reviews of
occupancy files, office
procedures, etc.).
Reimbursement of all costs related
to maintaining a centralized or
project-based accounting functions of
the project, including resident
certifications, worksheets, and
monthly subsidy billings, as well as
monthly accounting reports required
by the owner or HUD. Includes
prorated costs on a per-unit basis
for centralized accounting systems,
including hardware, software and
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technical support. Agent can be
reimbursed for the prorated cost
to the project of personnel
providing property-specific
accounting and computer services.
The cost to the project for such
services provided by the agent may
not exceed the cost of procuring
comparable services from an
independent vendor. Each year,
the agent must determine that these
costs are at or below the market
and maintain such evidence on-site.
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Fidelity bond coverage for the
agent's supervisory staff.
Fidelity bond coverage for front-line
employees and principal management
staff.
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Bookkeeping expenses attributable
to agent's company.
Overhead expenses (e.g., supplies
and equipment, transportation and
phone calls to projects, regularly
scheduled long distance calls from
project to agent, office space,
data processing, etc).
Costs of front-line project
operations -- e.g., managers and
their apartments, legal and auditing
expenses, bookkeeping and associated
expenses, occupancy clerks, project
management delinquency notices,
evictions, project checks, envelopes,
postage, air express delivery
charges, copying, unscheduled long
distance calls to agent, costs of
IRS Section 401-K, 125, and 403-B,
and related retirement and health
plans for on-site staff so long as
they are comparable with industry
standards and in compliance with the
guidelines set forth in paragraph
6.38(e), and the salary of a
supervisory employee of the agent
designated to replace a project
employee for hours worked at the
project above and beyond the first
40 consecutive hours of the
assignment.
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Directing the investment of project
funds.
Reasonable brokerage fees and
interest costs incurred in
investing project funds
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Agent's travel expenses to visit
project and meet with owners.
Training and travel expenses for
agent's supervisory staff.
Travel expenses incurred by
front-line staff's responsibilities
(e.g., making bank deposits, meeting
with contractors, attending training,
etc.).
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Agent office phone lines not
dedicated to TRACs or the
Dedicated line and modem for
transmitting TRACs data (such lines
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project, and automation
equipment not required by HUD.
can be shared with FAX machines).
Automation required by HUD (e.g.,
equipment for the implementation of
TRACs). Reasonable costs for on
site equipment, software, and
technical support necessary for
performing other front-line
activities of the project,
including FAX machines, automated
credit terminals, and other
telephones and electronic
transmission devices at the site.
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Recruiting costs for agent's staff,
Recruiting costs for on-site staff.
including roving staff members.
===========================================================================
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(2)If front-line management functions for several properties
are performed by staff of the agent operating out of a
single office, the following conditions apply.
(a)The agent must prorate the total associated costs among
the projects served in proportion to the actual use of
services. Allowable total associated costs include:
(i)Salaries and fringe benefits of personnel
performing front-line duties; and
(ii) Actual office expenses, fees, and contract costs
directly attributable to the performance of
front-line duties.
(b)The agent may not impose surcharges or administrative
fees in addition to actual costs.
(c)The cost of performing front-line management functions
off-site may not exceed the total cost of performing
these functions at the property.
(3)The salaries of the agent's supervisory personnel may not be
charged to project accounts, with the exception of
supervisory staff providing oversight for centralized
accounting and computer services for the project.
b.Agent Staff Performing Front-Line Functions
A management agent employing generalist staff members
specifically designated to assume front-line responsibilities on
an as-needed basis may bill the project's operating account for
time spent on front-line activities for the property if each of
the following conditions are met.
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(1)Salaries of an agent's supervisory personnel may not be
charged to the project's operating account (See exceptions
to this rule in paragraph 6.39).
(2)The agent develops a job description for each generalist
position outlining the front-line and non-front-line
responsibilities of the position. The non-front-line
responsibilities in the generalist description may not
include supervisory functions.
(3)The agent develops a reasonable hourly rate, which will be
used to bill individual projects for time spent on
front-line functions. A reasonable hourly rate includes the
hourly salary for the position and an allocation
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for overhead expenses, and should not exceed the amount that
would be paid to an on-site staff member with similar
experience.
(4)An agent's generalist staff must document hours spent and
duties performed on front-line activities for each project
and those spent on the central office functions. Weekly
timesheets are an acceptable method of documenting hours
spent on front-line tasks.
c.Training Costs for Front-Line Staff
(1)Project funds may be used to obtain project related training
for front-line management staff.
(2)Loan/Asset Management staff may use the following guidelines
to assess whether amounts proposed for training are
reasonable.
(a)At a minimum, the budget amount should be sufficient to
allow one staff person from each functional area to
attend a minimum of one project related training
session per year.
(b)As a rule of thumb for most projects, a reasonable
training budget would not exceed the greater of $5,000
or one half of one percent (0.005) of gross rents.
(c)Loan/Asset Management staff have the authority to
approve training budgets that exceed the guidelines in
paragraph (b) above if the owner/agent can clearly
document the conditions that necessitate more extensive
training for project staff.
d.Training Costs for Board Members of Resident-Owned/Co-op Housing
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(1)Project funds may be used to provide project related
training for the Board of Directors of a housing
cooperative.
(2)Project funds approved by the Board may be used to pay for
each board member to attend one project related training
session or conference per year.
(3)The guidelines presented in paragraph 6.38c(2)(b) and
6.38c(2)(c) should be used in evaluating whether the amounts
proposed for training are reasonable.
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e.Retirement Accounts for Front-Line Staff
(1)Funding of retirement accounts for front-line staff can be
paid out of a project's operating account. Retirement
accounts for an agent's central office staff may be paid
only out of the management fee.
(2)HUD will allow employer contributions to retirement accounts
for front-line staff to be paid out of project funds if the
following requirements are satisfied.
(a)The retirement account plan complies with all
applicable federal, state, and local laws and
regulations governing such programs.
(b)Only permanent, front-line employees who work full-time
at the project (i.e., more than 30 hours per week) may
participate. Off-site employees and temporary or
part-time on-site employees are not eligible. Also,
rotating employees working at more than one project are
not eligible unless they qualify as a full-time
employee at one project.
(c)The projected cost of employer contributions to be paid
out of project funds may not exceed five percent of the
base pay of eligible employees.
(d)A reasonable portion of the employer contribution will
vest relatively early in an employee's tenure with the
company. Generally, employees should be 100 percent
vested within five years.
(e)Employees must remain 100 percent vested for all
personal contributions to their account.
(f)The actual cost of administering the retirement account
plan will be prorated to the projects.
(g)No commingling of employee accounts may occur.
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(h)The plan must be managed by a qualified outside entity
with an established history of handling such programs.
(i)Agents will make modifications to the plan as necessary
to comply with changes in the laws and regulations
governing such programs.
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To further the plan's goals, the agent may make
modifications to the program without notice to HUD as long
as the program continues to satisfy the provisions of
paragraphs (a) through (i) above.
(3)Agents must certify to HUD that the retirement account plan
meets the requirements set forth in this paragraph before
any funds are charged to a project's operating account. In
addition, agents must include the additional cost in their
Budgeted Rent Increase request.
6.39 MANAGEMENT COSTS PAID FROM THE MANAGEMENT FEE
a.Expenses for services that are not front-line activities must be
paid out of management fee funds, except for centralized
accounting and computer services. Figure 6-2 above presents
examples of costs that may only be paid out of the management
fee.
b.Salaries, fringe benefits, office expenses, fees, and contract
costs for the following activities must be paid out of management
fee funds. These costs include:
(1)Designing procedures/systems to keep the project running
smoothly and in conformity with HUD requirements.
(2)Preparing budgets required by the owner or HUD, exclusive of
rent increase requests and MIO Plans.
(3)Recruiting, hiring, and supervising project personnel.
(4)Training for project personnel that exceeds the line item
budget for training expenses.
(5)Monitoring project operations by visiting the project or
analyzing project performance reports.
(6)Analyzing and solving project problems.
(7)Keeping the owner abreast of project operations.
(8)Overseeing investment of project funds.
(9)Ensuring that project positions are covered during
vacations, sickness, and vacancies.
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c.The salaries of agent supervisory personnel must be paid from the
management fee unless one of the exceptions below is met.
(1)The cost of supervisory personnel providing oversight of
centralized accounting and computer services for a project
may be paid out of project funds.
(a)A prorated share of the salaries for such supervisors
may be charged to the project's account.
(b)The total charges to a project for centralized
accounting and computer services (including supervisory
staff costs) provided by the agent may not exceed the
cost of procuring comparable services from an
independent contractor.
(2)The costs of the salary for a supervisory employee of the
agent designated to replace a project employee on temporary
leave may be paid out of project funds after the first 40
hours of the assignment.
(a)The amount paid out of project funds to cover the
weekly salary of the replacement employee may not
exceed the lesser of:
(i)Twice the amount of the absent employee's weekly
salary; or
(ii) The actual amount of the replacement employee's
weekly salary.
(b)Project funds may be used to pay the allowable portion
of the replacement employee's salary for a period of up
to 90 days after the first 40 consecutive hours.
6.40 OFFSETTING AGENT'S COSTS FOR PURSUING RESIDENT FRAUD
As part of HUD's efforts to reduce the incidence of resident fraud in
HUD-assisted projects, HUD will allow owners/agents to keep a portion
of the resident repayments they collect from residents who have
improperly reported their income at the time of certification or
recertification to help defray the cost of pursuing these cases.
Owners/agents should take the following steps when they become aware
that a resident may have provided inaccurate information about
household income during the certification or recertification process.
a.Follow the procedures in Chapter 5 of HUD Handbook 4350.3 for
investigating and correcting inaccurate information provided
during certification or recertification of resident income.
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b.If a resident supplies inaccurate income information and, as a
result, is charged less than the amount required by HUD's rent
formulas, the resident must reimburse the owner for the
difference between the rent the resident should have paid and the
rent he/she was actually charged. Chapter 5 of HUD Handbook
4350.3 describes HUD's requirements for resident repayment.
c.When residents submit inaccurate income information and are found
to have received overpayments of assistance, owners/agents are
required to reimburse HUD for any resident repayments received.
To help offset the expense of obtaining resident repayments,
owners/agents may retain up to a maximum of 20 percent of the
amount of resident repayments they actually collect from
residents who have provided inaccurate information about their
income to cover their actual costs. Owners/agents must reimburse
HUD for the remaining portion of resident repayments they collect
in accordance with the procedures in Chapter 5 of the 4350.3.
6.41 ASSET MANAGEMENT SERVICES
a.Asset management functions are those activities associated with
managing and protecting the assets of the ownership entity and
overseeing the management agent's performance. Asset management
activities include:
(1)Disbursing surplus cash.
(2)Periodic owner visits to the project to review the
agent's performance.
(3)Obtaining or providing tax advice to the ownership
entity or its principals and preparing the ownership's
tax return.
b.Asset management costs must not be billed to a project's
operating account. These costs may only be paid from funds
available for distribution to owners in accordance with the terms
of the Regulatory Agreement and HUD Handbook 4370.2.
NOTE: On limited distribution projects, any asset management
fees paid from project funds must be included in the
distributions-paid entry on Line 2C of Form HUD-93486.
Computation of Surplus Cash, Distributions and Residual Receipts.
c.Reasonable expenses for preparing the ownership entity's tax
return, and Schedule K-1 if the entity is a partnership, may be
charged to a project's operating account.
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6.42 FIDELITY BOND COST ALLOCATION
a.The cost of the management agent's fidelity bonds must be
allocated as follows:
(1)The agent must pay fidelity bond costs for the agent's
supervisory staff.
(2)The agent may charge the project operating account for bond
costs for front-line employees and the agent's principals.
If a bond covers the front-line employees of several
projects, the bond costs applicable to those projects must
be allocated in direct proportion to the gross rent
potentials in effect for those projects at the time the bond
is purchased. Bond costs for the agent's principals should
also be prorated among all properties if the agent manages
more than one property.
b.When conducting financial reviews, Loan/Asset Management staff
should ensure that fidelity bond costs have been properly
allocated.
6.43 WORKER'S COMPENSATION DIVIDENDS
a.Dividends received from Worker's Compensation insurance premiums
must be distributed in the following manner.
(1)If Worker's Compensation insurance for project staff is paid
for out of project funds, all dividends are returned to the
project.
(2)If Worker's Compensation premiums are paid by the agent out
of the management fee the dividends are paid to the agent.
b.In reviewing a project's financial statement, Loan/Asset
Management staff should identify the source of funds used to pay
Worker's Compensation premiums and verify that all dividends are
returned to the project when the premiums are paid out of project
funds.
6.44 PROJECTS NOT SUBJECT TO MANAGEMENT FEE REVIEWS
Owners of projects not subject to HUD review of management fees may
not inflate management fees to receive project funds monthly rather
than through semi-annual or annual distributions of surplus cash.
During all financial reviews of such projects, Loan/Asset Management
staff should examine management fee payments to make sure they have
not been inflated.
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6.45 CASH MANAGEMENT
a.Purpose. Loan/Asset Management staff must verify that the
management agent secures cash receipts and disbursement checks to
prevent unauthorized use of funds.
b.Review Requirements. Loan/Asset Management staff must review the
management agent's cash management controls in accordance with
Part B of the HUD-9834, Item 12 -- Cash Controls, as part of the
management review.
See Chapter 2, Handbook 4370.2 REV-1, for details on Cash
Management Controls. Generally:
(1)All receipts must be promptly deposited to a federally
insured bank account held in the name of the project.
Security deposits should be held separate and apart from
other project funds in a segregated account.
(2)The management agent must obtain a fidelity bond in an
amount at least equal to potential collections for two
months. Blanket coverage must extend to all employees
handling cash.
(3)Receipts and disbursements should be controlled through
procedures for reconcilement of cash movements to banking
and accounting statements and vouchers.
(4)Cash instruments (e.g. blank checks) must be kept secure in
a locked drawer or safe with limited access.
6.46 DISTRIBUTION OF SURPLUS CASH
a.Purpose.
(1)Uses of surplus cash are governed by the Regulatory
Agreement. Loan/Asset Management staff must verify that
owners do not distribute surplus cash before satisfying all
obligations to mortgage repayment, payment of reasonable
project expenses, and replacement reserve accounts.
(2)Distributions may not be made when the project is in default
or under a forbearance agreement, and distributions to
owners may not be made on nonprofit projects.
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b.Review Requirements. Loan/Asset Management staff must review the
Income Statement and Cash Flow Statement to verify that
distributions have been made in compliance with the Regulatory
Agreement and with the requirements of Chapter 2, Handbook 4370.2
REV-1. These guidelines include the timing as well as the amount
of the distribution.
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6.47 MAINTAINING PROJECT FUNDS IN INSURED ACCOUNTS
a.Purpose. Given the size of most project accounts, it is vital
that they be held in a federally-insured bank. An
unreimburseable loss to any of these accounts would unnecessarily
burden the FHA Insurance Fund.
b.Review Requirements
(1)Loan/Asset Management staff must ensure that each project
maintains at least these bank accounts in a
federally-insured bank (descriptions of each account are
included in Chapter 2 of Handbook 4370.2 REV-1):
(a)Regular Operating Account;
(b)Replacement Reserve Account;
(c)Tenant Security Deposit Account (if the project takes
security deposits); and
(d)Residual Receipts Account.
(2)Loan/Asset Management staff must review the project's bank
account statements and verify that the bank is
federally-insured and that each account is established and
in use,
(3)Loan/Asset Management staff must verify that the project has
opened additional security deposit accounts in different
banks, if necessary, to ensure that the balance of each
security deposit account does not exceed the insurance limit
of $100,000 per FDIC regulations. See Handbook 4370.2 for
further guidance.
6.48 MONITORING EXCESS INCOME FROM SECTION 236 PROJECTS
a.Purpose. Rents collected in excess of basic rental charges from
residents in a Section 236 project must be remitted monthly to
HUD. Excess rents is the amount by which the rent collected on a
dwelling unit exceeds the approved basic rent for that unit.
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b.Review Requirements
(1)Annual Review. The IPA should confirm the transfer of
excess rents for Section 236 projects with the Excess Rental
Income Office in Pittsburgh. Loan/Asset Management staff
should review the results of this confirmation.
(2)Mid-year Review. If Loan/Asset Management staff determine
it necessary to review excess rent transfers mid-year, they
should request copies of the project's forms HUD-93104,
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Monthly Report of Excess Income and Accrued Unpaid Excess
Income and HUD-93104A, Schedule for Calculating Excess
Income and Report of Excess Income Delinquencies from the
management agent, and compare the recorded amounts to the
project's Monthly Accounting Reports.
(3)Paragraph 7-28 of HUD Handbook 4350.1 provides detailed
guidance on the specific actions loan management staff need
to take to properly monitor excess income from Section 236
projects.
6.49 MONITORING EQUITY SKIMMING
a.In reviewing a project's financial statements, Loan/Asset
Management staff must make sure that owners are not receiving
unauthorized distributions from the project. To ensure that no
unauthorized distributions have been made, also referred to as
equity skimming, Loan/Asset Management staff should compare the
amount of distributions paid during the period covered by the
annual statements to the amount of surplus cash available,
keeping in mind the distribution limitations imposed on limited
dividend owners. Proper distributions meet the following
conditions:
(1)No distributions are permitted for projects with a nonprofit
ownership entity.
(2)Limited dividend owners may pay both the annual distribution
earned (i.e. the 6 or 10 percent permitted by the
Regulatory Agreement) plus distributions unpaid from
previous years, but only up to the amount of surplus cash
available.
(3)Distributions may not be paid in excess of the surplus cash
available as of the end of the prior fiscal year.
Distributions may be paid semi-annually for certain projects
with HUD approval.
(4)Distributions may not be paid when:
(i)A project is in default under the mortgage;
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(ii)
The owner has agreed to waive payment of
distributions;
(iii)
The project is in a non-surplus cash position; or
(iv)The project is not in "good repair and condition"
(a requirement of the Regulatory Agreement) based
on a mortgagee physical inspection, or a HUD
management review or physical inspection.
b.Loan/Asset Management staff should refer to HUD Handbook 4370.1,
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and Chapter 8 of Handbook 4350.1 for more detailed guidance on
monitoring for equity skimming.
6.50 CONTRACTING GUIDELINES
a.When an owner/agent is contracting for goods or services
involving project income, an agent is expected to solicit written
cost estimates from at least three contractors or suppliers for
any contract, ongoing supply or service which is expected to
exceed $10,000 per year or the threshold established by the HUD
Area Office with jurisdiction over the project.
b.For any contract, ongoing supply or service estimated to cost
less than $5,000 per year, the agent should solicit verbal or
written cost estimates in order to assure that the project is
obtaining services, supplies and purchases at the lowest possible
cost. The agent should make a record of any verbal estimate
obtained.
c.Documentation of all bids should be retained as a part of the
project records for three years following the completion of the
work.
d.For further information on contracting guidelines and
requirements, see Chapter 5 of this Handbook.
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SECTION 5:
PROVISIONS OF CONTRACTS AND REGULATORY AGREEMENTS
6.51 OVERVIEW
a.Purpose. When HUD is the Contract Administrator, the Loan/Asset
Management staff must verify that the project owner and
management agent are complying with their legal agreements
between the owner and HUD, and that the project owner is
providing decent, safe, and sanitary housing to assisted
residents in compliance with HUD guidelines.
When HUD is not the Contract Administrator, the Loan/Asset
Management staff should review the work of the Contract
Administrator (PHA, State Agency, etc.) to be sure that the owner
and management agent remain in compliance, and that the contract
administrator itself is taking all necessary steps to prevent the
opportunity for fraud, waste, and mismanagement in the operation
of the project.
b.Applicability.
this section.
(1)
(2)
(3)
(4)
Section
Section
Section
Section
The following project types are covered under
8 Loan Management Set-Aside
8 Property Disposition Set-Aside
8 New Construction and Substantial Rehabilitation
515/8 Administration for Rural Housing and Economic
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(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
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Development Services
Section 8 State Agencies
Section 236 Interest Reduction Payments for Rental Projects
Section 221 (d)(3) Below Market Interest Rate (BMIR)
Rent Supplement
Rental Assistance Payment (RAP)
Section 202 Projects for the Elderly or Handicapped
Section 202 Nonelderly Handicapped Families and Individuals
Project Rental Assistance Contract (PRAC)
Project Assistance Contract (PAC)
Flexible Subsidy Program for Troubled Projects
6.52 REVIEWS AND CORRECTIVE ACTION
The monitoring tasks described in this Section are similar to those
covered in Section 2. In the event that the Loan/Asset Management
staff identify waste, fraud or noncompliance while monitoring rental
assistance contracts and Regulatory Agreements, they should require
and monitor corrective action as described in Section 2 and/or pursue
sanctions as discussed in Chapter 7 of this Handbook and, if
applicable, Chapter 8 of Handbook 4350.1.
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6.53 MONITORING RENTAL ASSISTANCE CONTRACTS
Owners and managers of subsidized projects agree to comply with the
procedures and practices stated in the rental assistance contract,
including (but not limited to) the maintenance of housing units to
meet Section 8 Housing Quality Standards. The contract administrator
-- HUD, the PHA, or the State Agency -- is responsible for ensuring
that the owner/agent complies with the clauses of the rental
assistance contract.
This paragraph summarizes the responsibilities of the owner/manager
and the contract administrator, and highlights some of the monitoring
tools that the contract administrator may use to fulfill its
responsibilities. A complete discussion of contract monitoring is
contained in HUD Handbook 4350.5, Subsidy Contract Administration and
Field Monitoring. Owners/managers and contract administrators are
reminded that the exact wording of HAPs can vary depending on the
project type and whether or not the project is HUD-insured; this
discussion is only a general overview of the administrative
responsibilities.
a.Under the HAP, the owner/agent is responsible for:
(1)Marketing units and selecting families in accordance with
HUD guidelines and applicable fair housing regulations;
(2)Maintaining and operating the project in a decent, safe, and
sanitary manner and in conformance with Housing Quality
Standards and industry practices;
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(3)Verifying resident income and household composition on at
least a yearly basis to ensure compliance with occupancy
guidelines;
(4)Collecting resident rents;
(5)Establishing and maintaining project financial accounts and
records; and
(6)Obtaining the necessary insurance contracts, including flood
insurance for projects located in special flood hazard
areas.
b.The contract administrator will verify that the owner/agent is
fulfilling these responsibilities in a timely and professional
manner, and will also initiate any procedures to bring about
necessary corrective actions. Specifically, the contract
administrator will:
(1)Assess the project's operating policies and procedures
through on-site visits, interviews with the owner,
management agent, and project staff;
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(2)Review operations for evidence of waste, mismanagement, or
fraud, and take appropriate steps as outlined in this
handbook and in Handbook 4350.5 and 4350.1 to initiate
corrective action;
(3)Review the project's operating budget, Reserve for
Replacement withdrawal requests, and owner distributions for
propriety;
(4)Ensure that rent increase requests are submitted in a timely
and reasonable manner;
(5)Review rent collection procedures, including the tracking of
delinquencies;
(6)Determine whether the vacancy rate is comparable to other
projects in the area, and assess causes for high turnover if
any;
(7)Verify that owners/agents are screening and selecting
residents in compliance with HUD guidelines;
(8)Verify that the owner/agent is managing mandatory meals and
pet owner policies in accordance with HUD Handbook 4350.1;
(9)Review Section 8 utilization, including monthly vouchers,
special claim vouchers, rent rolls, and other project
records, to ensure that funds are being used properly and
that unused funds are returned to HUD;
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(10) Verify that utility allowance adjustments are calculated
properly; and
(11) Review project property tax and flood insurance matters as
appropriate.
Additionally, the contract administrator must ensure that the
owner/manager is operating in compliance with the regulatory
requirements as listed in HUD Handbook 4350.5, Chapter 1.
6.54 MONITORING FLEXIBLE SUBSIDY CONTRACTS
Area Office instructions for evaluating and monitoring projects that
request or operate under Flexible Subsidy contracts are discussed in
Handbook 4355.1 REV-1, Flexible Subsidy, particularly in Chapter 6.
Flexible Subsidy contracts include both the Operating Assistance
Program (OAP) and the Capital Improvement Loan Program (CILP). The
following paragraphs provide an overview of the Loan/Asset Management
staff's responsibilities for monitoring Flexible Subsidy contracts.
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a.HUD will review the project requesting a Flexible Subsidy prior
to approving an application to verify that the project is free of
significant or repetitive resident complaints and physical
problems, or that the owner/agent will rectify the cause of the
complaints and problems through the assistance. These reviews
may include any of the monitoring techniques discussed in Section
1.
b.The Loan/Asset Management staff must determine that the Flexible
Subsidy will:
(1)Restore or maintain the project's physical soundness;
(2)Restore or maintain the project's fiscal soundness;
(3)Provide the least costly financing alternative that also
retains the low- and moderate-income character of the
project for the remaining term of the project mortgage;
(4)Be applied within the conditions of an approved Management
Improvement and Operating (MIO) Plan or Work Write-Up; and
(5)Be provided under competent project management, and that
project management meets satisfactory levels of experience
and ability as determined by the management review and other
monitoring processes.
c.HUD will not provide assistance until the owner/agent:
(1)Submits a plan to correct and remedy any deficiencies
documented by the Department, and
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(2)Certifies and documents that he/she has taken steps to
secure funding from all possible sources.
d.After a Flexible Subsidy contract has been awarded, the Area
Office will receive from the owner on a monthly basis:
(1)A Monthly Accounting Report for the previous month (Forms
HUD-93479, 93480, and 93481);
(2)Form HUD-9835, Part II, Section A of the MIO Plan, covering
progress and payments for action items; and
(3)Any Requisition for Advance of Flexible Subsidy Funds, Form
HUD-9823a, processed during the previous month.
The Loan/Asset Management staff will verify that the forms are
complete and that all requests for funds are reasonable.
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e.On a quarterly basis, the Loan/Asset Management staff will
conduct an in-depth review of each Flexible Subsidy contract.
These reviews will include:
(1)Remote monitoring of submitted progress reports, budgets,
cost estimates, schedules, and invoices; and
(2)On-site visits to verify that work undertaken is being
completed in a satisfactory manner in compliance with
subparagraph b., above.
6.55 MONITORING REGULATORY AGREEMENTS
HUD requires different forms of Regulatory Agreements for different
project and owner types. In many cases, the Agreement specifies
owner/management agent responsibilities which the Loan/Asset
Management staff already monitors pursuant to other paragraphs in this
chapter. The guidance below covers general issues related to
monitoring Regulatory Agreements. More detailed guidance can be found
in Chapter 2 of HUD Handbook 4350.1.
a.Financial issues. The Loan/Asset Management staff will verify
that reports and other documents are submitted on required
schedules, confirm that these items are complete, and investigate
questionable transactions. These reports and documents include:
(1)The Annual Financial Statement and Budget.
(2)Monthly Accounting Reports.
(3)Evidence that the owner/management agent is utilizing the
Receipts Fund Account and, for nonprofits, the Residual
Receipts Fund Account in the required manner.
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(4)Statements of Replacement Reserve Account use (deposits and
withdrawals), to verify that all transactions are
authorized.
(5)Vouchers, invoices, and other evidence that distribution and
expense payments are proper and authorized.
b.Occupancy and Resident Selection Issues. The management agent
will submit monthly reports on occupancy levels. In addition,
the management agent must provide, at the Loan/Asset Management
staff's request, information on its resident screening and
selection processes. The Loan/Asset Management staff should
review this information to determine that the management agent:
(1)Observes federal preferences for resident selection; and
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(2)Admits income-eligible residents to achieve an overall
population that is at least 90 percent lower income.
In addition, the Loan/Asset Management staff should verify that
the management agent conducts income recertification annually or
more often if necessary. If such reviews reveal that the agent
may be in violation of civil rights statutes, or is possibly
discriminating against families with children or applicants of
any age, Loan/Asset Management staff should advise FHEO staff.
c.On-site Review Issues. The management agent must maintain the
property in suitable physical condition and must maintain all
records, books, accounts, documents, etc. in suitable condition
for on-site review.
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Exhibit 6-1
INDICATORS FOR TROUBLED/POTENTIALLY TROUBLED PROJECTS
A multifamily project may be considered troubled when it requires
assistance in order to meet its obligations and/or to provide the quality
of housing and services to which its owner committed in the rental
assistance contracts and/or Regulatory Agreement. Potentially troubled
projects are those where critical information regarding the operation of
the project is not available or where the project may soon require
assistance if action is not taken to address existing or emerging
difficulties. Indicators such a situation include:
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1.High or increasing vacancy rate.
2.A major system that requires replacement, major repair, or repair
beyond existing or potential project resources.
3.Persistent physical problems of a serious nature (such as health
and safety problems, security problems, deferred maintenance, or
lack of janitorial services or routine maintenance).
4.Improper or unauthorized distributions, as defined in HUD
Handbook 4370.2, Financial Operations and Accounting Procedures
for Insured Multifamily Projects, or unauthorized diversion of
project assets.
5.The Management Review or other financial analysis determined that
annual or monthly operating expenses exceed income potential and
will more than likely continue.
6.Project expenses are abnormally high or low compared to previous
years or comparable projects.
7.Project rents are abnormally low or in excess of authorized
limits.
8.The owner/sponsor has threatened or has declared bankruptcy.
9.There has been more than one request from the owner(s) to use
Reserve for Replacement Account money for the mortgage payment,
fuel, utilities, insurance, security, or for routine expenses for
which the account was never intended.
10.The Management Review reveals management policies or procedures
that jeopardize the project, as indicated by a below satisfactory
rating in one or more categories.
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11.There are persistent, validated resident complaints of a serious
nature, including but not limited to: harassment, leasing
irregularities, improper certification, discrimination, or fraud
by the project management or owner.
12.The owner/agent has not met the contractual, statutory and/or
managerial obligations and has not developed programs to address
them.
13.Annual financial statements disclose significant irregularities,
such as: qualified auditor's opinions; negative cash throw-offs;
line items that are inconsistent with each other, with the prior
years, or with similar projects; under-funded General Operating
Reserves (GOR), Replacement for Reserves, or escrow accounts; or
increasing accounts payable, receivables, or bad debts.
14.Failure to provide required or requested data with respect to
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fiscal items for significant matters involving the
management/operation of the project.
15.Physical inspection indicates serious emergency health and safety
hazards for which there is no acceptable plan of correction.
16.Section 8 units do not meet HQS and project funds are not
available to immediately correct the deficiencies.
17.Serious drug problems prevail in the complex or in the
neighborhood.
18.In the case of a non-profit, the Board does not meet the criteria
used when it was originally constituted.
19.The owner has threatened to abandon or has abandoned the complex.
20.Commercial space is unrentable, or is being rented at less than
market rents, causing a cash drain on the project, or commercial
space detracts from project liveability.
21.The mortgage is in default.
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
4381.5 REV-2
___________________________________________________________________________
CHAPTER SEVEN:
7.1
PROGRAM COMPLIANCE
GENERAL
While one of HUD's key objectives is building a constructive working
relationship with owner/agents, Loan/Asset Management staff need to be
prepared to take actions to compel owners to meet their
responsibilities if they fail to fulfill their obligations to HUD.
These actions include enacting sanctions against owners/agents who
violate the provisions of their agreement/contract with HUD. Strong
actions, such as sanctions, will only be taken when owners/agents do
not work with HUD to correct problems at their projects.
This chapter reviews HUD's authority to enforce compliance, describes
the major types of violations that can occur, discusses the sanctions
available to Field Offices in the event violations occur, presents the
procedures Loan/Asset Management staff should follow when they believe
a violation has occurred, and outlines additional enforcement actions
that can be taken in the event of continued noncompliance by
owners/agents.
7.2
AUTHORITY
The statutes establishing the programs for HUD-insured and
HUD-assisted properties provide HUD with the authority to impose civil
and criminal penalties in the event owners and/or their agents violate
program requirements.
Further, the Management Certification, Forms HUD-9839-a, b, or c
establishes that the management agent agrees to comply with all
applicable requirements and advises the agent that HUD may impose
civil and criminal penalties in the event the agent commits certain
violations.
7.3
COMPLIANCE VIOLATIONS
a.Compliance violations occur when owners/agents fail to meet their
responsibilities set forth in the HUD regulatory agreement or
assistance contract governing the property. The applicable HUD
Handbooks describe these responsibilities in greater detail.
Chapter 6, Section 1 of this handbook summarizes the principal
owner/agent responsibilities and references other handbooks as
appropriate.
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b.Types of Violations.
categories.
Compliance violations fall into five major
(1)Failure to Adequately Maintain the Physical Condition of the
Property. If an owner/agent has received proper notice of a
deficient physical condition and failed to take the
necessary action to correct the problem, the owner/agent may
be considered in violation of the applicable HUD
agreement/contract.
EXAMPLE: A physical inspection of a Section 8 Substantial
Rehabilitation project revealed electrical hazards and
inadequate heating. If the owner agent failed to take the
corrective actions specified in the notice from HUD within
the required time period, the owner agent would be in
violation of the project's HAP Contract.
(2)Failure to Follow Proper Management Practices.
owner/agent receives an unsatisfactory rating during a HUD
management review and does not take the necessary actions to
improve management performance at the project, the
owner/agent may be considered in violation of the applicable
HUD agreement/contract.
If an
EXAMPLE: The results of a management review conducted at a
236 project indicated that the owner/agent was not following
proper resident selection and occupancy procedures. After
30 days, if no steps had been taken to correct deficient
practices, the owner/agent would be in violation of the
regulatory agreement for the property.
(3)Financial Management Practices Inconsistent with HUD
Requirements. If a review of a project's financial
documents reveals that the owner's/agent's procedures for
handling its financial operations are not consistent with
HUD requirements, the owner/agent may be considered in
violation of the applicable HUD agreement/contract.
EXAMPLE: A review of the audited financial statements for a
221 (d)(3) BMIR project reveals that the agent incorrectly
allocated salary and fringe benefit costs for supervisory
personnel to the project account. If the agent fails to
return the improperly allocated funds to the project
account, the agent would be in violation of the project's
regulatory agreement.
(4)Failure to Follow Proper Record-Keeping and Reporting
Requirements. If the owner/agent fails to maintain project
books and records in a reasonable condition for proper audit
under HUD requirements or an owner/agent does not provide
the required reports to HUD, the owner/agent may be
considered in violation of the applicable HUD
agreement/contract.
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EXAMPLE: If the management agent of a 221(d)(4) project
failed to keep the necessary financial records and was
unable to submit a properly audited annual financial
statement, the agent would be in violation of the project's
regulatory agreement.
(5)Failure to Observe Fair Housing/Equal Opportunity
Requirements. If the owner/agent is found to have
discriminated against applicants or tenants on the grounds
of race, color, creed, national origin, gender, age, or
familial status, the owner/agent may be considered in
violation of the applicable HUD agreement/contract.
EXAMPLE: A review of tenant selection records reveals that
a management agent of a Section 8 project not designed
exclusively for the elderly was giving preference to
households without children.
c.Detecting Violations
1.The monitoring and follow-up activities described in Chapter
6 of this handbook are the primary methods for identifying
when violations have occurred. Again, these activities are:
(a)Physical inspections;
(b)Management reviews; and
(c)Financial reviews.
2.Loan/Asset Management staff may also discover violations
through less formal sources. These sources include:
(a)Reports from project residents or a local tenant
organization;
(b)Information provided by a state or local government
entity, such as a public housing authority or social
service agency;
(c)Complaints from neighborhood organizations; or
(d)Information from the mortgagee for the project.
If the information provided by these sources indicates that
a violation may exist, Loan/Asset Management staff should
take the necessary steps to gather any additional details
needed to properly assess whether a violation has occurred.
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7.4
TYPES OF SANCTIONS
a.HUD Field Office staff may pursue removal of the agent or
appropriate civil and/or criminal penalties as sanctions for
violations of HUD Regulatory Agreements and insured housing
program requirements. These sanctions are listed below.
Sanctions that may be used in cases of subsidy contract
violations are listed in the subsidy contract for the project.
b.Removal of an Agent. HUD Field Office staff may request that the
owner terminate the agent's contract.
(1)When an agent is removed, all records and assets are to be
turned over to the owner immediately, but in no event more
than 30 days after the date of termination.
(2)If the agent is liable under state law for unpaid bills,
then the agent may withhold the money required to pay these
expenses.
c.Civil Penalties. HUD Field Office staff may seek to impose the
following civil penalties as appropriate.
(1)A penalty of up to $25,000 for violations of the project's
Regulatory Agreement.
(2)A penalty of up to $25,000 for violations of an agreement to
use non-project funds for specific project needs (e.g.,
payments to the replacement reserve account) as a condition
of a transfer of physical assets (TPA), a Flexible Subsidy
loan, a modification of the mortgage terms, or a workout
agreement.
(3)A penalty up to double the value of the assets and project
income that the court determines was used in violation of
the project's Regulatory Agreement or any applicable
regulation.
(4)Referral to the Attorney General with a recommendation for
civil action, including mandatory or injunctive relief, for
non-compliance with fair housing statutes.
SPECIAL NOTE: Civil money penalties cannot be collected for
violations that are caused by the Department.
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d.Criminal Penalties. HUD Field Office staff may seek to impose
the following criminal penalties as appropriate.
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(1)A fine of up to $250,000 or imprisonment of not more than
five years for willfully using or authorizing the use of any
part of the project's rent, assets, proceeds, income, or
other funds for purposes other than meeting actual or
necessary expenses during a period when the mortgage note is
in default or the project is in a non-surplus cash position.
(2)A fine of not more than $10,000, imprisonment of not more
than five years, or both for knowingly and willfully
falsifying, concealing, or making any false, fictitious, or
fraudulent statements. This penalty also applies to the
acts of making a false document or using a document while
knowing it to contain any false, fictitious, or fraudulent
information.
(3)A fine of not more than $5,000, imprisonment of up to two
years, or both for:
(a)Knowingly making or signing false statements; or
(b)Willfully overvaluing any security, asset, or income
for purposes of obtaining any HUD-insured loan or
advance of credit; or
(c)Willfully overvaluing any security, asset, or income
for purposes of obtaining any extension or renewal of
any loan, advance of credit or mortgage or acceptance,
release, or substitution of any security on such loan.
7.5
PROCEDURES FOR RESPONDING TO VIOLATIONS
a.Advise Owner/Agent of Possible Violations. If information
obtained from monitoring activities or other sources indicates
that a violation may have occurred, Loan/Asset Management staff
must notify the owner/agent in writing.
(1)For HUD-insured projects, the notice should:
(a)State the specific violation that may have occurred and
cite the paragraph of the Regulatory Agreement, other
agreement, contract, certification, or warranty that
may have been violated.
(b)Indicate that the violation, if established, may
subject the owner/agent to administrative sanctions,
civil money penalties, and/or criminal penalties.
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(c)Request that the owner/agent respond in writing to the
allegation. In the response, the owner/agent should
admit or deny that the violation has taken place, and
provide a justification for the actions in question.
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(d)Allow the owner a reasonable amount of time to
investigate the allegation and submit a response.
(2)For HUD-assisted projects, Loan/Asset Management staff
should follow the procedures included in HUD Handbook
4350.5.
b.Establishing the Presence of a Violation
(1)In determining whether a violation has taken place,
Loan/Asset Management staff should thoroughly review all
explanations and supporting documentation submitted by the
owner.
(2)If necessary, interview the owner/agent and or any other
project representatives associated with the alleged
violation to gather additional information. All contact
should be documented with a letter confirming that the
conversation took place and reviewing the information
provided.
(3)If there is any doubt about whether a violation has taken
place, Loan/Asset Management staff should discuss the matter
with Field Counsel, the Office of General Counsel, or
Headquarters Desk Officers in the Office of Housing
Management.
(4)If the owner's/agent's response fails to provide adequate
explanation and justification that the circumstances
associated with the allegation do not constitute a violation
as stated in the notice to the owner, Loan/Asset Management
staff should make the determination that the owner/agent has
committed the alleged violation.
(5)If the owner's/agent's response provides sufficient evidence
that the alleged violation did not occur, Loan/Asset
Management staff should document in the project file the
evidence that led to this determination. Loan/Asset
Management staff should also prepare a letter to the owner/
agent indicating that in light of the owner's/agent's
response, no further action is being taken at this time.
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c.Issuing a Notice of Violation. If the Field Office determines
that the violation did occur, Loan/Asset Management staff must
send the owner/agent a letter indicating that the response
provided was inadequate and explaining why. The letter must also
state that:
(1)HUD has declared the owner/agent in violation of the
identified provision of the statute, Regulatory Agreement,
other agreement, assistance contract, certification, or
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warranty.
(2)The owner/agent must remedy the violation within the
specified reasonable period of time.
(3)If the violation is not corrected within the required time
period, the owner/agent will face possible administrative
sanctions, or civil and/or criminal penalties.
(4)The owner/agent is required to respond in writing to this
notice within 10 working days. The response must state the
corrective action the owner will take and agree to provide
certified, written confirmation that these actions have been
properly executed once the violation has been remedied.
d.Verifying Corrective Actions
(1)Upon receiving the owner's/agent's certification that the
violation has been corrected, Loan/Asset Management staff
must take any steps necessary to verify within a reasonable
period of time that the correction has been made.
NOTE: Loan management staff must independently verify that
a violation has been corrected even if the owner/agent
submits a third party certification of compliance.
(2)If the corrections have been made to HUD's satisfaction,
Loan/Asset Management staff should notify the owner/agent of
this determination once compliance has been verified.
e.Continued Noncompliance. Field Offices will use their authority
to impose sanctions whenever necessary to enforce program
requirements.
(1)If a compliance certification is not received within the
time period set forth in the violation notice, Loan/Asset
Management staff should take steps to assess the extent to
which the owner/agent has worked to correct the violation.
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(2)After reviewing owner/agent progress in addressing the
violation, Loan/Asset Management staff should consider
whether sanctions will be necessary to compel the
owner/agent to take the necessary corrective actions.
(3)Field Office staff should submit recommendations for
prosecution to obtain civil and criminal penalties to the
Regional Counsel. While administrative sanctions do not
require action by the Regional Counsel, Field Offices may
wish to have the counsel review the matter.
7.6
ADDITIONAL ENFORCEMENT ACTIONS
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a.In cases of extended noncompliance, HUD will consider taking the
following enforcement actions.
(1)Initiate legal action to place the property in receivership.
(2)Terminate the project's assistance contracts.
(3)Take steps to have the property declared in default of the
mortgage and initiate foreclosure proceedings.
b.These actions may be taken without further notice to the
owner/agent.
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
Click Here to Download MS Word version of Chapter 8
4381.5 REV-2
CHG-2
CHAPTER EIGHT:
SERVICE COORDINATORS
8.1
GENERAL
It is the Department's finding that service coordinators are
necessary to coordinate supportive services for the elderly,
disabled, and families residing in eligible housing
projects. Service coordinators are needed to link the
elderly or disabled residents residing in the projects to
the supportive services necessary for them to remain
independent and in their own homes.
Families living in assisted housing have various unmet
social needs which are difficult for management agents to
work with and resolve effectively. These unresolved social
needs have a devastating impact on individual families and
in turn directly impact the management of the project. In
some properties, resourceful owners and agents alone and/or
in conjunction with public or private organizations have
addressed these problems. These solutions, in the form of a
service coordinator, who is part of the management team,
have benefited individual tenants who in turn have assisted
in building community within the housing project. Problem
solving, which promotes active communication between
residents and the management team, makes management's job
easier, improves the lives of the tenants, and builds
community in the process.
Due to the limited amount of funds available to date less
than half of all project owners have funded a service
coordinator. However, HUD permits rent increases and the
use of residual receipts to fund service coordinators in
eligible projects with HUD approval. Projects may also
utilize the services of an "On-line Service Coordinator"
(OLSC), to work with a project's "Computerized Learning
Center" (CLC). (See Chapter 9 for further information.)
8.2
ELIGIBILITY
a.
Projects Serving the Elderly or Disabled. Various
Appropriations Acts for the Departments of Veterans
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Affairs and Housing and Urban Development, may provide
funds for grants for service coordinators for elderly
or disabled families in housing projects serving the
elderly or disabled participating in the following
programs: Section 8 New Construction,
8-1
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CHG-2
Substantial Rehabilitation, Section 202, State Agency,
Farmers Home, and Loan Management Set-Aside and
Property Disposition, where contract rents are adjusted
based on the AAF (as opposed to budget-based rents).
HUD will publish a separate Notice concerning specific
funds appropriated for service coordinators, when
necessary.
An owner/borrower of an eligible project must first
apply for grant funds designated for service
coordinators if available, prior to requesting approval
for a rent increase described in this Chapter. Once
these special grant funds are exhausted, projects
owners may apply under paragraph B below.
b.
Projects Serving Families, the Elderly or Disabled.
HUD may approve requests for the use of residual
receipts, budget-based rent increases or special
adjustments to fund service coordinators or OLSCs (see
Chapter 9). Requests to fund a service coordinator
will be evaluated under the criteria within this
notice, but must also be consistent with availability
of funds in a changing regulatory environment. Owners
must exhaust funds in the projects residual receipt
account prior to the Area Office's approval of a rent
increase (except under Section 202, see paragraph
8.5(a)below).
To qualify for eligibility for either the use of the
residual receipts or a rent increase, a 202 loan must
have closed. In addition, since there may be isolated
cases in other programs where the loan has not closed
or been endorsed, the requirement that the loan has
closed or been endorsed applies to all project owners.
Also, in some cases under the Section 202 program, the
project's reserves for replacement and residual
receipts are located in one account. In order for
these projects to be approved, the sponsor must agree
to provide separate accounts for the residual receipts
and reserve for replacements from the time of approval
forward.
In the following Section 8 programs project owners are
eligible to apply for a special adjustment in rents for
service coordinators in accordance with the
requirements outlined in this chapter: Section 8 New
Construction, Substantial Rehabilitation, Section
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CHG-2
202, State Agency, Farmers Home, and Loan Management
Set-Aside/Property Disposition Set-Aside, where
contract rents are adjusted based on the AAF (as
opposed to budget-based rents). These adjustments are
also available for OLSCS.
In all cases, rent increases may be affected by rents
policy in effect that Fiscal Year.
8.3
AUTHORITY
Authority for eligible costs for service coordinators for
elderly or disabled families in eligible housing projects is
addressed in Sections 671, 672, 674, 676 and 677 of the
Housing and Community Development Act of 1992 (42 U.S.C.
13631 and 13632). Authority for the use of residual
receipts for 202 projects is addressed in Section 202(j) of
the Housing Act of 1959 (12 U.S.C. 1701q(j)) as amended by
Section 602(e) of the Housing and Community Development Act
of 1992. Authority for the special adjustments is addressed
in Section 8(c)2(B) of the United States Housing Act of
1937, as amended, which reads in part:
"The contract shall further provide for the Secretary
to make additional adjustments in the maximum monthly
rent for units under contract to the extent he
determines such adjustments are necessary to reflect
increases in the actual and necessary expenses of
owning and maintaining the units which have resulted
from substantial general increases in real property
taxes, utility rates, or similar costs which are not
adequately compensated for by the adjustment in the
maximum monthly rent authorized by subparagraph A..."
There is no specific statutory authority for service
coordinators within projects other than elderly or disabled
families.
8.4
SERVICE COORDINATOR FUNCTIONS AND QUALIFICATIONS
The service coordinator and the OLSC normally reports to the
project administrator, executive director or director of
management in a management company. The coordinator will
also consult with tenant organizations and resident
management corporations, where appropriate.
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A service coordinator links tenants within the project to
supportive services or medical services provided by public
agencies or private practitioners within the general
community. The service coordinator may assess service
needs, determine eligibility for public services, and work
with the CLC or the OLSC (see Chapter 9).
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THE SERVICE COORDINATOR SHOULD NOT BE ASSIGNED
RESPONSIBILITY AS THE PROJECT'S RECREATIONAL OR ACTIVITIES
DIRECTOR, NOR PROVIDE SUPPORT SERVICES DIRECTLY (EXCEPT IN
EMERGENCY SITUATIONS). THE SERVICE COORDINATOR, ALSO,
CANNOT ASSIST WITH OTHER ADMINISTRATIVE WORK NORMALLY
ASSOCIATED WITH THE PROJECT(S) OPERATING BUDGET.
a.
Eligible Housing Project Serving the Elderly or
Disabled. The service coordinator hired by the owner
of a project for the elderly or disabled must meet the
requirements of paragraph 1, 2 and 3 below.
(1)
Qualification of a service coordinator:
A.
A Bachelor of Social Work or degree in
Gerontology, Psychology or Counseling is
preferable; a college degree is fully
acceptable. However, individuals without a
degree, but with appropriate work experience
may be hired.
Supervisory experience may be necessary in
some team situations in which a professional
supervises a number of nonprofessional or
paraprofessional "aides".
B.
Training in the aging process, elder
services, disability services, eligibility
for and procedures of Federal and applicable
State entitlement programs, legal liability
issues relating to providing service
coordination, drug and alcohol use and abuse
by the elderly, and mental health issues.
NOTE:
This requirement is not a
prerequisite for hiring.
The Owner/borrower must certify that training
requirements, if not met at the point of
hiring, will be satisfied within one year.
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C.
Two to three years experience in social
service delivery with senior citizens and
nonelderly disabled. Some supervisory or
management experience may be desirable.
D.
Demonstrated working knowledge of supportive
services and other resources for senior
citizens and non-elderly disabled in the area
served by the project.
E.
Demonstrated ability to advocate, organize,
problem-solve and provide results for the
elderly and disabled served.
F.
In situations where the management of a
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buildings) wants to create a services "team"
in which a service coordinator supervises one
or more "aides" (nonprofessional persons see item 2. below), the coordinator should
have appropriate professional staff
experience AND prior supervisory or
management experience.
(2)
(3)
Aides working with a service coordinator:
A.
It is desirable, but not required, that aides
have a college degree; they should, however,
have appropriate experience in working with
the elderly and/or disabled.
B.
Options for structuring an "aide" situation:
-
set up an internship or work study
program with local colleges and
universities to assist in carrying out
some of the functions noted under
paragraph 8.4(a)(1)(D) above; or,
-
use local college and university
programs to provide planning guidance to
project staff or provide program
evaluation/assessment functions.
The major functions of the service coordinator
are:
A.
Provides general case management (including
intake) and referral services to all
residents needing such assistance.
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May provide formal case management (i.e.,
evaluation of health, psychological and
social needs, development of an individually
tailored case plan for services and periodic
reassessment of the resident's situation and
needs) for a resident when such service is
not available through the general community.
(This will probably occur in rural areas.)
NOTE:
There may be times when there will
be difficulty in linking up
residents with a community
assessment agency in a timely
manner. Therefore, the project may
want to consider setting up a
Professional Assessment Committee
(PAC) to work with the Service
Coordinator to perform initial
assessments.
A PAC would be composed of at least three
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members, one of which must be a qualified
medical professional, with all members
professionally competent to assess frailty
and functional independence.
For projects wanting to consider setting up a
PAC, see the guidance given in the CHSP
regulations, 24 CFR Section 700.220.
A PAC member shall NOT be paid for his/her
services with Section 8 funds.
B.
Establishes linkages with all agencies and
service providers in the community; shops
around to determine/develop the best "deals"
in service pricing to assure individualized,
flexible and creative services for the
involved residents).
C.
Sets up a directory of providers for use by
both project staff and residents.
D.
Refers and links the residents of the project
to service providers in the general
community; these are, for example, case
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management, personal assistance, homemaker,
meals-on-wheels, transportation, counseling,
occasional visiting nurse, preventive health
screening/wellness and legal advocacy.
E.
Educates residents on service availability,
application procedures, client rights, etc.,
providing advocacy as appropriate.
F.
May develop case plans in coordination with
assessment services in the community or with
a PAC.
G.
Monitors the ongoing provision of services
from community agencies and keeps the case
management and provider agency current with
the progress of the individual. Manages the
provision of supportive services where
appropriate.
H.
May set up volunteer support programs with
service organizations in the community.
I.
Helps the residents build informal support
networks with other residents, family and
friends.
J.
May provide training to project residents in
the obligations of tenancy or coordinate such
training.
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b.
K.
May educate other staff on the management team
on issues related to aging in place and
service coordination, to help them to better
work with and assist the residents.
L.
May serve part-time as an OLSC (see paragraph
9.5 (g)).
Eligible Housing Projects Serving Families. The
following is guidance which the owner should follow
when hiring a service coordinator and in developing a
job description.
(1)
Qualification of a service coordinator in family
projects:
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(2)
A.
A Bachelor of Social Work or degree in
Psychology or Counseling is preferable.
Supervisory experience may be necessary in
some situations.
B.
Two to three years experience in social
service delivery with families.
C.
Demonstrated working knowledge of supportive
services and other resources in the area
served by the project.
D.
Demonstrated ability to advocate, organize,
problem-solve and provide results for
families.
Functions of a service coordinator in family
projects:
The following provides a list of functions a
service coordinator may perform. The exact role
for the service coordinator shall be designed to
meet the needs of the project's community.
A.
Provides general case management which
includes intake, education (services
available and application procedures) and
referral of residents to service providers in
the general community. These social services
may include job training, drug and alcohol
counseling, preventive health screening, and
other family services.
B.
Sets up Service Agency Listing for Self-Referral.
This directory may include a
listing of State and/or local service
providers that residents can contact for
assistance (e.g., services to families,
children, individuals who are elderly,
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persons with disabilities, emergency
assistance). In many cases State and local
governments can also provide a listing of the
non-profit agencies with which they contract
for services.
C.
Sponsors educational events which may include
subjects relating to health care, job search
seminars, life skills training, etc.
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8.5
D.
Facilitates the formation of Self-Help Groups
within the project's community if a
particular need is evident. The formation of
small groups will assist in fostering a sense
of community and encourage residents' efforts
to support and assist each other.
E.
Monitors the ongoing provision of services
from community agencies and keeps the case
management and provider agency current with
the progress of the individual. Manages the
provision of supportive services where
appropriate.
F.
Sets up volunteer support programs with
service organizations in the community.
G.
Helps the residents build informal support
networks with other residents, family and
friends.
H.
Provides training to project residents in the
obligations of tenancy or coordinates such
training.
I.
May serve part-time as an OLSC.
QUALITY ASSURANCE
Management must assure that the service coordinator function
is effectively implemented. Therefore, quality assurance is
an allowable administrative expense. A project may propose
a cost of 8-10 percent of the service coordinator salary to
provide limited monitoring oversight of the service
coordinator by a qualified third party. The project must
provide a written justification along with the budget.
Current salaries of in-house staff may not be augmented for
this purpose.
8.6
OWNER'S SUBMISSION REQUIREMENTS
The following provides guidance to the owner regarding
submission requirements for the use of residual receipts and
rent increases. These funding mechanisms may be used alone
or in conjunction with one another. For example, if
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the residual receipts are not sufficient to cover the entire
cost of a service coordinator, the owner may request to use
the remaining residual receipts in addition to requesting a
rent increase. However, residual receipts shall be
exhausted prior to requesting a rent increase.
a.
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Use of Residual Receipts Accounts in Project For the
Elderly or Disabled. If the project has funds in the
residual receipts account, it shall use these funds for
a service coordinator prior to requesting HUD approval
of a rent increase. An exception to the use of all
residual receipts is in the case of Section 202
projects. Section 602(e) of the HCDA of 1992, limits
the use of residual receipts, by amending Section
202(j) of the Housing Act of 1959. if approved by HUD,
the owner of a Section 202 project may use any residual
receipts held for the project in excess of $500 per
unit to provide a service coordinator.
(1)
Requests for the release of funds from the
residual receipts account shall be made in writing
to the HUD State or Area Office. The request
shall provide a detailed description of the
proposed use of the funds, in accordance with
Handbook 4350.1, Rev-1, Multifamily Asset
Management and Project Servicing, Chapter 25,
Residual Receipts.
(2)
Owners should also analyze the amounts in the
Reserve for Replacements Fund in light of
anticipated replacement needs. They should rely
on their own personal knowledge of the physical
condition of the project, evaluations made by
their managing agents, and physical inspection
reports furnished by HUD. After reviewing this
information owners should project how much money
needs to be on deposit in the Reserve Fund at
specific points in the future. They also need to
consider whether funds should be transferred from
the residual receipts account to cover real or
potential shortfalls. See Handbook 4350.1, Rev-1,
Multifamily Asset Management and Project
Servicing, Chapter 4, Reserve Fund for
Replacements.
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Based on the size of a project and the amount of
the available funds, significant withdrawals from
the residual receipts account should be discussed
with the Asset Management staff in the HUD Area
Office before making the written request.
Disbursements from this fund may be made only
after receipt of written consent from HUD. The
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Asset Management Branch Chief will make every
reasonable effort to review and act upon the
owner's request within 30 days of its receipt.
b.
(3)
Owners using residual receipts for this purpose
must submit an annual report to the HUD Area
Office describing the uses of the residual receipt
funds.
(4)
Owners shall meet the requirements of paragraphs
8.4.(a).
Use of the Residual Receipts Account in Family
Projects. Requests for the release of funds from the
residual receipts account must be made in writing to
the HUD Area Office. The request must provide a
detailed description of the proposed use of the funds,
in accordance with Handbook 4350.1, Rev-1, Multifamily
Asset Management and Project Servicing, Chapter 25,
Residual Receipts. The disbursements from this account
may be made only after receipt of written consent from
HUD.
Owners may follow requirements in paragraph 8.4(b).
c.
Budget-Based Rent Increase Process For Projects Serving
The Elderly, Disabled Or Family Projects. If a
project's residual receipts account has been exhausted,
the project owner may request a budget-based rent
increase. In cases where the project does not have a
residual receipt account (this is true for some 202
projects), the owner must agree to separate the
reserves for replacement from the residual receipt
account from this point forward.
(1)
Requests for a budget-based rent increase must
follow the guidance in 4350.1, REV-1, Chapter 7.
(2)
Owners of projects for the Elderly must meet the
requirements in paragraphs 8.4(a).
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(3)
Owners of Family projects may meet the
requirements in paragraph 8.4(b).
Rent adjustments must be consistent with rents policy
in effect at the time of request.
d.
Special Rent Adjustments. Once a project's residual
receipts account has been exhausted, the project owner
may request a Special Rent Adjustment to cover the cost
of a service coordinator.
Very-low income families living in assisted housing
have various unmet social needs. These unmet social
needs place a high level of stress on the individual
family unit. This stress results in a dysfunctional
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system of relating to others within the family unit,
the project, and those within the larger community.
The result of this impacts the management and the
physical condition of the project.
Section 8(c)(2)(B) of the United States Housing Act of
1937 provides: "The contract shall further provide for
the Secretary to make additional adjustments in the
maximum monthly rent for units under contract to the
extent he determines such adjustments are necessary to
reflect increase in the actual and necessary expenses
of owning and maintaining the units which have resulted
from substantial general increase in real property
taxes, utility rates, or similar costs which are not
adequately compensated for by the adjustment in the
maximum rents ... "(emphasis added).
Pursuant to this provision and in order to determine
whether costs qualify for consideration for a special
adjustment under the "or similar costs" provision of
the statute the costs have to meet the following
standards:
(1)
Are the cost items "similar" to those identified
in the statute and regulations, i.e., necessary
expenses of owning and maintaining the units
within the project.
(2)
Has there been a "substantial and general
increase,, in the cost at issue? In the case of
service coordinators for families, is there a
causal relationship between the "dysfunctional
family" and the increased cost?
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(3)
Has the increase been "general"? For example, has
this increase been experienced by owners of other
than the immediate project and particularly
projects other than merely Section 8 assisted
projects (e.g. 236's or 221(d)(3) BMIRs)?
Owners whose costs meet these three standards, will
satisfy the legal requirements for consideration for
special rent adjustments. In addition, requests must
meet the following requirements:
(4)
Calculations for the special adjustment shall be
made on Form HUD-9833B: Section 8 Annual Contract
Rent Adjustment Worksheet, Part G, "Special
Adjustments for Taxes, Insurance or Utility Cost
Increases. ". This form is located in Handbook
4350.1, Rev-1, Chapter 34, Appendix 2. Owners are
instructed to add an entry for "Other" (to cover
"similar cost" language in the statute and
regulations) in the blank space on the right side
of the form next to the entries for "Taxes,"
"Insurance," and "Utilities" and specify that the
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special adjustment is for a service coordinator.
(5)
In the case of an elderly project, owners shall
meet the requirements in paragraphs 8.4(a)(1) and
(2). However, in the case of family projects,
owners may follow, but are not required to adhere
to the guidance in paragraph 8.4 (b) (1) and (2) .
Rent adjustment must be consistent with rents policy in
effect at the time of request.
e.
Elderly Projects Constructed Under the 202 Capital
Advance Program. Projects constructed under this
program must submit an operating budget for HUD review
and approval. In cases when an owner did not initially
propose a service coordinator, the owner may request an
amendment to the Project Rental Assistance Contracts
(PRAC). The approval of this request will be based on
the availability of funds. The sponsor shall follow
the procedures below:
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8.7
(1)
Submit a request for an increase in PRAC along
with supporting documentation. This request must
certify that at least 25% of the residents are
frail and at risk, and otherwise be consistent
with the requirements of Notice H-93-71 and its
successors.
(2)
Owners shall meet the requirements in paragraphs
8.4 (a) (1) and (2) .
AREA OFFICE/CONTRACT ADMINISTRATOR PROCESSING INSTRUCTIONS.
a.
Residual Receipts.
(1)
Section 202 projects.
A.
The Asset Management Branch Chief can require
when necessary a complete physical inspection
of the project. The inspection will
determine pending and future repairs and
replacements, based on the age and condition
of the project.
B.
Based on the physical inspection and
information obtained from the project owner,
an Asset Manager shall analyze the Reserve
for Replacements Account to assure that it is
sufficiently funded to cover pending
replacements. If the Reserve Account is
insufficiently funded, a transfer of funds
from the residual receipts account to the
Reserve for Replacement Account will be
required to cover the shortfall. This shall
be done before authorizing release of any of
the residual receipts.
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(2)
b.
All other projects (except for Section 202) shall
follow the Handbook 4350.1, REV-1, Multifamily
Asset Management and Project Servicing, Chapter 25
Residual Receipts.
Budget Based Rent Increase. Review the request for a
budget-based rent increase in accordance with 4350.1,
REV-1, Chapter 7, and current rents policy, if
appropriate.
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c.
Special Rent Adjustment
(1)
Owners must meet the legal requirements for
consideration of a special rent adjustment as
stated in paragraph 8.5(d). However, such requests
for special rent adjustments for service
coordinators for families should also include a
review of specific circumstances for each case in
applying these requirements.
(2)
Area Offices/Contract Administrators will need to
review the project's contract authority to
determine if it is adequate to meet the projected
demands for housing assistance for the remaining
incremental terms of the contract because it will
be paid out of the project's contract/budget
authority. If contract authority is inadequate to
meet projected demands, a request for additional
funding may be forwarded to Headquarters, Office
of Multifamily Housing Management, Program Support
Branch, for Contract Amendments.
(3)
Review of Form HUD-9833B, Section 8 Annual
Contract Rent Adjustment Worksheet, Part G,
"Special Adjustments."
(4)
Area Offices/Contract Administrators are
instructed to follow existing instructions in
Handbook 4350.1, Chapter 34 for processing special
rent adjustment. In particular, paragraphs 34-6
through 34-8 provide general processing
instructions, including a walkthrough of how to
compute the actual dollar amount of the special
adjustment to approve applicable "back out"
procedures. The instructions and requirements
contained therein are incorporated here by
reference.
The expiration of a special adjustment does not
constitute a "reduction in rent." This point is
especially relevant to Section 142(d) of the
Housing and Community Development Act of 1987,
which limited reductions in Section 8 contract
rents to specific causes. Reductions for other
reasons are prohibited unless agreed to by the
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owner. The owner, by accepting the special
adjustment, agrees to this reduction when the need
for the rent increase no longer can be justified.
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Field Office should also consider adjustments in
terms of current rents policy.
d.
8.8
Elderly Projects Constructed Under The 202 Capital
Advance Program:
(1)
The HUD Area Office will request and ask for
additional information as necessary and approve it
as appropriate.
(2)
Approved requests will be forwarded to the
Director of Funds Management Division. Project
funding will be based on the availability of
dollars at the time the request is submitted to
Headquarters.
APPEALS OF SPECIAL RENT INCREASE DECISIONS
Owner appeals will follow existing procedures as set forth
in HUD Handbook 4350.5, Subsidy Contract Administration and
Field Office Monitoring, Section 2. The requirements of that
part are incorporated here by reference. In summary, the
first level of appeal is to the HUD Area Office or Contract
Administrator which issued the contested decision. This
appeal to the Area Office/Contract Administrator is at least
one administrative level above the level which made the
final decision on the owner's original submission.
8.9
TRAINING GUIDELINES FOR SERVICE COORDINATORS
a.
General. This Section provides guidance for training
of service coordinators working in HUD-assisted
projects serving residents who are elderly or have
disabilities, including those funded under the
Congregate Housing Services Program (CHSP). It also
provides guidance for multifamily properties serving
families and the On-Line Service Coordinator (OLSC).
While the statute mandates training requirements for
service coordinators in housing serving elderly or
residents with disabilities, it does not mandate
training in projects serving families or the OLSC. In
the case of HUD-assisted projects serving families,
owner/agents must follow guidance in chapter six
("Training Costs for Front-Line Staff"), prior, and
Subparagraph 8(f), page 8-28, below, which provides
suggested training areas for family projects with
service coordinators.
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The training guidelines enhance the service
coordinator's current level of knowledge and skills
which will improve his/her effectiveness in working
with residents. The guidelines offer a general
framework for developing training programs to meet the
needs of service coordinators; they also allow
flexibility in training design and delivery by vendors
outside the Department.
b.
Authority. Statutory authority for training guidelines
for service coordinators serving projects for the
elderly or people with disabilities is found in
Sections 671 and 672 of the Housing and Community
Development Act Amendments of 1992 (HCDA) (41 USC
8011). Section 671 requires training for service
coordinators serving projects for the elderly or people
with disabilities. Section 672 of the HCDA states the
minimum requirements as: "Such qualifications and
standards shall include requiring each service
coordinator to be trained in the aging process, elder
services, disability services, eligibility for and
procedures of Federal and applicable State entitlement
programs and legal liability issues relating to
providing service coordination, drug and alcohol use
and abuse by the elderly and mental health issues."
Training for service coordinators for families and the
OLSC's are not a statutory requirement.
c.
Implementation - Projects With Service Coordinators
Serving The Elderly Or People With Disabilities.
1.
Eligibility. Training for service coordinators
qualifies as an eligible project expense if the
proposed training relates to the guidelines
herein, i.e., to enhance the service coordinator's
knowledge and skills in the identified subject
areas. Associated costs of the training activity
(including travel and lodging) considered
reasonable and customary in accordance with HUD
travel requirements are also allowable.
2.
Minimum Training Requirements. All service
coordinators serving the elderly and people with
disabilities must have met a minimum of 36
training hours of classroom/seminar time before
hiring, OR will complete these minimum training
requirements within 12 months of initial hiring.
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The 36 hours MUST, cover ALL nine of the following
subject areas:
The first seven of these are statutory:
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o
The Aging Process - see subparagraph 8.8 (d)
(5) (a).
Note 1:
o
Group Homes and Independent Living
Complexes serving non-elderly residents
with disabilities need only address this
issue as necessary and consistent with
their resident population.
Elder Services - see subparagraph
8.8(d)(1)(a).
Note 2:
See Note 1, above.
o
Disability Services - see subparagraphs
8.8(d)(1)(b) and 8.8(5)(d).
o
Federal and Applicable State Entitlement
Programs covering both the elderly and people
with disabilities - see subparagraphs
8.8(d)(2)(a) and (b).
o
Legal Liability Issues Relating to Providing
Service Coordination - see subparagraphs
8.8(d)(2)(c) and (d).
o
Medication/Substance Abuse - see subparagraph
8.8(d)(5)(b)
o
Mental Health Issues see subparagraphs 8.8 (d)
(5) (c) and (e)
The last two are additional areas considered
critically important for service coordinators
serving the elderly or people with disabilities.
o
Strategies for Communicating Effectively in
Difficult Situations - see subparagraph
8.8(d)(4)(a).
o
Strategies for Dealing with Cognitive
Impairments - see subparagraphs 8.8(d)(5)(e).
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Service Coordinators must meet the statutory
requirements before requesting approval for
additional training in other core subject areas.
3.
Continuing Education. After completion of
statutory training requirements, all service
coordinators serving the elderly or people with
disabilities should attend at least 12 hours of
training annually. Continuing education is
necessary in order to be an effective professional.
At a minimum, service coordinators must remain
current on changing statutes at all levels and
current practices in aging and/or disability
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issues.
4.
d.
Documentation. Project managers must document
conformance with training requirements by listing
the subject matter, length of time of the course
covered (e.g., 6 hours), sponsoring organization,
date(s) and cost. Such information must be
available to HUD staff on management reviews of the
project site, if requested (see subparagraph
8.8(e)).
General - Guidelines - Service Coordinators Serving
Projects With Elderly Or People With Disabilities. There
are five categories, or "core areas" of service
coordinator training: The Professional Service
Coordinator; Government Programs and (Legal)
Requirements; Community Relations; Communications; and,
Current Issues.
Each core area encompasses a broad array of related
skills, knowledge and abilities in which training can be
provided. Also, each core area can be broken down into
"skills areas," from which a training course, seminar,
symposium, etc. can be tailored. While training can be
developed based on one or a combination of the skills
areas, the method of presentation and exact content of
training material is up to the training provider or
vendor.
Additionally, project management is encouraged to provide
an orientation regarding general project management
functions to the coordinator (see subparagraph 8(d)(6),
following).
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NOTE 3:
The areas listed below that have an asterisk (*)
denote those in which there are statutory minimum
requirements for service coordinators serving
elderly/ disabled populations, as discussed under
subparagraph 8 (c) (2) .
The Office of Housing encourages the involvement of other
members of the property management team in service
coordinator training as appropriate and necessary to that
specific property. The more service coordinators and
other members of the property management teams understand
each others roles, functions and responsibilities, the
smoother the operation of the project. Training may be
approved as an eligible project expense in the following
areas:
1.
The Professional Service Coordinator.
This core area addresses the concept of service
coordination, the role of the service coordinator
in relation to the residents of the community and
the other staff of the property, and administrative
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aspects of service coordination. It also focuses
on the resident population being served,
specifically addressing and meeting their needs
through supportive service provision. Eligible
training includes:
The following statutory subjects:
a.
Supportive Services for the Aging/Elder
Services *
The network and array of services available to
the senior community for independent/assisted
living.
Note 4:
b.
See Note 1, page 8-18, prior.
Supportive Service Needs of Non-Elderly People
with Disabilities *
The network and array of services available to
people with disabilities for
independent/assisted living.
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The following subjects are optional:
c.
Role of Service Coordinator
The purpose, responsibilities and functions
of the service coordinator.
d.
Identifying Service Needs and Availability
The methodology for identifying needs of
residents and service availability to meet
those needs including case management and
consumer research techniques; may involve
cultural diversity issues.
e.
Monitoring and Evaluating Services,
Effectiveness, Adequacy and Need for Changes
The maintenance of established services plans
(also known as case plans or care plans) and
how to evaluate their effectiveness, adequacy
and need for changes.
f.
Networking
The process of establishing linkages with
service providers and tapping resources to
enhance service provision.
g.
Creative Strategies in Service Provision
The examination of alternatives to
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traditional approaches in service provision.
h.
Ethics/Confidentiality
Ethical considerations in performing the
service coordinator job with sensitivity and
professionalism.
i.
Recordkeeping, and Reporting
Techniques for keeping organized records and
files to achieve service coordinator
recordkeeping and reporting goals;
development of useful forms for effective
reporting purposes.
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2.
Government Programs and Legal Requirements. This
core area encompasses the knowledge necessary to
administer service coordination in accordance with
federal, State and local laws and program
requirements. Eligible training includes:
The following subjects are statutory:
a.
Federal Programs & Requirements
*
Federal laws and associated requirements
which impact the service coordinator's job,
including, but not limited to: The Older
Americans Act, Community Services Block
Grants, the Fair Housing Act, Section 504 of
the Rehabilitation Act, the Americans with
Disabilities Act, the Developmental
Disabilities Act, and appropriate Civil
Rights statutes.
b.
State-Administered Programs &
Requirements/Entitlement Programs
*
State-specific requirements which impact
service coordinators, including, e.g.,
entitlement programs such as State-administered
Medicaid or other supportive
service programs.
c.
Legal Liability *
Issues of legal liability for the service
coordinator.
The following subjects are optional:
d.
HUD's Service Coordinator Program
Basic policy and procedures on HUD's Service
Coordinator Program.
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e.
Locally-Administered Programs Requirements.
Local government and other program
requirements which impact service
coordinators, e.g; the non-governmental
network; geriatric assessment services;
availability of locally-funded services
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(e.g., homemaker, meals-on-wheels, disability
counseling); area agencies on aging.
3.
Community Relations. This core area addresses
skills needed to promote good relations between
and among residents, staff, and the broader
community. The following subjects are optional:
a.
Working with Resident Organizations
Strategies to develop and maintain resident
interest in fostering community spirit and
supporting service provision; may include
strategies to address cultural diversity
issues within the project.
b.
Support Networks for Residents
Identifying the various support networks
available to residents (family, community
service programs, other residents, self-advocacy
groups, etc.) and ways to enhance
those networks.
c.
Peer Networks
Creating one's own network as a service
coordinator; effective vehicles for
sharing/learning information from one's
peers.
d.
Working with Volunteers
Tapping into the local volunteer network;
establishing a formal volunteer program.
e.
Working with Aides
How to structure an aide or paraprofessional
arrangement to assist the service
coordinator, and associated supervision
needed.
f.
Working with Management Agents
Understanding the management agent's role and
priorities; techniques on how to work in
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concert with management agents.
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4.
Communications. This area focusses on the
interpersonal skills needed to establish and
maintain a successful service coordination
program. Eligible training subjects include:
The following subject is required:
a.
Communicating Effectively in Difficult
Situations *
Ways to promote conflict resolution,
community harmony and positive attitudes;
methods to deal with uncooperative or
unresponsive individuals receptivity to
others, including service providers.
The following subjects are optional:
b.
Negotiation/Brokering
Techniques on effective negotiation and
bartering for services; identifying
resources/assets in exchange for services.
c.
Counseling
Skills in counseling residents and families;
effective listening to facilitate problem-solving.
May involve dealing with cultural
diversity issues.
d.
Advocacy
Effective ways to be an advocate for the
resident population and service coordination.
e.
Teamwork/Consensus-Building
Group dynamics skills in achieving consensus,
teambuilding.
f.
Motivation
Strategies in helping residents to realize
they can make their own choices and take
effective action. May involve cultural
diversity issues.
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Outreach Strategies
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Effective ways to tap resources (residents,
services, funds) to market your service
coordination efforts.
5.
Current Issues. This core area addresses issues
and problems in serving residents, who are elderly
or people who have disabilities, in HUD projects
as they operate in contemporary society. Eligible
training includes:
The following subjects are statutory:
a.
An Aging Population/Aging Process
*
The physical, mental and social changes
associated with the aging process; the aging
of America's population.
Note 5:
b.
See Note 1, page 8-18, prior.
Medication/Substance Abuse *
The use/abuse of medications, alcohol and any
other substance by the elderly or people who
have disabilities.
c.
Mixed Populations *
The issues confronting service coordinators
and managers in serving populations that
include both elderly and people with
disabilities and methods to work effectively
with such populations.
d.
The Disabled Population *
Examination of the physical, mental and
social changes associated with the aging
process for residents who have disabilities;
more general examination of the types of
disabilities and how to best coordinate
service needs.
The following subject is required:
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e.
Strategies for Dealing with Cognitive
Impairments *
The signs and symptoms of mental illness or
depression among the elderly and people with
disabilities; how to serve populations with
Alzheimer's disease, dementia and other forms
of cognitive impairment.
The following subjects are optional:
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f.
Other Health Problems Among the Aging
The common health problems experienced as one
ages (e.g. arthritis, osteoporosis/bone
fractures).
g.
Crime and Self-protection
Common crimes committed against residents who
may be elderly or people who have
disabilities; how to serve the elderly or
people with disabilities in making them aware
of crime and how to protect themselves.
h.
Death and Loss
Helping the residents who are elderly or who
have disabilities in dealing with death of
loved one (e.g. spouse, friend, roommate).
May involve cultural diversity issues.
i.
Living Wills/Trusts
Fundamentals of living wills and establishing
trusts; how to introduce these instruments to
your residential population.
j.
Guardianship/Power of Attorney
Legal fundamentals of working with residents
and families to assign power of attorney and
guardianships, where appropriate.
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On-Line Service Coordination
Fundamentals of computers, including distance
learning, if appropriate, local computer
resources and use of the worldwide web (see
Chapter 9, following).
6.
Administration/Project Management. This subarea
deals with a basic understanding of the property
in which the service coordinator operates. The
service coordinator needs general understanding,
awareness and appreciation of the basics of
project management, and should be attuned to
issues concerning others on the management staff.
Thus, for the following subjects, appropriate
members of the project's or the property
management team should provide an orientation
sufficient for the service coordinator's needs.
Training costs in the following subject areas are
not normally approvable.
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a.
Resident Selection and Termination
The interviewing/intake process for new
residents, the termination process and other
related procedures.
b.
Occupancy Issues
The examination of occupancy
problems/violations and identifying
associated service needs (e.g. good neighbor
programs). Also, provide a general
understanding in plain language and
reasonable accommodation practices.
c.
Emergency Procedures
The fundamentals of safe crisis handling;
fires; CPR; first aid; conduct in different
emergency situations.
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d.
Basics of Finance/Accounting
An introduction to fundamentals of
bookkeeping/accounting procedures; essential
components of a financial statement;
understanding budgeting.
e.
State/Area Office Management Review. When doing an on-site
management review of projects for the elderly or
people with disabilities subject to Handbook 4350.1,
Chapter 6, include a check of whether or not there is
documentation that the coordinator has met the training
requirements or is in the process of receiving
appropriate training. Any findings should be written in
narrative format as an addendum to Form HUD-9834B,
Management Review Questionnaire" and summarized on the
Form HUD-9834, "Management Review Report", under Section
VI, General Management Practices, which is sent to the
project manager.
f.
Guidelines - Service Coordinators Serving Family
Projects. There are no minimum training requirements for
service coordinators in family projects. The Office of
Housing is offering general guidance to assist owners of
family projects address training needs of coordinators,
as appropriate, either upon hiring or to meet needs which
arise during their tenure.
Training for family projects is an eligible project
expense under this Handbook; see page 6-32.
The subject areas noted below are EXAMPLES of current
issues which may be useful for coordinators working in
family projects; they are NOT all-inclusive. Family
project owners may use discretion in determining training
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needs for coordinators.
Training areas could include:
(1)
Single Head of Households - Issues and service
needs confronting one-parent families;
(2)
Spousal Abuse - Signs of spousal abuse; how to
deal with it, including coordinating professional
help and counseling;
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(3)
Child Abuse - Signs of child abuse and how to deal
with such situations coming to light, including
facilitating intervention of legal authorities and
professional counseling;
(4)
Child Care - locating and providing child care
(e.g. day care) on/off-site;
(5)
Building Safe Communities - Identifying strategies
to increase safety in the project(s) (e.g.
public/private partnerships, neighborhood watch
groups);
(6)
Economic Development and Employment Opportunities
- Strategies and training associated with
developing economic development opportunities for
the residents, both on and off-site e.g. small
business development, job training programs, how
to get and hold a job, etc.);
(7)
Educational Opportunities - Existing programs
(e.g. community colleges, GED Program) enabling
residents to set and pursue educational goals;
(8)
Drug/Alcohol Abuse - Types of common drugs/alcohol
abuse and associated behavioral patterns. Getting
emergency support and learning what is the local
referral process for professional treatment;
(9)
Neighborhood Violence - Exploring causes of
violence, including gang violence, and successful
ways to combat it;
(10) Youth Services - Approaches for tapping into
existing or creating new programs and services for
youth (e.g. boys'/girls' clubs, sports clubs,
recreation centers) as ways of facilitating
community building, positive peer relationships
and alternatives to resorting to crime;
(11) Disability Issues - Approaches for working with
residents with different types of disabilities;
understanding relevant programs and statutes;
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(12) Cultural Diversity - Approaches for working with
religious, racial and ethnic differences among
resident groups and conflict resolution, where
appropriate; and
(13) On-Line Service Coordination - Approaches to
dealing with establishing and administering a
computerized learning center in a project,
including, but not limited to: Networking skills
and educational techniques, training methodologies
and facilitating skills, computer skills, distance
learning equipment (if appropriate), and use of
the world wide web. (see Chapter 9 for further
information.)
(14) Other subject areas deemed necessary.
(15) Project management is also encouraged to provide
in-house cross-training for family service
coordinators in areas noted in subparagraph
8(d)(6), above.
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
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CHAPTER 9
NEIGHBORHOOD NETWORKS
9.1
PURPOSE: This chapter briefly outlines the development and
placement of Computerized Learning Centers (CLCS) with
Neighborhood Networks Business Plans in HUD-insured and
assisted housing. It describes the Neighborhood Networks
initiative concepts, suggests methods of funding which may
be used, defines eligible properties and costs, states
proposal contents and outlines the local HUD office review
process. A Neighborhood Networks Center/CLC can provide
hope and positive focus to residents about the future; it's
presence can be a factor in cutting crime and vandalism.
NOTE:
9.2
THIS IS A TOTALLY VOLUNTARY PROGRAM FOR ALL
OWNERS/AGENTS AND RESIDENTS.
BACKGROUND: The Department has observed the impact that
experimental programs have had in providing for economic and
educational needs of assisted housing residents. Many
programs use a concept of "place-based" development to meet
the needs of the residents where they live. There are
increasing indications that these programs result in better
neighborhoods and stronger real estate.
The Department is encouraging the use of technology in
place-based development opportunities to help residents of
insured and assisted housing attain jobs through job
training, telecommuting, microenterprise development (see
Paragraph 9.2(e)(1), following) and other job-creating
strategies.
This Chapter presents one way in which owners and residents
can work together to prepare for and manage change, and
provides options to tenants for economic self-reliance.
There are other ways as well, e.g., "Campus of Learners" in
public housing, direct grants from Foundations and state and
local governments. Field offices and housing developments
should focus on Results rather than "process."
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a.
WHAT IS "NEIGHBORHOOD NETWORKS"?
Neighborhood Networks is NOT a "grant" program.
"Neighborhood Networks (NN)" is an umbrella concept
under which a variety of public and private
organizations, neighborhood organizations, housing
developments, their owners, managers and residents, are
linked through computer hardware and software for job-related,
educational, and other community purposes.
Owners, managers, and residents of multifamily
properties work together to develop partnerships with
local businesses, educational institutions, private
foundations, and other community organizations to
create, operate, and sustain a Neighborhood Networks
Center. (See Appendix 7, Fact sheet.)
b.
Components of a Neighborhood Networks Center
o
On-line Service Coordinator. All centers need an
on-line service coordinator. This person is
responsible for tailoring opportunities at the
center to meet the needs of residents of all ages.
There is also a role for the voluntary sector as
part-time staff, tutors and trainers; for example
consider help from churches, synagogues, temples,
mosques, Rotary clubs, the Grange, Veterans of
Foreign Wars, Kiwanis clubs, Junior Chambers of
Commerce, Police Athletic Leagues, Boys and Girl's
Clubs, 4-H groups, Scouts, and many others.
o
Resident Development Plan. The on-line service
coordinator can help residents create a plan to
establish educational/career goals. The basic
components of a good resident development plan
include:
A Skills and Interest Assessment, focusing on
educational basics;
A Life Goals Planning Section that determines an
individuals strengths and ambitions. It includes
both educational and job-related short-term
objectives and career goals; and
A Lifestyle Management System that will help
residents manage life changes necessary to achieve
their goals.
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o
Neighborhood Networks Business Plan. All
assisted-housing communities must submit a
business plan to the asset management branch of
the local HUD field office in whose jurisdiction
the community is located. (See section 9.6,
"Required Components of a Neighborhood Networks
Business Plan.")
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c.
WHAT IS A NEIGHBORHOOD NETWORKS BUSINESS PLAN (NNBP)?
An NNBP combines a CLC (see Paragraph 9.2(d),
following), with distance learning and other tools in
an approach which addresses resident self-sufficiency
desires through meeting economic development and
educational needs (see Paragraphs 9.5 and 9.6).
An NNBP for any one project or grouping thereof should
address some, if not all, of the following:
o
resident involvement in all phases of planning and
implementation (required);
o
priority focus on resident jobs, job training and
job development (required);
o
special needs of elderly residents;
o
purchase/donations of hardware/software;
o
minor construction or taking units off-line for the
CLC;
o
appropriate staffing (an On-Line Service
Coordinator (OLSC) (see Paragraph 9.5(g)
following), consultants, trainers, and/or
volunteers to operate the center;
o
participation of non-residents, if appropriate;
o
off-site location(s), if appropriate;
o
development of "Resident Development Plans" (RDP)
to meet resident training needs and goals (see
Paragraph 9.2(e), below);
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o
linking the center to the world through distance or
on-site learning to the local public school system
technical institutes and community
colleges/universities, for activities such as
childhood education, adult literacy, computer
literacy, typing skills, GED and associate and
higher level degrees, job training, microenterprise
development and telecommuting;
o
linking the center to the world through networking
to local public services (e.g., welfare, health,
social security, and through the Internet, other
residential sites, neighborhood organizations and
the "world-wide-web."
Alternate Options. Please remember that it is not necessary
to spend hundreds of thousands of dollars to start up a
Neighborhood Networks Center. A center can be started for
under $10,000 per year. This can be accomplished by
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capitalizing on the following:
o
Using existing space without modification,
obtaining donated furniture, security equipment,
and the like.
o
using "shareware" - free programs available on the
Internet and the World Wide Web. A small fee may
be requested for regular use of programs.
o
Engaging staff or volunteers with high- or low-tech
know-how to create or clone one or two computers
from parts of older, donated ones.
o
Using staff or volunteer time to shop around at
local computer shows, seeking used and spare parts;
some computers can be purchased at 1/3 or less of
retail cost; and
o
Using staff or outside experts to train volunteers
to run the center.
A Neighborhood Networks Center set up and running with older
computers is far better than a grand design with 12 state-of-the
art computers, scanners, and other hardware for which
funding cannot be obtained. If a volunteer program with
recycled computers can be set up and started, it can be
ongoing and may prove the program's concept in that locality,
thus be able to generate funding from other sources after a
year or so.
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d.
9-4
WHAT IS A COMPUTERIZED LEARNING CENTER (CLC)?
A CLC is a facility and a process which, through
computerization, focuses on providing a variety of job
and educational opportunities to community residents.
The CLC facilitates:
o
increasing resident self-sufficiency;
o
expanding job opportunities within the project, and
perhaps the community - including microenterprise
development; and,
o
creating a lifelong learning community.
A CLC is appropriate for many of our 21,000 housing
assisted and insured developments. However, a CLC will
mean different things in different residential sites.
For example:
o
one family site may concentrate on job training
for young adults, telecommuting for those that
need jobs and provide Internet linkages and
activities for the elderly on the side;
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o
another family site may stress job training and
computer literacy for single parents/young adults;
and,
o
some may promote early childhood and teen-age
education, with job training/telecommuting as a
sideline-
o
a site for the seniors may focus on ending health
and social isolation; making better linkages to
their families, and microenterprises.
The CLC can provide:
o
a variety of early childhood education programs;
o
typing and word processing skills;
o
adult educational opportunities at the high
school, vocational, community college and
university levels;
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o
personal, motivational, and job-training software;
o
facilitation of telecommuting to jobs; and,
o
the development of microenterprises, such as data
entry, which can contract with HUD and/or other
Federal/state/local agencies or private
businesses.
Programs offered may be computer-based by disk or
distance learning (with or without the provision of a
traditional classroom approach), usually in a project's
accessible community space.
Additionally, a CLC may be:
o
shared among sites, e.g., two close-by ones
sharing one center or a number of sites in the
same area with a "main" center and several
satellites;
o
off-site in a near-by building or facility, if the
majority of support for the NNBP is from other-than-HUD
resources;
NOTE:
off-site can mean the CLC can be in a
store-front, religious institution's
space, or non-HUD sites. The prime
criteria here is (a) service to HUD
housing residents; (b) strong tie-in to
neighborhood needs, in addition to HUD
residents; and (c) one or more sites may
locate the center in a partnered
church/synagogue/temple or a community
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development agency, all of which should
be 501(c)(3) non-profit agencies and
organizations. (See appendix 9 for
sample 501(c)(3) Bylaws, particularly
for tenant organizations that have CLC
responsibility.)
o
offered to near-by community residents (only if
on-site residents have priority, much of the
resources come from sources other than HUD, and
there is time/space available after residents are
first served).
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For further information, please see "A How to Manual Your On-Line Guide", available for a fee from the
Multifamily Clearinghouse at 1-800-685-8470.
There is additional material on the HUD Home Page at
"http://www.HUD.gov/nnw/nnwindex.html"
E:mail internet questions may also be addressed to
"mail@neighborhoodnetworks.org".
e.
PHILOSOPHY OF NEIGHBORHOOD NETWORKS:
Neighborhood Networks can improve the lives of project
residents by providing such residents with onsite
access to computer and training resources. It may
enhance the self-sufficiency, employability and
economic self-reliance of low income families and the
elderly living in HUD insured and assisted communities.
1.
Providing resources which could lead residents to
jobs.
CLCs help residents of assisted and insured
housing by:
o
improving education levels through close
assessment of reading, language, math and
other courses; and,
o
providing job-related skills, access to
and/or jobs, directly or indirectly.
o
Telecommuting for parents of young children,
or those who are physically unable to travel.
Be aware that the project cannot make
telecommunting happen. It has to be inherent
in the job the resident has, e.g., data entry
or microenterprise.
o
micro-enterprise development.
Microenterprises, developed through business
incubators, startup programs, and other
partnerships, could involve teenagers, young
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and other partnerships, could involve
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teenagers, young adults, and senior citizens.
Such micro-enterprises may take numerous
forms and find business opportunities in both
public and private sectors.
o
2.
Day care. Residents can expand an on-going
center or join forces with a nearby center.
Formal babysitting might be structured, or
perhaps a preschool component designed as a
learning/play tool for young children while
their parents are in class. Residents may
also set up a cooperative Day care center
with fees to cover materials and supplies.
(Before undertaking such an effort, local
regulations covering day care centers must be
met.)
Providing educational and job training programs
designed to enrich residents lives:
The CLC provides residents access to the education
and skills necessary for the 21st century.
o
Multimedia:
Multimedia software has a documented
beneficial influence in improving the
learning experience of both children and
adults in activities such as: Preparing for
the GED, improving math skills, computer
literacy, or providing employment readiness
training.
o
Job training:
There is a need for all types of job
training. For success, business,
educational, and voluntary association
partnerships are critical. (NOTE: Residents
may get relief from immediate rent increases
through Handbook 4350.3 CHG-28, paragraph
3.29.A "Exclusion of Income Received Under
Training Programs in Multifamily Housing
Programs."
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o
Life skills development. There may be interactive
group training in life-coping skills classes and
competency-based training. Such topics include:
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-
Employment - job applications, employment
contracts and forms, resumes, job motivation,
job search, how to inter-view, what employers
want;
-
Banking and Budgeting - requirements, use and
maintenance of checking accounts, spending
decisions, purchasing and the payment of
bills, personal budgeting;
-
Credit and Loans - credit and credit cards,
security, payback, types of loans, interest.
As part of the overall program, HUD has joined the Citizen
Education Fund effort to fight drugs and violence in the
schools (see sample form, Appendix 9). One of the goals of
the center's NNBP should be to reach as many residents as
possible. Consider making an outline of approaches to
engaging parents and children in focusing on education and
supporting drug-free, violence-free schools. One way to
achieve support might be to obtain pledges from both parents
and children and provide incentives in the form of free
software or additional computer access when the entire housing
community has agreed to join the effort.
3.
Enhancing interaction among residents and providing
access to the larger world:
o
Internet:
Through the Internet and electronic mail, residents
can reach out to their neighborhood, libraries,
social service providers and the world. Through
working partnerships with other properties,
residents could interact on issues such as
parenting and organizing.
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on-line discussions become possible for any topic
of general interest. With on-line access to
distance learning, job hunting, telecommuting, and
libraries, jobs can become a realistic component in
resident's lives, and students can easily find
appropriate research material for homework.
(Monthly access fees for one or more Internet
accounts are specifically approvable as an
allowable CLC expense.)
o
Mentoring:
On-line mentoring programs could also be
established for the elderly/adults/youth by
voluntary organizations, which could provide
younger people exposure to writing skills while
building a friendship with an older member of the
community.
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o
Distance/On-site Learning:
Based on the resident development plans, the online
service coordinator can work with local
corporations, the public schools, vocational
training schools and colleges and universities to
ensure that appropriate courses are available,
either through diskettes, teachers, aides, or
distance learning.
4.
Senior Citizens:
Seniors are the fastest growing group of Internet users.
Ideas for elderly residents could focus on ending
isolation (contact with families, grandchildren, friends
in other projects for the elderly), use of libraries,
social service agency online registration, program
information and access thereto, mentoring, partnerships
with families-in-training, Senior Net and other web sites
attuned to elderly needs and interests. Also consider
microenterprises, both start-ups and marketing thereof.
The above examples represent a fraction of the
possibilities for Neighborhood Networks. Field offices,
owners, management agents, and residents are encouraged
to community the resources community to create a variety
of solutions to improve the quality of life in
multifamily housing.
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NOTE:
Ending Welfare Dependency:
Recognizing the changing role of local, State
and Federal welfare programs is a critical
aspect when designing NNCLCS. Owners and
managers must become familiar with the
Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (Public Law 104-193),
and the devolving of power to the
states for welfare and a variety of related
programs. Close linkages need to be
developed with local welfare offices to
determine what types of education, training,
and jobs will qualify for allowances and
incentives and new "workplace" requirements.
Neighborhood Networks Centers should also
look into how both welfare and housing
benefits might be adversely affected, and
what waivers or exceptions to rules might be
beneficial and obtainable. Field offices,
owners, management agents, and residents are
encouraged to use the resources of the
community to create a variety of solutions to
improve quality of life in multifamily
housing.
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9.3
HOUSING COMMUNITY ELIGIBILITY: All insured and assisted
communities, under any section of the Housing Acts
administered by the Office of Housing are eligible to submit
a NNBP for approval, and when approved, set up and operate a
CLC. Such housing communities include, but are not limited
to HFA and state-financed, Section 8 project-based, 221(d),
236, 202, 202/8 and 811. On HUD-held projects with housing
finance agencies, HUD staff may negotiate for HFA dollars to
pay NNBP costs.
NOTE:
MOD REHAB, public housing and CPD special needs
housing are not covered by this Handbook Chapter,
except to the extent their owner and managers are
encouraged to work with our sites in cooperation
with the Office of Housing, and so do.
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9.4
FUNDING OF THE NNBP: Owners/agents of HUD-assisted or
insured properties may utilize any of the following methods
(or combinations thereof) for NNBP funding. The use of non-HUD
resources, e.g., equipment, software and staffing should
be encouraged through outreach efforts. HUD's intention is
to be the last, most flexible piece of the funding and
should be thought of as "venture capital," not a guaranteed
long-term source of funds. The business plan must make
sustainability over time a priority. In reviewing plans,
HUD staff will consider the viability of a center to operate
on its own with a substantial decrease of HUD funding within
three to five years.
The following funding methods are in preferred order of
consideration:
a.
OBTAINING GRANTS/RESOURCES FROM OUTSIDE SOURCES:
Owners, management agents, and resident organizations
(where they exist), are encouraged to seek out cash
grants, in-kind support, or donations from state and
local government, educational district partnerships,
private foundations, or corporations to fund some or
all components of the NNBP. Resident organizations may
want to see model by-laws for incorporation (see
Appendix 9).
Entrepreneurial ventures, limited fees, and other
similar revenue producing sources should also be
considered. Please note that a number of major vendors
may partner HUD in this effort and housing communities
may be able to obtain resources from National Partners
at discounted costs.
b.
USING THE PROJECT FUNDS/RESIDUAL RECEIPTS ACCOUNT:
Owners may request the release of funds from the
residual receipts account for the purpose of
implementing some or all of a HUD-approved NNBP.
Working in partnership with owners, HUD will review the
request, considering condition of the buildings) and
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current or projected needs for the funds. If the
residual receipts requested are not required to
maintain the habitability of units or other projected
building needs, approval for NNBP use will be granted.
Release of residual receipts is an increase in owner's
initial equity, wherever allowed (See
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Paragraph 9.4(C) below), for which distributions may be
paid to the owner at the approved rate.
c.
INCREASING THE AMOUNT OF THE OWNER'S INITIAL EQUITY
INVESTMENT IN THE PROPERTY: Owners of limited
distribution property may increase the amount of their
initial equity investment (and in turn the yield on
their distribution) by providing funding for the HUD-approved
NNBP in the form of a non-repayable, capital
advance. Owners who choose to utilize such methods of
funding should inform HUD of the amount which they wish
to contribute to the NNBP. The increased equity
payments will result once the total amount of funding
has been contributed, the CLC is fully established and
the NN Plan is implemented. While the owner is
permitted to take an increased distribution, a rent
increase will not be granted to increase project income
for the additional yield.
NOTE:
Any change in the owners original
distribution percentage will be made by
Notice in the Federal Register per 24 CFR
Section 881.205.
d.
BORROWING FUNDS: Owners may choose to obtain a loan
from a lending institution in order to pay for the
hardware and setup costs of the NNBP. Repayment of
this loan may come from surplus cash or other outside
sources with HUD approval, so long as a rent increase
is not required to support the loan and the loan will
not jeopardize other services which the property has
agreed to provide. Loans obtained for this purpose may
not be secured by the property.
e.
BORROWING FROM THE RESERVE FOR REPLACEMENT ACCOUNT
(R&R):
1.
Projects other than 202/811 PRAC: Owners of HUD-insured
or assisted properties who are required to
maintain a Reserve for Replacement Account (R&R),
per Handbook 4350.1 REV-1, Chapter 4, "Reserve
Fund for Replacements", may request and HUD will
consider approval of funds to be borrowed against
this account for the purpose of implementing some
or all of the HUD-approved NNBP. The owner may
borrow from the account consistent with Handbook
4350.1, Chapter 4-11. HUD recommends that owners
retain about $1000 per unit, for required repairs
and replacements.
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The amounts in the
repair/replacement
inspection reports
be able to project
at specific points
R&R account should anticipate
needs using personal knowledge,
and evaluations. Owners should
how much money will be needed
in the future.
If an owner chooses to utilize this method of
financing for the NNBP, he/she should submit a
scheduled repayment plan illustrating how
repayment will be made, and showing that such
repayments will not interfere with projected
facility needs. (For example, the facility borrows
70 percent of the R&R fund and schedules an eight-year
payback. There is a need for boiler
replacement in four years and there should be
sufficient funds available for boiler replacement
at that time.)
2.
f.
202/811 PRAC Projects: Owners of Section 202/811
PRAC projects may request, and HUD will consider
approval of, release of funds from the R&R account
for the purpose of paying for some or all of a
HUD-approved NNBP, if these funds are generated
from the "Savings Incentive" (see, for 202/PRAC
projects, Handbook 4571.3 REV-1, Chapter 1,
"General Introduction to the Section 202 Program",
and for 811/PRAC projects, Handbook 4571.2,
Chapter 1, "General Introduction to the Section
811 Program." Before approval, HUD will consider
current or projected needs for the funds.
REQUESTING AN INCREASE UNDER THE BUDGETED RENT INCREASE
PROCESS: In properties where rents are set under
Handbook 4350.1 REV-1, Chapter 7, "Processing Budgeted
Rent Increases ... ", owners may request a rent
increase to cover some or all of the costs of the HUDapproved NNBP. Rent increases are subject to HUD's
discretion and availability of Section 8 funds in a
changing regulatory environment.
Residents at partially assisted properties can review
and comment on the plan as outlined in Handbook 4350.1
REV-1, Chapter 7 and Handbook 4381.5 REV-2, Chapter 4.
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g.
REQUESTING A SPECIAL RENT ADJUSTMENT: Section
8(c)(2)(B) of the U.S. Housing Act of 1937 authorizes
HUD to offer these special rent adjustments in the
maximum monthly rent for units under a Section 8
contract in a limited number of circumstances. it
provides the following:
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"The contract shall further provide for the
Secretary to make additional adjustments in the
maximum monthly rent for units under contract to
the extent he determines such adjustments are
necessary to reflect increases in the actual and
necessary expenses of owning and maintaining the
units which have resulted from substantial general
increases in real property taxes, utility rates,
or similar costs which are not adequately
compensated for by the adjustment in the maximum
rent ... " (emphasis added)
Pursuant to this provision and in order to determine
whether CLC costs qualify for consideration for a
special rent adjustment under the "similar costs"
provision of the statute, the costs have to meet the
following standards.
1.
Are the cost items "similar" to those identified
in the statute and regulations, i.e., necessary
expanses of owning and maintaining the units
within the facility.
2.
Has there been a "substantial and general
increase,, in the cost at issue? In the case of
components of CLCs and comprehensive community
development, is there a casual relationship
between lack of economic and educational
development training among residents in the
project and the increased costs?
3.
Has the increase been "general", i.e., has this
increase been experienced by owners of other than
the immediate project and projects other than
Section 8 assisted?
Owners whose costs meet these three standards satisfy
the legal requirements for consideration for special
rent adjustments (see Handbook 4350.1 REV-1, Chapter
34, "Calculating Rents Utilizing Annual Adjustment
Factors"). The rent increase is subject to HUD's
discretion and availability of Section 8 funds in a
changing regulatory environment.
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ELIGIBLE COSTS OF A NNBP: In instances where hardware and
installation exceed $15,000 per center, owners must state
how they plan to conduct outreach for contractor services
and solicit minority-owned and women-owned businesses.
There is a possibility that excess government computers can
be donated from HUD, GSA, or other government agencies (see
Appendix 10, "Transfer of Excess Computers"). Also, ask the
local Neighborhood Networks Coordinator if the Field Officer
has a supply of excess computers for donation to
Neighborhood Networks 501(c)(3) organizations or to
educational institutions.
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a.
COMPUTER HARDWARE: This includes all costs necessary
to set up a Neighborhood Networks Center at the
property.
Examples include but are not limited to:
o
individual computers;
o
appropriate wiring necessary to connect all
equipment;
o
a network server;
o
special phone line(s), including fiber-optic
cable, where appropriate; and
o
training and consultants.
Program designers must ensure that computers have
sufficient power, adequate multimedia equipment, and
sufficient expansion slots for intended purposes. They
also must address equipment compatibility with that
used by local school systems and insure that staff are
effectively trained in the uses of all equipment.
b.
COMPUTER SOFTWARE: Fees associated with personal Internet
accounts may NOT be paid for with project income or other
HUD funds.
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Eligible costs include:
c.
-
multimedia educational software for students;
-
software designed to provide educational and job
training skills to residents;
-
software necessary to provide residents with
resources to telecommute from the property (e.g.
word processing, spreadsheet and database programs,
or integrated programs);
-
software designed to assist residents in creating
education/job training plans and working toward
implementation;
-
appropriate training and consultants; and,
-
at least one community Internet account for common
use which permits residents access to the World
Wide Web, Gopher, FTP and TELNET.
DISTANCE LEARNING EQUIPMENT: Costs for videocasting
and distance learning equipment may be part of the
program, IF FUNDING PERMITS. The equipment is very
expensive. Owners/agents/residents and HUD field
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offices (providing assistance, guidance and
recommendations, as appropriate), should explore the
feasibility of obtaining distance learning equipment in
partnership with educational institutions and other
CLCS.
Planned use of this equipment must be explained and
documented. It should focus on a partnership with a
local school district, community college, voc/technical
institute or four-year college to provide a certificate
program using the equipment.
d.
RESIDENT DEVELOPMENT AND TRAINING COURSES: In some
cases owners/managers may choose to use some programs
in the CLC which are not based in software, but come
"live" from community organizations and institutions.
Standards and certificates should be designed for any
internally-developed courses; use of outside
courses/training should include the same standards and
certificates as at the regular location.
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e.
SECURITY AND RELATED COSTS:
1.
Security: In planning security, thought should be
given to developing an effective, discrete,
system. HUD will not approve security plans
involving "caging" or chaining equipment.
Costs necessary to secure computer hardware and
distance learning equipment MUST be built into the
plan. In general, this includes the ability to
lock the lab/offices, prevent forced entry or
equipment removal, and provide visual oversight
from the adjacent rooms or offices, whenever
possible.
2.
Space Use/Retrofit/Redesign: Costs necessary for
minor retrofit/redesign are allowable. Examples
are:
(i)
installing non-load bearing walls and doors;
(ii) partition existing community space, provide
for both office and a storage area for the
OLSC; and, provide for a locked
office/storage area.
(iii)
Proposers may also consider Removal of
1-3 units from residency (by moving
people into vacant units), or using
vacant units for office space, day care
or perhaps the CLC itself.
(iv) Making space accessible to the disabled.
f.
MAINTENANCE AND INSURANCE COSTS:
The NNBP should state
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how maintenance, (including installing, training on,
and maintaining the hardware and software) and
insurance costs for the equipment in the CLC will be
covered.
g.
ON-LINE SERVICE COORDINATOR/SOCIAL SERVICES SERVICE
COORDINATION: All NN Plans submitted for approval
should provide for the funding of an OLSC directly or
through third parties and allow for at least a portion
of the time of the Social Services Service Coordinator
(SSSC) (or management staff) to work with the OLSC on
community outreach. If a SSSC is not already present
at the property, management may consider hiring one, if
appropriate, per Chapter 8, of this Handbook.
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The OLSC's major responsibility is the implementation
of the NNBP, and working with the SSSC, as appropriate.
Qualifications for the OLSC are based on Paragraph
8.9(C) of this Handbook; when computer literacy
sufficient to run the CLC is added, an SSSC can become
an OLSC. Also consider residents, computer-trained and
people-focused teenagers, Americorps, VISTA, college
student internships, grants or other methods of
providing the OLSC without using HUD dollars; or an
OLSC aide, paid at least minimum wage.
Responsibilities of the OLSC are in the context of
Chapter 8.9(C), but restricted to operation of the
NNBP.
A SSSC (or other management staff which provide this
function) is a useful adjunct to the NNBP for bringing
in additional supportive services and other activities
for the residents. The intent is to improve the
residential neighborhood and link the residents more
effectively to the entire community.
The NNBP must outline how the OLSC will integrate the
RDP and technology into the CLC. It should also
address the degree to which the SSSC (or other
management staff) play a role both through coordinating
general outside services for residents, and work with
the OLSC to bring specific community resources into the
facility for the NNB Plan.
h.
WHAT DOES "REASONABLY FINANCED" MEAN?
A reasonably financed NNBP meets the following criteria
for approval of the local HUD office:
o
Has rent levels which do not exceed current HUD
policy.
o
202/8/811's residual receipts accounts are
maintained at $500/unit or more. This is a
statutory threshold.
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o
The Reserve for Replacement Account for
non202/811s remains consistent with Handbook
4350.1 REV-1, chapter 4.
Any loan should be within the remaining term of
the Section 8 contract and consider future
replacement needs. There should not be a loan
which would exceed foreseeable available sources
of funding (e.g., Section 8 contracts expiring
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before the loan is repaid or require repayments
not supportable by rents available from a
recapitalized loan (e.g., under Portfolio Re-engineering).
o
Keeps the loan to value (LTV) ratio on the
original mortgage to be no more than 90 percent.
(The owner's initial equity on original limited
distribution loans was normally 3-5 percent. This
plan would permit that to be increased to, but not
exceed 10 percent.)
The LTV ratio ONLY applies to Limited Dividend
projects
NOTE:
Increase in equity only=no Federal
Register comment period;
Increase in distribution=Federal Register and
comment period as required by statute (See
paragraph 9.4 (c), prior).
o
Provides an adequate plan for continued operation
after the start-up year, and self-sustainability
after the second year.
o
provides for an adequate measure of third party
resources to supplement the HUD resources, as
proposed and appropriate.
NOTE:
9.6
REQUIRED COMPONENTS OF AN NNBP: All projects wishing
approval of a CLC/NNBP must submit a proposal to the Asset
Management Branch of the HUD local field office in whose
jurisdiction the project is located. In addition to
answering specific questions in the NNBP, there are REQUIRED
components of the proposal, for example the NNCLC must be
designed to address resident self-sufficiency through
meeting economic development and educational needs.
a.
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A plan which does not meet all of the above
criteria should not be approved by the local
HUD office.
What specific measurable objectives will the project be
designed to achieve for participating residents?
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b.
What are the action steps necessary to implement these
objectives for participating residents?
c.
How will participating residents benefit from the
program (i.e., type of programs)? How will they be
involved in planning? Is the Citizen Education Fund
pledge addressed?
d.
What partnerships have been built which can enhance the
CLC (e.g. schools, local government, local businesses
or social services which can offer programs at the CLC,
or donated computer or other equipment, software or
services/staff)?
e.
Who will direct the program, what staff will be
responsible for the equipment and what will the staff
do? What will be the CLC's operating schedule?
f.
What is the proposed space/security plan/monitoring
arrangements? Does the retrofitting design (if
appropriate) meet accessibility requirements?
g.
What is the first year's budget, and how will the NNBP
be funded initially? How will personal accounts for
internet and other third party charges (if part of the
proposal) be monitored and collected?
h.
What outreach will there be to minority/women-owned
firms if hardware costs are over $15,000?
i.
What are the various funding mechanisms? Attach a
breakdown of the estimated costs, and commitment
letters from any third party grantors or loan providers
for the first year.
o
Section 202 projects may use residual receipts to
the extent that they are over $500/unit. This is
a statutory threshold.
Other elderly or family sites may use all
available residual receipts. All facilities are
subject to Handbook 4350.1 REV-1, Chapter 25,
"Residual Receipts." Owners/borrowers must submit
a copy of the last Annual Financial Audit (AFA)
and verification that any residual receipts exist
and/or have been deposited since the last AFA was
completed. (Only do so if residual receipts will
be used in the program.)
9-21
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CHG-2
o
Owner/borrowers using the AAF rent increase
process must first establish that revenues from
the site are not adequate to pay for the NNBP.
This may be demonstrated as follows:
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(1)
The owner/borrower must determine if there is
sufficient cash throw off to fund some or all
of this proposal. To do so, complete Form
HUD-9833B, Section 8 Annual Contract Rent
Adjustment Worksheet, Part G, 1-14, "Special
Adjustments for Taxes, Insurance or Utility
Cost Increases" (see Appendix 2 of Handbook
4350.1 REV-1 and the instructions in Chapter
34).
Owners are instructed to add an entry for
"Other" (to cover "similar cost" language in
the statute and regulations), in the blank
space on the right side of the form next to
the entries for "Taxes", "insurance," and
"utilities,", and specify for which component
of the proposal is the special adjustment.
(2)
If the net cash throw-off is less than the
distribution allowance, the owner may request
a special rent adjustment to fund a portion
of the proposal. However, if net cash throw-off
exceeds the distribution allowance as
calculated for the purpose of the special
adjustment, the owner may use the funds in
excess of the allowable distribution to
partially or fully capitalize the proposal.
In cases where all the cash throw-off is
taken as distribution or surplus cash, the FO
must determine what is an appropriate amount
to be contributed to the program.
(3)
The owner/borrower must submit a copy of the
Form HUD-9833B.
o
Budget-Based Rent Increase - Use Handbook 4350.1,
REV-1, Chapter 7 and any current Notices.
o
Reserve for Replacement Account - Use Handbook
4350.1 REV-1, Chapter 4.
6/97
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CHG-2
For 202/PPAC use Handbook 4571.3 REV-1, Chapter 1
and Handbook 4571.5, Chapter 5. For 811/PRAC
housing, Handbook 4571.2, Chapter 1 and Handbook
4571.4, Chapter 5.
o
j.
Increase of Initial Equity Balance, where
appropriate.
How will operations be continued after the start-up
year? What will the annual operating budget be? How
will the housing community become self-sustaining after
the second year?
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k.
9.7
How will participation in the program's operation, such
as education and job training programs be tracked? How
will the success of the program be assessed or
evaluated? Is there agreement to cooperate with any
HUD reporting requirements, including the HUD
evaluation which begins in FY 1997?
LOCAL HUD OFFICE REVIEW: Local HUD office staff (Resident
Initiatives Specialists (RIS) and Asset Managers (AM) are
encouraged to work with applicants in the preparation of
their NN Plans and BE CREATIVE in problem solving. This
Chapter does not pretend to provide all the answers nor
should it be used as an exclusive guideline or cookbook.
The Department would like to develop as many workable
programs as possible, in both single and multi-site
approaches, some of which may eventually be national models-ONLY RESULTS COUNT.
Plan review will be done by AMs, together with the RIS', as
appropriate. (A&E staff should be approached for assistance
if minor retrofitting is proposed.)
Staff should review the proposed NNBP submitted. NNBPs with
deficiencies must be revised. Headquarters encourages HUD
field office staff to work with interested applicants on an
ongoing partnership basis, to minimize any final review.
The criteria are:
o
The degree to which a complete, overall plan is
provided, assuring that each component is sufficiently
developed, effectively answers all questions, and links
the appropriate objectives, action steps and results.
(RIS, AM, A&E).
9-23
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4381.5 REV-2
CHG-2
NOTE:
o
NOTE:
HUD does not want only $200,000 after-school
childhood development centers, but concepts that
address at least: Jobs and various forms of
training and life skills learning (in some
capacity as they relate to obtaining or upgrading
employment particularly in consideration of
Welfare Reform).
The degree to which the facility/NNCLC has formed
partnerships with neighborhood and community entities
that support the plan as proposed (RIS).
Any plan that does not evidence strong and
continuing linkages and resources from third party
Local organizations, such as the school system,
Universities, colleges, community colleges,
businesses, non-profit corporations, local for-profit
companies, and national/ international
companies is unlikely to sustain operations much
past the first year and should not be approved.
For this reason, the role of consultants should be
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carefully reviewed to determine that their assistance
contributes to the development of community linkages
and is not solely restricted to the development of
theoretical plans or "turnkey" solutions relying
primarily on HUD as the funding source.
o
The degree to which the facility/CLC is provided with
adequate space, staffing, volunteer or other coverage,
appropriate security and accessibility for the disabled
(AM, RIS, possibly A&E).
o
The degree to which the program is adequately funded
through third parties and/or the project, and resident
fees (AM, RIS).
This will include, as appropriate:
-
consideration of whether the facility is large
enough to support the program efficiently and
effectively as proposed, and has enough funds to
make it work.
-
some evidence that project owners/
management/residents have looked for other sources
of funding before using HUD dollars other than
residual receipts; and
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9-24
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CHG-2
-
residual receipts review, and/or, reserve and
replacement review for other than 202/811 PRAC
projects, to make sure that the dollars are
available. These must include consideration of
the condition of the facility (not 202/811 PRAC)
and match remaining dollars in the accounts
against planned needs for the facility.
For Section 202 PRAC projects, see Handbook
4571.5, Chapter 5, "Cost Certification," and for
Section 811 projects, see Handbook 4571.4, Chapter
5, "Cost Certification."
-
A review for available contract authority (on both
budget-based and AAF projects). The AM/Contract
Administrator must review the project's contract
authority to determine if it is adequate to meet
the projected demands for housing assistance for
the remaining incremental terms of the contract,
because it would be paid out of the contract's
contract and budget authority. If contract
authority is inadequate, a request for amendment
funds would need to go to Headquarters.
Review the HUD-9833B, Section 8 Annual Contract
Rent Adjustment Worksheet, Part G, "Special
Adjustments," and Chapter 34 of Handbook 4350.1.
In particular, Paragraphs 34-6 through 34-8
provide general processing instructions, including
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a walk-through of how to compute the actual dollar
amount of the special adjustment to approve
applicable "back-out" procedures.
The expiration of a special adjustment does not
constitute a "reduction in rent." The owner, by
accepting the special adjustment, agrees to this
reduction when the need for the rent increase can
no longer be justified.
-
A review to insure that any rent increase approved
does not exceed current approvable levels.
-
When an owner equity contribution is involved, try
to ensure the commitment is firm (AM).
9-25
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4381.5 REV-2
CHG-2
-
o
o
9.8
copies of other commitments, such as grants, etc.
Make sure they are for the purpose stated in the
proposal, and are either firm, or committed
contingent on plan approval (AM, RIS).
The degree to which proposals involve multiple
site/non-resident involvement.
-
If it is a multiple site proposal, have costs been
effectively prorated and have the sites been
effectively distributed among the projects?
-
If people living in the community may use the
NNCLC, do residents have priority? Are the
majority of costs paid for by third-party
resources? Is space/time available for
nonresidents after resident needs are covered?
-
If the NNCLC is located off-site, are the majority
of resources assigned to the program covered by
third parties other than HUD? Are there
appropriate safeguards in place to cover HUD's
portion of the investment?
The degree to which there appear to be valid ideas for
continued operations for year two and plans for selfsustainability after year two. These should:
-
address all components of the plan;
-
provide some indication how costs can be covered
for year two; and,
-
address self-sustainability after year two.
MONITORING/REPORTING/TECHNICAL ASSISTANCE:
Monitoring is conducted in accordance with the requirements
and procedures set forth in Handbook 4350.1, Chapter 6,
"Project Monitoring", and Handbook 4350.5, Chapter 15,
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"Project Monitoring", and Chapter 16, "Field Office
Monitoring Responsibilities of Subsidy Contract
Administrators".
When doing an on-site review, Asset Managers/RIS' should
include a review of the implementation of the facility's
program, compared to the approved proposal, review of
appropriate files and documents. The financial review
should include documentation the project maintains for costs
incurred.
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CHG-2
Findings should be written up in narrative format as an
ADDENDUM to the HUD-9834-B "Management Review Questionnaire"
and summarized on the "Management Review Report", under
Section V, General Management Practices, which is sent to
the project manager.
From time to time HUD Headquarters may impose specific
additional monitoring/reporting requirements (e.g.,
supporting a HUD evaluation of the NN program), or other
studies.
9-27
6/97
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DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Previous Participation
Certification
U.S. Department of Housing
and Urban Development
Office of Housing/Federal Housing Commissioner
Part I To be completed by Principals of Multifamily Projects. See Instructions
U.S. Department of Agriculture
Farmers Home Administration
OMB Approval No. 2502-0118
(exp. 9/30/2009)
For HUD HQ/FmHA use only
Reason for Submitting Certification
1. Agency Name and City where the application is filed
3. Loan or Contract Amount
2. Project Name, Project Number, City and Zip Code contained in the application
4. Number of Units or Beds
5. Section of Act
6. Type of Project (check one)
Existing
Rehabilitation
Proposed (New)
LIst of All Proposed Principal Participants
7. Names and Addresses of All Known Principals and Affiliates (people, businesses & organizations)
proposing to participate in the project described above. (list names alphabetically; last, first, middle initial)
Certifications: I (meaning the individual who
signs as well as the corporations, partnerships or
other parties listed above who certify) hereby
apply to HUD or USDA-FmHA, as the case may
be, for approval to participate as a principal in the
role and project listed above based upon my
following previous participation record and this
Certification.
I certify that all the statements made by me are
true, complete and correct to the best of my
knowledge and belief and are made in good faith,
including the data contained in Schedule A and
Exhibits signed by me and attached to this form.
Warning: HUD will prosecute false claims and
statements. Conviction may result in criminal and/
or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31
U.S.C. 3729, 3802)
I further certify that:
1. Schedule A contains a listing of every assisted
or insured project of HUD, USDA-FmHA and
State and local government housing finance
agencies in which I have been or am now a
principal.
2. For the period beginning 10 years prior to the
date of this certification, and except as shown
by me on the certification.
a. No mortgage on a project listed by me has
ever been in default, assigned to the Government or foreclosed, nor has mortgage relief
by the mortgagee been given;
b. I have not experienced defaults or
noncompliances under any Conventional
Contract or Turnkey Contract of Sale in connection with a public housing project;
c. To the best of my knowledge, there are no
unresolved findings raised as a result of HUD
audits, management reviews or other Governmental investigations concerning me or
my projects;
d. There has not been a suspension or termination of payments under any HUD assistance
contract in which I have had a legal or beneficial interest;
e. I have not been convicted of a felony and am
not presently, to my knowledge, the subject
of a complaint or indictment charging a felony.
Typed or Printed Name of Principal
8. Role of Each
Principal in Project
(A felony is defined as any offense punishable by imprisonment for a term exceeding
one year, but does not include any offense
classified as a misdemeanor under the laws
of a State and punishable by imprisonment of
two years or less);
f. I have not been suspended, debarred or
otherwise restricted by any Department or
Agency of the Federal Government or of a
State Government from doing business with
such Department or Agency.
g. I have not defaulted on an obligation covered
by a surety or performance bond and have
not been the subject of a claim under an
employee fidelity bond.
3. All the names of the parties, known to me to be
principals in this project(s) in which I propose to
participate, are listed above.
4. I am not a HUD/FmHA employee or a member
of a HUD/FmHA employee's immediate household as defined in Standards of Ethical Conduct
for Employees of the Executive Branch in 5
C.F.R. Part 2635 (57 FR 35006) and HUD's
Standard of Conduct in 24 C.F.R. Part O and
Signature of Principal
This form was prepared by (Please print name)
Previous editions are obsolete
9. Expected % Owner
ship Interest in Project
10. Social Security or IRS
Employer Number
USDA's Standard of Conduct in 7 C.F.R. Part O
Subpart B.
5. I am not a principal participant in an assisted or
insured project as of this date on which construction has stopped for a period in excess of
20 days or which has been substantially completed for more than 90 days and documents for
closing, including final cost certification have
not been filed with HUD or FmHA.
6. To my knowledge I have not been found by HUD
or FmHA to be in noncompliance with any
applicable civil rights laws.
7. I am not a Member of Congress or a Resident
Commissioner nor otherwise prohibited or limited by law from contracting with the Government of the United States of America.
8. Statements above (if any) to which I cannot certify have been deleted by striking through the words
with a pen. I have initialed each deletion (if any)
and have attached a true and accurate signed
statement (if applicable) to explain the facts and
circumstances which I think helps to qualify me as
a responsible principal for participation in this project.
Certification Date (mm/dd/yyyy)
Area Code and Telephone No.
Area Code and Telephone No.
Page 1 of 2
ref Handbook 4065.1 form HUD-2530 (5/2001)
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Schedule A: List of Previous Projects and Section 8 Contracts. By my name below is the complete list of my previous projects and my participation history as a principal; in Multifamily
Housing programs of HUD/FmHA, State, and Local Housing Finance Agencies. Note: Read and follow the instruction sheet carefully. Abbreviate where possible. Make full disclosure.
Add extra sheets if you need more space. Double check for accuracy. If you have no previous projects write, by your name, "No previous participation, First Experience."
1. List each Principal's Name
(list in alphabetical order,
last name first)
2. List Previous Projects
(give the I.D. number, project name, city location,
& government agency involved
if other than HUD)
3. List Principals' Role(s)
(indicate dates participated, and
if fee or identity of interest participant)
4. Status of Loan
(current, defaulted,
assigned, or
foreclosed)
5. Was Project ever in Default,
during your participation?
.
Yes No
If "Yes," explain
6. Last Mgmt.
and/or
Physical Inspctn
Rating
Part II – For HUD Internal Processing Only
Received and checked by me for accuracy and completeness; recommend approval or transferral to Headquarters as checked below:
Date (mm/dd/yyyy)
Telephone Number and Area Code
A. No adverse information; form HUD-2530
approval is recommended.
C. Disclosure or Certification problem
Staff
Processing and Control
B. Name match in system
D. Other, our memorandum is attached.
Supervisor
Director of Housing / Director, Multifamily Division
Approved
Yes
Previous editions are obsolete
Page 2 of 2
Date (mm/dd/yyyy)
No
ref Handbook 4065.1 form HUD-2530 (5/2001)
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Instructions for Completing the Previous
Participation Certificate, form HUD-2530
Carefully read these instructions and the applicable regulations. A copy of those regulations published at 24 C.F.R. 200.210 to 200.245
can be obtained from the Multifamily Housing
Representative at any HUD Office. Type or
print neatly in ink when filling out this form.
Mark answers in all blocks of the form. If the
form is not filled completely, it will delay approval of your application.
Attach extra sheets as you need them. Be
sure to indicate "Continued on Attachments"
wherever appropriate. Sign each additional
page that you attach if it refers to you or your
record. If you have many projects to list (20 or
more) and expect to be applying frequently for
participation in HUD projects, you should consider filing a Master List. See Master List
instructions below under "Instructions for Completing Schedule A."
Carefully read the certification before you
sign it. Any questions regarding the form or
how to complete it can be answered by your
HUD Office Multifamily Housing Representative.
Purpose: This form provides HUD with a
certified report of all previous participation in
HUD multifamily housing projects by those
parties making application. The information
requested in this form is used by HUD to
determine if you meet the standards established to ensure that all principal participants
in HUD projects will honor their legal, financial
and contractual obligations and are acceptable risks from the underwriting standpoint of
an insurer, lender or governmental agency.
HUD requires that you certify your record of
previous participation in HUD/USDA-FmHA,
State and Local Housing Finance Agency
projects by completing and signing this form,
before your project application or participation
can be approved.
HUD approval of your certification is a
necessary precondition for your participation
in the project and in the capacity that you
propose. If you do not file this certification, do
not furnish the information requested accurately, or do not meet established standards,
HUD will not approve your certification.
Note that approval of your certification does
not obligate HUD to approve your project application, and it does not satisfy all other HUD
program requirements relative to your qualifications.
Previous editions are obsolete
Who Must Sign and File Form HUD-2530:
Form HUD-2530 must be completed and signed
by all parties applying to become principal
participants in HUD multifamily housing
projects, including those who have no previous participation. The form must be signed
and filed by all principals and their affiliates
who propose participating in the HUD project.
Use a separate form for each role in the
project unless there is an identity of interest.
Principals include all individuals, joint ventures, partnerships, corporations, trusts, nonprofit organizations, any other public or private entity, that will participate in the proposed
project as a sponsor, owner, prime contractor,
turnkey developer, managing agent, nursing
home administrator or operator, packager, or
consultant. Architects and attorneys who have
any interest in the project other than an arms
length fee arrangement for professional services are also considered principals by HUD.
In the case of partnerships, all general
partners regardless of their percentage interest and limited partners having a 25 percent or
more interest in the partnership are considered principals. In the case of public or private
corporations or governmental entities, principals include the president, vice president,
secretary, treasurer and all other executive
officers who are directly responsible to the
board of directors, or any equivalent governing body, as well as all directors and each
stockholder having a 10 percent or more interest in the corporation.
Affiliates are defined as any person or
business concern that directly or indirectly
controls the policy of a principal or has the
power to do so. A holding or parent corporation would be an example of an affiliate if one
of its subsidiaries is a principal.
Exception for Corporations – All principals
and affiliates must personally sign the certificate except in the following situation. When a
corporation is a principal, all of its officers,
directors, trustees and stockholders with 10
percent or more of the common (voting) stock
need not sign personally if they all have the
same record to report. The officer who is
authorized to sign for the corporation or agency
will list the names and title of those who elect
not to sign. However, any person who has a
record of participation in HUD projects that is
separate from that of his or her organization
must report that activity on this form and sign
his or her name. The objective is full disclosure.
Exemptions – The names of the following
parties do not need to be listed on form HUD2530: Public Housing Agencies, tenants, owners of less than five condominium or cooperative units and all others whose interests were
acquired by inheritance or court order.
Where and When Form HUD-2530 Must Be
Filed: The original of this form must be
submitted to the HUD Office where your project
application will be processed at the same time
you file your initial project application. This
form must be filed with applications for projects,
or when otherwise required in the situations
listed below:
• Projects to be financed with mortgages insured under the National Housing Act (FHA).
• Projects to be financed according to Section
202 of the Housing Act of 1959 (Elderly and
Handicapped).
• Projects in which 20 percent or more of the
units are to receive a subsidy as described in
24 C.F.R. 200.213.
• Purchase of a project subject to a mortgage
insured or held by the Secretary of HUD.
• Purchase of a Secretary-owned project.
• Proposed substitution or addition of a principal, or principal participation in a different
capacity from that previously approved for
the same project.
• Proposed acquisition by an existing limited
partner of an additional interest in a project
resulting in a total interest of 25 percent or
more, or proposed acquisition by a corporate stockholder of an additional interest in a
project resulting in a total interest of 10
percent or more.
• Projects with U.S.D.A., Farmers Home Administration, or with state or local government housing finance agencies that include
rental assistance under Section 8 of the
Housing Act of 1937. For projects of this
type, form HUD-2530 should be filed with the
appropriate applications directly to those
agencies.
Review of Adverse Determination: If approval of your participation in a HUD project is
denied, withheld, or conditionally granted on
the basis of your record of previous participation, you will be notified by the HUD Office.
You may request reconsideration by the HUD
Review Committee. Alternatively, you may
request a hearing before a Hearing Officer.
Either request must be made in writing within
30 days from your receipt of the notice of
determination.
If you do request reconsideration by the
Review Committee and the reconsideration
results in an adverse determination, you may
then request a hearing before a Hearing Officer. The Hearing Officer will issue a report to
the Review Committee. You will be notified of
the final ruling by certified mail.
Specific Line Instructions:
Reason for submitting this Certificatioin: e.g.,
refinance, management, change in ownership,
transfer of physical assets, etc.
Block 1: Fill in the name of the agency to
which you are applying. For example: HUD
Office, Farmers Home Administration District
office, or the name of a State or local housing
finance agency. Below that, fill in the name of
the city where the office is located.
Block 2: Fill in the name of the project, such
as "Greenwood Apts." If the name has not yet
been selected, write "Name unknown." Below
that, enter the HUD contract or project identification number, the Farmers Home Administration project number, or the State or local
housing finance agency project or contract
number. Include all project or contract identification numbers that are relevant to the
project.Also enter the name of the city in which
the project is located, and the ZIP Code of the
site location.
Block 3: Fill in the dollar amount requested in
the proposed mortgage, or the annual amount
of rental assistance requested.
Block 4: Fill in the number of apartment units
proposed, such as "40 units." For hospital
projects or nursing homes, fill in the number of
beds proposed, such as "100 beds."
Block 5: Fill in the section of the Housing Act
under which the application is filed.
Block 7: Definitions of all those who are
considered principals and affiliates are given
above in the section titled "Who Must Sign and
File...."
Block 8: Beside the name of each principal,
fill in the role that each will perform. The
following are possible roles that the principals
may perform: Sponsor, Owner, Prime Contractor, Turnkey Developer, Managing Agent,
Packager, Consultant, General Partner, Limited Partner (include percentage), Executive
Officer, Director, Trustee, Major Stockholder,
or Nursing Home Administrator. Beside the
name of each affiliate, write the name of the
person or firm of affiliation, such as "Affiliate of
Smith Construction Co."
ref Handbook 4065.1 form HUD-2530 (5/2001)
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Block 9: Fill in the percentage of ownership in
the proposed project that each principal is
expected to have. Also specify if the participant is a general or limited partner. Beside the
name of those parties who will not be owners,
write "None."
Block 10: Fill in the Social Security Number
or IRS employer number of every party listed,
including affiliates.
Instructions for Completing Schedule A:
Be sure that Schedule A is filled-in completely,
accurately and the certification is properly
dated and signed, because it will serve as a
legal record of your previous experience. All
Multifamily Housing projects involving HUD/
FmHA, and State and local Housing Finance
Agencies in which you have previously participated must be listed. Applicants are reminded that previous participation pertains to
the individual principal within an entity as well
as the entity itself. A newly formed company
may not have previous participation, but the
principals within the company may have had
extensive participation and disclosure of that
activity is required. To avoid duplication of
disclosure, list the project and then the entities or individuals involved in that project. You
may use the name or a number code to denote
the entity or individual that participated. The
number code can then be used in column 3 to
denote role.
Column 2 List the project or contract identification of each previous project. All previous
projects must be included or your certification cannot be processed. Include the name
of all projects, the cities in which they are
located and the government agency (HUD,
USDA-FmHA or State or local housing finance
agency) that was involved. At the end of your
list of projects, draw a straight line across the
page to separate your record of projects from
that of others signing this form who have a
different record to report.
Column 3 List the role(s) of your participation, dates participated, and if fee or identity of
interest with owners.
Column 4 Indicate the current status of the
loan. Except for current loans, the date associated with the status is required. Loans under
a workout arrangement are considered assigned. An explanation of the circumstances
surrounding the status is required for all noncurrent loans.
Column 5 Explain any project defaults during
your participation.
Column 6 Enter the latest Management and/
or Physical Inspection Review rating. If either
of the ratings are below average, the report
issued by HUD is required to be submitted
along with the applicant's explanation of the
circumstances surrounding the rating.
No Previous Record: Even if you have never
participated in a HUD project before, you must
complete form HUD-2530. If you have no
record of previous projects to list, fill in your
name in column 1 of Schedule A, and write
across the form by your name – "No previous
participation, first experience."
Master List System: If you expect to file this
form frequently and you have a long list of
previous projects to report on Schedule A, you
should consider filing a Master List. By doing
so, you will avoid having to list all your previous
projects each time you file a new application.
To make a Master List, use form HUD2530. On page 1, in block 1, enter (in capital
letters) the words "Master List." In blocks 2
through 6 enter in "N.A." meaning Not Applicable. Complete blocks 7 through 10.
In the box below the statement of certification, fill in the names of all parties who wish to
file a Master List together (type or print neatly).
Beside each name, every party must sign the
form. In the box titled "Proposed Role," fill in
"N.A." Also, fill in the date you sign the form
and provide a telephone number where you
can be reached during the day. No determinations will be made on these certificates.
File one copy of the Master List with each
HUD Office where you do business and mail
one copy to the following address:
HUD-2530 Master List
Participation and Compliance
Division – Housing
U.S. Department of Housing and
Urban Development
451 Seventh Street, S.W.
Washington, D.C. 20410
Once you have filed a Master List, you do not
need to complete Schedule A when you submit form HUD-2530. Instead, write the name of
the participant in column 1 of Schedule A and
beside that write "See Master List on file."
Also give the date that appears on the Master
List that you submitted. Below that, report all
changes and additions that have occurred
since that date. Be sure to include any mortgage defaults, assignments or foreclosures
not listed previously.
If you have withdrawn from a project since
the date the Master List was filed, be sure to
name the project. Give the project identification number, the month and year your participation began and/or ended.
Certification:
After you have completed all other parts of
form HUD-2530, including Schedule A, read
the Certification carefully. In the box below
the statement of certification, fill in the name
of all principals and affiliates (type or print
neatly). Beside the name of each principal and
affiliate, each party must sign the form, with
the exception in some cases of individuals
associated with a corporation (see "Exception
for Corporations" in the section of the instructions titled "Who Must Sign and File form
HUD-2530"). Beside each signature, fill in the
role of each party (the same as shown in block 8).
In addition, each person who signs the form
should fill in the date that he or she signs, as
well as providing a telephone number where
he or she can be reached during business
hours. By providing a telephone number where
you can be reached, you will help to prevent
any possible delay caused by mailing and
processing time in the event HUD has any
questions.
If you cannot certify and sign the certification as it is printed because some statements
do not correctly describe your record, use a
pen and strike through those parts that differ
with your record, then sign and certify to that
remaining part which does describe you or
your record.
Attach a signed letter, note or an explanation of the items you have struck out on the
certification and report the facts of your correct record. Item A(2)(e) relates to felony
convictions within the past 10 years. If you
have been convicted of a felony within 10
years, strike out all of A(2)(e) on the certificate
and attach your statement giving your explanation. A felony conviction will not necessarily
cause your participation to be disapproved
unless there is a criminal record or other
evidence that your previous conduct or method
of doing business has been such that your
participation in the project would make it an
unacceptable risk from the underwriting standpoint of an insurer, lender or governmental
agency.
The Department of Housing and Urban Development (HUD) is authorized to collect this information by law (42 U.S.C. 3535(d) and 24 C.F.R. 200.217) and by regulation at 24 CFR 200.210. This information
is needed so that principals applying to participate in multifamily programs can become HUD-approved participants. The information you provide will enable HUD to evaluate your record with respect
to established standards of performance, responsibility and eligibility. Without prior approval, a principal may not participate in a proposed or existing multifamily project. HUD uses this information to
evaluate whether or not principals pose an unsatisfactory underwriting risk. The information is used to evaluate the potential principals and approve only individuals and organizations who will honor
their legal, financial and contractual obligations.
Privacy Act Statement: The Housing and Community Development Act of 1987, 42 U.S.C. 3543 requires persons applying for a Federally-insured or guaranteed loan to furnish his/her Social Security Number
(SSN). HUD must have your SSN for identification of your records. HUD may use your SSN for automated processing of your records and to make requests for information about you and your previous records
with other public agencies and private sector sources. HUD may disclose certain information to Federal, State and local agencies when relevant to civil, criminal, or regulatory investigations and prosecutions.
It will not be otherwise disclosed or released outside of HUD, except as required and permitted by law. You must provide all of the information requested in this application, including your SSN.
Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the collection of information. This agency may not collect this information, and you are not required to complete this form, unless it
displays a currently valid OMB control number.
A response is mandatory. Failure to provide any of the information will result in your disapproval for participation in this HUD program.
Previous editions are obsolete
ref Handbook 4065.1 form HUD-2530 (5/2001)
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Management Entity Profile
U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval No. 2502-0305
(exp 04/30/2007)
See Public Reporting and Privacy Act statements on last page before completing this form
Instructions: The management entity may develop its own format for providing the information requested in this form. Independent fee managers and
identity-of-interest management agents must provide all the information requested. Owner-managers and administrators of projects for the elderly must
provide responses only to the asterisked items. They must also state whether they have previously managed insured and/or HUD-held projects and, if
so, list such projects.
*1a. Name of Management Entity
*1b. Management Entity Type
Owner/Manager
*1c. Employer Identification Number (EIN)
Project Administrator
Independent Fee Agent
Identity-of-Interest Agent
*1d. Organization Type
Corporation
Partnership
Individual
Other (specify)______________________________
*2. Give names, titles and Social Security Numbers of firm's principals (e.g., general partner, president, treasurer, etc.)
Name
Title
Social Security Number
3. Provide mailing addresses for the Company's home office and any branch offices involved in management of HUD-related multifamily projects.
Specify the geographic area covered by each office.
*4. What year (yyyy) did the company begin managing:
a. HUD-subsidized
b. HUD-related unsubsidized
projects
projects
5. Estimate what percent of company's activities involve management of:
a. Conventional
b. HUD-related
c. Commercial
d. Other
projects
projects
space
c. Conventional
projects
%
6a. How many of the following projects does the company manage?
(Both rentals and cooperatives)
HUD-unsubsidized
HUD-subsidized
HUD-owned
projects
units
projects
units
projects
units
6c. Approximately what percent of the projects in 6a fall into the following categories:
Elderly
Family
Owned by a non-profit or coop
%
%
%
%
6b. How many of the projects included in 6a:
Have HUD-held
Are non-insured
Are subsidized
mortgages
co-ops
Core city
Troubled neighborhood
%
%
%
Suburban
%
Are unsubsidized
co-ops
Rural area
%
%
7. Indicate where each of the following activities are administered. Use the following codes: C = central office; R = regional office; P = project site
Bookkeeping
Landscaping
Maintenance
Purchasing
Tenant application
Certifications/
Regular monthly
recertifications
subsidy billings
Special claims
subsidy billings
*8. How many of the company's full-time employees serve in the following supervisory or advisory roles?
(Owner-managers and administrators of projects for the elderly should provide this information on project employees.)
Engineers
Maintenance
Occupancy
Training specialists
Social service
Regional property
supervisors
supervisors
coordinators
managers
What percentage
are minority
How many are
minorities
%
*9. Identify any professional memberships, licenses, certificates or accreditations which are related to property management activities and are held by the company, company
executives, or the employees considered in Item 8. (attach additional page(s) if necessary)
Previous editions are obsolete
Page 1 of 4
form HUD-9832 (8/91)
ref. Handbook 4381.5
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
*10.
Describe any purchasing procedures you have implemented to control or reduce costs
(e.g., bulk purchasing, paying early to take advantage of discounts, cost comparisons or bids, etc.)
*11a. List any companies which regularly supply goods or services to your HUD-related projects and have an identity-of-interest with the management entity
or its principals (e.g., officers, general partners). Specify the type of goods and services provided. (See paragraph 2 - 3D of HUD Handbook 4381.5
for a definition of the term "identity-of-interest.") If these companies do not provide goods/services to all your HUD-related projects, identify the projects
that do not deal with these companies.
*11b. Do any of the identity-of-interest companies listed in 11a. function as "pass-throughs" -- i.e., does the identity-of-interest company purchase goods or
services from another party and pass those goods or services through to the project? For each pass-through arrangement:
(1) Name the identity-of-interest company involved.
(2) Explain how the identity-of-interest company's compensation is determined.
(3) Explain why it is more advantageous for the project to use the pass-through arrangement than to purchase directly from the ultimate supplier.
*12.
What types of property management procedures or operating manuals are used by on-site or supervisory staff?
*13.
What types of recurring written reports are prepared on project operations (e.g., maintenance, move-in/outs, payables, comparisons of budgeted and
actual expenses)? Specify who (by position title) prepares the report, frequency of the report, and who reviews the report.
*14a. How frequently do company executives or supervisory
staff visit the projects the company manages?
*14b. Specify who (by position title) conducts the on-site visits or reviews.
*15. If the company manages subsidized projects, identify by job title who prepares and reviews the HUD-required documents listed below. Specify the
frequency of review.
Prepares documents
Reviews documents
Frequency of review
a. Form HUD-50059, Initial Certifications
b. Form HUD-50059, Recertifications
c. Regular Monthly Subsidy Billings
d. Special Claims Subsidy Billings
e. Proposals to terminate tenant
assistance payments
f. Proposals to evict
g. Monthly Accounting Reports
(Forms HUD-93479, 80, 81)
h. Form HUD-949, Civil Rights Tenant
Characteristics/Occupancy Reports
Previous editions are obsolete
Page 2 of 4
form HUD-9832 (8/91)
ref. Handbook 4381.5
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Agent Name
Date (mm/dd/yyyy)
16.
If applicable, describe how the home office supervises supervisory staff
(e.g., property managers, occupancy specialists, maintenance supervisors), who operate out of branch offices.
*17.
Describe how the company trains its employees in the areas listed below. Discuss both on-going training and initial training provided when the employee
is hired. Specify the frequency and duration of the training and who/what organization conducts the training. Discuss training for both supervisory and
front-line staff.
a. Property management practices.
b. Financial and recordkeeping requirements.
c. Civil rights and fair housing laws.
d. Occupancy requirements in HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs (if the company manages
subsidized projects).
*18.
Has an owner of a HUD-related project, at any time during the past three years, cancelled a property management contract held by the company?
Yes
No
During the past three years, how many HUD-related projects have not renewed their management contracts with the company?
(Number)________________________
Explain the reasons for any cancellations or failure to renew and identify the projects involved.
Previous editions are obsolete
Page 3 of 4
form HUD-9832 (8/91)
ref. Handbook 4381.5
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
19a.
List all HUD Field Offices that have jurisdiction over the projects included in 6a. For companies that operate in more than five Field Office jurisdictions,
identify the five jurisdictions where the greatest number of your HUD-related projects are located.
19b.
List all State Agencies in whose jurisdiction you have managed or are managing State Agency-financed projects. For companies that operate in more
than five States, identify the five where the greatest number of your State Agency projects are located.
19c.
List all FmHA offices in whose jurisdiction you have managed or are managing FmHA projects. For companies that operate in more than five FmHA
jurisdictions, identify the five where the greatest number of your FmHA projects are located.
Certification: The undersigned hereby certifies that the statements and information contained in this profile are true and correct.
Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802)
Signed by Management Entity Representative
Signature
Print Name
Date (mm/dd/yyyy)
Title
Public reporting burden for this collection of information is estimated to average 2 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency
may not conduct or sponsor, and a person is not required to respond to, a collection information unless that collecton displays a valid OMB control number.
Owners of insured and assisted multifamily housing projects are required by HUD administrative guidelines as found in HUD Handbook 4381.5 REV-2, The
Management Agent Handbook, to submit certain data for review by the local HUD office of approval of a new management agent. These requirements
apply to insured multifamily projects or HUD-held mortgages and subsidized, non-insured projects that are not financed by State Agencies or the Rural
Housing Service Agency.
Privacy Act Statement: The Department of Housing and Urban Development (HUD) is authorized to collect this information by the U.S. Housing Act
of 1937, as amended, and the Social Security Numbers (SSN) by the Housing and Community Development Act of 1987, 42 U.S.C. 3543. The information
concerning management documents for Multifamily Housing projects is being collected by HUD to: (1) determine the acceptability of proposed
management agents, (2) ensure compliance with program requirements, (3) provide leverage for removing poor managers, and (4) recover excessive
management fees. The information is being used as a management tool to avoid the misuse of HUD subsides and defaults against the FHA insurance
fund by management agents. Specifically, the information will provide for improved project management by ensuring: that subsidy funds are administered
in accordance with HUD rules, project expenses are reasonable, maintenance of documented records, and use of project funds only in accordance with
HUD requirements. The SSN is used as a unique identifier. HUD may disclose this information to Federal, State and local agencies when relevant to civil,
criminal, or regulatory investigations and prosecutions. It will not be otherwise disclosed or released outside of HUD, except as permitted or required by
law. Failure to provide the information could result in HUD's denial of proposed management or fees or cancellation of management contracts for
noncompliance with HUD procedures. Providing the SSN is mandatory, and failure to provide it could affect your participation in HUD programs.
Previous editions are obsolete
Page 4 of 4
form HUD-9832 (8/91)
ref. Handbook 4381.5
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Project Owner's Certification
for Owner-Managed
Multifamily Housing Projects
U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval No. 2502-0305
(exp. 04/30/2007)
Public reporting burden for this collection of information is estimated to average 30 minutes per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency
may not conduct or sponsor, and a person is not required to respond to, a collection information unless that collecton displays a valid OMB control number.
Owners of insured and assisted multifamily housing projects are required by HUD administrative guidelines as found in HUD Handbook 4381.5 REV-2,
The Management Agent Handbook, to submit certain data for review by the local HUD office of approval of a new management agent. These requirements
apply to insured multifamily projects or HUD-held mortgages and subsidized, non-insured projects that are not financed by State Agencies or the Rural
Housing Service Agency.
Project name
FHA project number
City, State
Section 8 number
Acting on behalf of ______________________________________,
the Project Owner, I make the following certifications and agreements
to the United States Department of Housing and Urban Development
(HUD) regarding management of the above project.
1. I certify that:
a. I will comply with HUD requirements and contract obligations,
execute an acceptable management agreement, and agree that no
payments have been made to me (or agent thereof) in return for
awarding the management contract; and, such payments will not be
made in the future.
b. No management agent will be hired without HUD’s prior written
approval. Changes in the fee will be implemented only in accordance
with HUD’s requirements.
(1) Fees:
(a)___________% of residential income collected;
(b)___________% of commercial income collected;
(c)___________% of miscellaneous income collected (This
percentage must not exceed the percentage in (1)(a) above).
(d) Special Fees No
Yes
If yes, describe in paragraph
4 of Attachment 1.
(2) Calculation of Estimated Yield (See Attachment 1.)
c. I will disburse management fees from project income only after:
(1) We have submitted this Certification to HUD;
(2) HUD has approved us to manage this project; and
(3) HUD has approved the management fee (if required).
d. I understand that no fees may be earned or paid after HUD has
terminated my management of the project.
e. If HUD notifies me of an excessive management fee, I will within
30 days of HUD's notice either:
(1) Reduce the compensation to an amount HUD determines to be
reasonable and
(2) Require the administrator to refund to the project all excessive
fees collected, or
(3) Appeal HUD's decision and abide by the results of the appeal
process, making any required reductions and refunds within 30
days after the date of this decision letter on the appeal.
f. If HUD holds the residential management fee yield harmless
under the transition provisions of Chapter 3, Section 4 of HUD
Handbook 4381.5,
(1) I understand that HUD will adjust the management fee percentage each time HUD approves a rent increase.
(2) I agree to be bound by that percentage until the next rent increase
or until HUD approves a different fee, pursuant to my request.
2. I will, if the project is subsidized by HUD, select and admit tenants,
compute tenant rents and assistance payments, recertify tenants and
carry out other subsidy contract administration responsibilities in accordance with HUD Handbook 4350.3 and other HUD instructions.
3. I agree to:
a. Comply with this project’s Regulatory Agreement, Mortgage & Mortgage Note, and any subsidy contract or Workout / Modification Agreement.
Previous editions are obsolete
Date (mm/dd/yyyy)
b. Comply with HUD handbooks, notices or other policy directives
that relate to the management of the project.
4. I agree to:
a. Ensure that all expenses of the project are reasonable and necessary.
b. Exert reasonable effort to maximize project income and to take
advantage of discounts, rebates and similar money-saving techniques.
c. Obtain contracts, materials, supplies and services, including the
preparation of the annual audit, on terms most advantageous to the
project.
d. Credit the project with all discounts, rebates or commissions
(including any sales or property tax relief granted by the state or local
government) received.
e. Obtain the necessary verbal or written cost estimates and document the reasons for accepting other than the lowest bid.
f. Maintain copies of such documentation and make such documentation available for your inspection during normal business hours.
g. Invest project funds that HUD policies require to be invested and
take reasonable effort to invest other project funds .
h. Comply with HUD requirements regarding payment and reasonableness of management fees and allocation of management costs
between the management fee and the project account.
i. Refrain from purchasing goods or services from entities that have
identity-of-interest with us unless the costs are as low as or lower
than arms-length, open-market purchases.
5. I certify that the types of insurance policies checked below are in
force and will be maintained to the best of my ability at all times. Fidelity
bonds and hazard insurance policies will name HUD as an additional
payee in the event of a loss. Note: For any box not checked, attach an
explanation as to why you cannot obtain that type of insurance. Such
situations should be extremely rare.
a.
Fidelity bond or employee dishonesty coverage for
(1) all principals of the ownership entity and;
(2) all persons who participate directly or indirectly in the management and maintenance of the project and its assets, accounts
and records. Coverage will be at least equal to the project’s gross
potential income for two (2) months.
b.
Hazard insurance coverage in an amount required by the
projects Mortgage.
c.
Public liability coverage.
6. I agree to:
a. Furnish a response to HUD’s management review reports, physical inspection reports and written inquiries regarding the project’s
annual financial statements or monthly accounting reports within 30
days after receipt of the report or inquiry.
b. Establish and maintain the project’s accounts, books and records
in accordance with:
(1) HUD’s administrative requirements;
(2) generally accepted accounting principles; and
(3) in a condition that will facilitate audit.
Page 1 of 4
form HUD-9839-A (05/2003)
ref. Handbooks 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
7. I agree that:
a. All records related to the operation of the project, regardless of where
they are housed, shall be considered the property of the project.
b. HUD, the General Accounting Office (GAO), and those agencies’
representatives may inspect:
(1) any records which relate to the project’s purchase of goods or
services;
(2) the records of the owner and the agent; and,
(3) the records of companies having an identity-of-interest with me.
c. The following clause will be included in any contract entered into
with an identity-of-interest individual or business for the provision
of goods or services to the project: “Upon request of HUD or (name
of owner ), (name of contractor or supplier) will make available to
HUD, at a reasonable time and place, its records and records of
identity-of-interest companies which relate to goods and services
charged to the project. Records and information will be sufficient to
permit HUD to determine the services performed, the dates the
services were performed, the location at which the services were
performed, the time consumed in providing the services, the charges
made for materials, and the per-unit and total charges levied for said
services.” I agree to request such records within seven (7) days of
receipt of HUD’s request to do so.
8. I Understand that:
a. HUD has the right to terminate this self-management arrangement
for failure to comply with the provisions of this Certification, or
other good cause, thirty days after HUD has mailed me a written
notice of its desire to terminate my authority to manage the project.
b. In the event of a default under the Mortgage, Note or Regulatory
Agreement, HUD has the right to terminate my authority to manage
the project immediately upon HUD’s issuance of a notice of termination.
c. If HUD exercises this right of termination, I agree to promptly
select an agent that is acceptable to HUD.
d. If there is a conflict between the Management Agreement & HUD’s
rights and requirements, HUD's rights & requirements will prevail.
e. If my authority to manage the project is terminated, I agree to
immediately turn over to the new agent all of the project's cash, trust
accounts investments and records.
9. I agree to submit a new Management Certification to HUD before
taking any of the following actions:
a. Charge fees different from the percentage fees and any special
fees specified in Paragraph 1 of this Certification:
b. Permit an entity other than me to operate the project .
c. Permit an entity other than me to collect a fee.
10. I agree to:
a. Comply with all Federal, state, or local laws prohibiting discrimination against any persons on grounds of race, color, creed, familial
status, handicap, sex or national origin, including Title VI of the
Civil Rights Act of 1964, Fair Housing Act, Executive Order 11063
and all regulations implementing those laws.
b. When the head or spouse is otherwise eligible, give families with
children equal consideration for admission.
c. Give handicapped persons priority for subsidized units that were
built and equipped specifically for the handicapped.
d. If the project receives any form of direct Federal financial assistance, comply with the provisions of Section 504 of the Rehabilitation Act of 1973, as amended, the Age Discrimination Act of 1975
and all regulations and administrative instructions implementing
these laws. The owner understands that these laws and regulations
prohibit discrimination against applicants or tenants who are handicapped or of a certain age.
e. Furnish HUD’s Office of Fair Housing and Equal Opportunity
any reports and information required to monitor the project’s compliance with HUD’s fair housing and affirmative marketing requirements (including HUD Form 949, if applicable).
f. Not discriminate against any employee, applicant for employment
or contractor because of race, color, handicap, religion, sex or
national origin.
Previous editions are obsolete
g. Provide minorities, women and socially and economically disadvantaged firms equal opportunity to participate in the project's
procurement and contracting activities.
h. If the project receives any form of direct Federal financial assistance, comply with Section 3 of the Housing and Urban Development
Act of 1968 and its implementing regulations. I understand that this
law and the regulations require the project to make training, employment and contracting opportunities available, to the greatest extent
feasible, to lower-income project area residents and small businesses.
11. I certify that I have read and understand HUD’s definition of
“identity-of-interest” and that the statement(s) checked and information
entered below are true. (Check box a or b.)
No identity-of-interest exists among me and any individuals or
a.
companies that regularly do business with the project.
b.
Only those individuals and companies listed in Section 11a of
the Management Entity Profile have an identity-of-interest
with me.
12. I certify and agree:
a. that the Management Entity Profile, dated(mm/dd/yyyy) _________,
is accurate and current as of the date of this Certification.
b. To submit an updated profile whenever there is a significant
change in the organization or operations of the management entity of
the project.
13. The items checked below are attached:
New Management Entity Profile
Updated Management Entity Profile
Attachment 1, Calculation of Estimated Yields from Proposed
Management Fees
Other (Specify)_____________
Warnings:
There are fines and imprisonment—$10,000/5years—for anyone who
makes false, fictitious, or fraudulent statements or entries in any matter
within the jurisdiction of the Federal Government (18 U.S.C 1001).
There are fines and imprisonment—$250,000/5years—for anyone who
misuses rents & proceeds in violation of HUD regulations relative to this
project. This applies when the mortgage note is in default or when the
project is in a nonsurplus cash position (12 U.S.C 1715z-9).
HUD may seek a “double damages” civil remedy for the use of assets
or income in violation of any Regulatory Agreement or any applicable
HUD regulations (12 U.S.C 1715z-4a).
HUD may seek additional civil money penalties to be paid by the
mortgagor through personal funds for :
(1) Violation of an agreement with HUD to use nonproject funds for
certain specified purposes as a condition of receiving transfers of
physical assets, flexible subsidy loan, capital improvement loan, modification of mortgage terms or workout. The penalties could be as much
as the HUD Secretary's loss at foreclosure sale or sale after foreclosure.
(2) Certain specific violations of the Regulatory Agreement, the penalties could be as much as $25,000 per occurrence (12 U.S.C 1735f-15).
By Project Owner: Name
title
signature
date (mm/dd/yyyy)
Page 2 of 4
form HUD-9839-A (05/2003)
ref. Handbooks 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Project Name
FHA Project Number
Date (mm/dd/yyyy)
HUD Field Office Use Only (Check all boxes that apply)
An up-front review of the management fee was:
Required
Not required
The management fees quoted in paragraph 1a and explained in Attachment 1 of this Certification are approved.
The management fees quoted in Paragraph 1a and explained in Attachment 1 of this Certification are not approved.
The attached letter, dated (mm/dd/yyyy) ______________, explains the reasons for this disapproval and sets forth the allowable management fees.
The residential management fee Percentage is held harmless at __________%.
The residential management fee Yield is held capped at $__________PUPM. Each time you approve a rent increase, adjust the management fee
Percentage to maintain this yield and enter the information required below.
Effective Date (mm/dd/yyyy)
of New Fee %*
Monthly Rent Potential
Collections % Assumed**
Adjusted Management
Fee Percentage
* This should be the same date the rent increase is effective.
** 95% unless you approve a different percentage.
By Project Manager
Signature
By Supervisory Project Manager/Hub Director
Date (mm/dd/yyyy)
Signature
Name
Name
Title
Title
Previous editions are obsolete
Page 3 of 4
Date (mm/dd/yyyy)
form HUD-9839-A (05/2003)
ref. Handbooks 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Attachment 1—Calculation of Estimated Yields from Proposed Management Fees
Project Name
FHA Project Number
1.
Residential Fee
a.
Monthly residential rent potential (from Part A
of the most recent HUD-approved Rent Schedule $
b.
Line 1a times 0.95 *
c.
Percentage fee
d.
Monthly residential fee yield (Line 1b times 1c)
e.
Total number of residential units (include
rent-free units.)
f.
*
Residential fee yield per unit per month
(Line 1d divided by 1e.)
Date (mm/dd/yyyy)
2. Commercial Fee (Describe commercial space, how it is used and what
services management provides.)
$
0.000%
%
$
units
$
PUPM
Note: Generally collections must be estimated at 95% of gross potential.
If you use a lower percentage, attach an explanation for the collections
percentage used. Make sure that any assumption of a lower collections
base does not compensate the agent for services for which a special fee
will be paid.
b.
Percentage fee
a. Monthly commercial rent potential (fromPart E
of the most recent HUD-approved Rent
Schedule)
$
%
0.000%
c.Commercial fee yield (Line 2a times 2b)
$
3.
a.
Miscellaneous Fee
Percentage fee (not to exceed the residential income fee percentage in Line 1c)
b.
List any miscellaneous income on which HUD allows a fee to be taken, but on which you have agreed a fee will not be paid.
0.00% %
4. Special Fees
Show dollar amount(s), purpose(s) and time period(s) covered. Describe performance standards and target dates for accomplishment of special tasks.
(Attach additional sheets, if needed.)
Previous editions are obsolete
Page 4 of 4
form HUD-9839-A (05/2003)
ref. Handbooks 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Project Owner's/Management Agent's Certification
for Multifamily Housing Projects
for Identity-of-Interest
or Independent Management Agents
U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval No. 2502-0305
(exp. 04/30/2007)
Public reporting burden for this collection of information is estimated to average 15 minutes per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency may
not conduct or sponsor, and a person is not required to respond to, a collection information unless that collecton displays a valid OMB control number.
Owners of insured and assisted multifamily housing projects are required by HUD administrative guidelines as found in HUD Handbook 4381.5 REV-2, The
Management Agent Handbook, to submit certain data for review by the local HUD office of approval of a new management agent. These requirements
apply to insured multifamily projects or HUD-held mortgages and subsidized, non-insured projects that are not financed by State Agencies or the Rural
Housing Service Agency.
Project name
FHA project number
City, State
Section 8 number
Acting on behalf of ____________________________________________,
the Project Owner (Owner), and ___________________________________,
the Management Agent (Agent), we make the following certifications and
agreements to the United States Department of Housing and Urban Development
(HUD) regarding management of the above project.
1. We certify that:
a. We will comply with HUD requirements and contract obligations, and
agree that no payments have been made to the owner in return for awarding
the management contract to the agent, and that such payments will not be
made in the future.
b. We have executed or will execute, within 30 days after receiving the
approval(s) required by paragraph b below, a Management Agreement for
this project The Agreement provides / will provide that the Management
Agent will manage the project for the term and fee described below. Changes
in the fee will be implemented only in accordance with HUD’s requirements
(1) Term of Agreement:_____________________________________
(2) Fees:
(a)___________% of residential income collected;
(b)___________% of commercial income collected;
(c)___________% of miscellaneous income collected
(This percentage must not exceed the percentage in (2)(a) above).
Yes
If yes, describe in paragraph 4
(d) Special Fees No
of Attachment 1.
(3) Calculation of Estimated Yield (See Attachment 1.)
c. We will disburse management fees from project income only after:
(1) We have submitted this Certification to HUD;
(2) HUD has approved the Agent to manage this project; and
(3) HUD has approved the management fee (if required).
d. We understand that no fees may be earned or paid after HUD has
terminated the Management Agreement.
e. If HUD notifies me of an excessive management fee, I, the Agent, will
within 30 days of HUD's notice either:
(1) Reduce the compensation to an amount HUD determines to be reasonable and
(2) Require the administrator to refund to the project all excessive fees
collected, or
(3) Appeal HUD's decision and abide by the results of the appeal p r o cess, making any required reductions and refunds within 30 days after the
date of this decision letter on the appeal.
f. If HUD holds the residential management fee yield harmless under the
transition provisions of Chapter 3, Section 4 of HUD Handbook 4381.5,
(1) We understand that HUD will adjust the management fee percentage
each time HUD approves a rent increase.
(2) We agree to be bound by that percentage until the next rent increase
or until HUD approves a different fee, pursuant to our request.
2. We will, if the project is subsidized by HUD, select and admit tenants,
compute tenant rents and assistance payments, recertify tenants and carry out
other subsidy contract administration responsibilities in accordance with HUD
Handbook 4350.3 and other HUD instructions.
3. We agree to:
a. Comply with this project’s Regulatory Agreement, Mortgage & Mortgage
Note, and any Subsidy Contract or Workout / Modification Agreement.
Previous editions are obsolete
Date (mm/dd/yyyy)
b. Comply with HUD handbooks, notices or other policy directives that
relate to the management of the project.
c. Comply with HUD requirements regarding payment and reasonableness
of management fees and allocation of management costs between the management fee and the project account.
d. Refrain from purchasing goods or services from entities that have identity-of-interest with us unless the costs are as low as or lower than armslength, open-market purchases.
4. The Agent agrees to:
a. Ensure that all expenses of the project are reasonable and necessary.
b. Exert reasonable effort to maximize project income and to take advantage
of discounts, rebates and similar money-saving techniques.
c. Obtain contracts, materials, supplies and services, including the preparation of the annual audit, on terms most advantageous to the project.
d. Credit the project with all discounts, rebates or commissions (including any
sales or property tax relief granted by the State or local government) received.
e. Obtain the necessary verbal or written cost estimates and document the
reasons for accepting other than the lowest bid.
f. Maintain copies of such documentation and make such documentation
available for your inspection during normal business hours.
g. Invest project funds that HUD policies require to be invested and take
reasonable effort to invest other project funds unless the owner specifically
directs the Agent not to invest those other funds.
5. We certify that the types of insurance policies checked below are in force and
will be maintained to the best of our ability at all times. Fidelity bonds and hazard
insurance policies will name HUD as an additional payee in the event of loss.
Note: For any box not checked, attach an explanation as to why you cannot obtain
that type of insurance. Such situations should be extremely rare.
Fidelity bond or employee dishonesty coverage for
a.
(1) all principals of the Agent and;
(2) all persons who participate directly or indirectly in the management
and maintenance of the project and its assets, accounts and records.
Coverage will be at least equal to the project’s gross potential income for
two (2) months.
Hazard insurance coverage in an amount required by the project's
b.
Mortgage.
c.
Public liability coverage with the Agent designated as one of the
insured.
6. The Agent agrees to:
a. Furnish a response to HUD’s management review reports, physical
inspection reports and written inquiries regarding the project’s annual
financial statements or monthly accounting reports within 30 days after
receipt of the report or inquiry.
b. Establish and maintain the project’s accounts, books and records in
accordance with:
(1) HUD’s administrative requirements;
(2) generally accepted accounting principles; and
(3) in a condition that will facilitate audit.
7. We agree that:
a. All records related to the operation of the project, regardless of where they
are housed, shall be considered the property of the project.
b. HUD, the General Accounting Office (GAO), and those agencies’ representatives may inspect :
Page 1 of 4
form HUD-9839-B (06/2003)
ref. Handbook 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
(1) any records which relate to the project’s purchase of goods or services,
(2) the records of the Owner and the Agent, and
(3) the records of companies having an identity-of-interest with the
owner and the agent.
c. The following clause will be included in any contract entered into with an
identity-of-interest individual or business for the provision of goods or
services to the project: “Upon request of HUD or (name of owner or Agent),
(name of contractor or supplier) will make available to HUD, at a reasonable
time and place, its records and records of identity-of-interest companies
which relate to goods and services charged to the project. Records and
information will be sufficient to permit HUD to determine the services
performed, the dates the services were performed, the location at which the
services were performed, the time consumed in providing the services, the
charges made for materials, and the per-unit and total charges levied for said
services.” The owner agrees to request such records within seven (7) days of
receipt of HUD’s request to do so.
8. We certify that any Management Agreement does not contain the type of
“hold harmless” clause prohibited by HUD.
9. We agree to include the following provisions in the Management Agreement
and to be bound by them:
a. HUD has the right to terminate the Management Agreement for failure
to comply with the provisions of this Certification, or other good cause, thirty
days after HUD has mailed the owner a written notice of its desire to
terminate the Management Agreement.
b. In the event of a default under the Mortgage, Note or Regulatory Agreement, HUD has the right to terminate the Management Agreement immediately upon HUD’s issuance of a notice of termination to the Owner and
Agent.
c. If HUD exercises this right of termination, I, the Owner, agree to promptly
make arrangements for providing management that is satisfactory to HUD.
d. If there is a conflict between the Management Agreement & HUD’s rights
and requirements, HUD's rights & requirements will prevail.
e. If the Management Agreement is terminated I, the Agent, will give to the
Owner all of the project's cash, trust accounts investments and records within
thirty (30) days of the date the Management Agreement is terminated.
10. I, the Owner, agree to submit a new Management Certification to HUD before
taking any of the following actions:
a. Authorizing the agent to collect a fee different from the percentages fees
and any special fees specified in Paragraph 1 of this Certification:
b. Changing the expiration date of the Management Agreement.
c. Renewing the Management Agreement.
d. Permitting a new Agent to operate the project.
e. Permitting a new Agent to collect a fee.
f. Undertaking self-management of the project.
11. We agree to:
a. Comply with all Federal, State, or local laws prohibiting discrimination
against any persons on grounds of race, color, creed, familial status, handicap, sex or national origin, including Title VI of the Civil Rights Act of 1964,
Fair Housing Act, , Executive Order 11063 and all regulations implementing
those laws.
b. When the head or spouse is otherwise eligible, give families with children
equal consideration for admission.
c. Give handicapped persons priority for subsidized units that were built
and equipped specifically for the handicapped.
d. If the project receives any form of direct Federal financial assistance,
comply with the provisions of Section 504 of the Rehabilitation Act of 1973,
as amended, the Age Discrimination Act of 1975 and all regulations and
administrative instructions implementing these laws. The Agent understands
that these laws and regulations prohibit discrimination against applicants or
tenants who are handicapped or of a certain age.
e. Furnish HUD’s Office of Fair Housing and Equal Opportunity any reports
and information required to monitor the project’s compliance with HUD’s
fair housing and affirmative marketing requirements (including HUD Form
949, if applicable).
f. Not discriminate against any employee, applicant for employment or
contractor because of race, color, handicap, religion, sex or national origin.
g. Provide minorities, women and socially and economically disadvantaged
firms equal opportunity to participate in the project's procurement and
contracting activities.
h. If the project receives any form of direct Federal financial assistance,
comply with Section 3 of the Housing and Urban Development Act of 1968
Previous editions are obsolete
and its implementing regulations. I, the Agent, understand that this law and
the regulations require the project to make training, employment and contracting opportunities available, to the greatest extent feasible, to lowerincome project area residents and small businesses.
12.We certify that we have read and understand HUD’s definition of “identityof-interest” and that the statement(s) checked and information entered below are
true. (Check box a or boxes b and / or c.)
a.
No identity-of-interest exists among the Owner, the Agent and any
individuals or companies that regularly do business with the project.
Only individuals and companies listed in Section 11a of the
b.
Management Entity Profile have an identity-of-interest with the Agent.
Only the individuals and companies listed below have an identity-ofc.
interest with the Owner. (Show the name of the individual or company; list
the services rendered; and describe the nature of the identity-of-interest
relationship. Attach additional sheets, if necessary.)
13.I/We, the Agent, certify & agree:
a. that the Management Entity Profile, dated (mm/dd/yyyy)_____________,
is accurate and current as of the date of this Certification.
b. To submit an updated profile whenever there is a significant change in the
organization or operations of the Management Entity.
14.The items checked below are attached:
Attachment 1–Calculation of Est. Yields from Proposed Mgt Fees
New Management Entity Profile
Updated Management Entity Profile
Other (Specify)_______________________________________
Warnings:
There are fines and imprisonment—$10,000/5years—for anyone who makes
false, fictitious, or fraudulent statements or entries in any matter within the
jurisdiction of the Federal Government (18 U.S.C 1001).
There are fines and imprisonment—$250,000/5years—for anyone who misuses
rents & proceeds in violation of HUD regulations relative to this project. This
applies when the mortgage note is in default or when the project is in a
nonsurplus cash position (12 U.S.C 1715z-9).
HUD may seek a “double damages” civil remedy for the use of assets or income
in violation of any Regulatory Agreement or any applicable HUD regulations (12
U.S.C 1715z-4a).
HUD may seek additional civil money penalties to be paid by the mortgagor
through personal funds for :
(1) Violation of an agreement with HUD to use nonproject funds for certain
specified purposes as a condition of receiving transfers of physical assets,
flexible subsidy loan, capital improvement loan, modification of mortgage terms
or workout. The penalties could be as much as the HUD Secretary's loss at
foreclosure sale or sale after foreclosure.
(2) Certain specific violations of the Regulatory Agreement, the penalties could
be as much as $25,000 per occurrence (12 U.S.C 1735f-15).
By Project Owner: Name
title
signature
date (mm/dd/yyyy)
By Management Agent: Name
title
signature
date (mm/dd/yyyy)
Page 2 of 4
form HUD-9839-B (06/2003)
ref. Handbook 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Project Name
FHA Project Number
Date (mm/dd/yyyy)
HUD Field Office Use Only (Check all boxes that apply)
An up-front review of the management fee was:
Required
Not required
The management fees quoted in paragraph 1a and explained in Attachment 1 of this Certification are approved.
The management fees quoted in Paragraph 1a and explained in Attachment 1 of this Certification are not approved.
The attached letter, dated (mm/dd/yyyy) _____________, explains the reasons for this disapproval and sets forth the allowable management fees.
The residential management fee Percentage is held harmless at __________%.
The residential management fee Yield is capped at $__________PUPM. Each time you approve a rent increase, adjust the management fee
Percentage to maintain this yield and enter the information required below.
Effective Date (mm/dd/yyyy)
of New Fee %*
Monthly Rent Potential
Collections % Assumed**
Adjusted Management
Fee Percentage
* This should be the same date the rent increase is effective.
** 95% unless you approve a different percentage.
By Project Manager
Signature
By Supervisory Project Manager/Hub Director
Date (mm/dd/yyyy)
Signature
Name
Name
Title
Title
Previous editions are obsolete
Page 3 of 4
Date (mm/dd/yyyy)
form HUD-9839-B (06/2003)
ref. Handbook 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Attachment 1—Calculation of Estimated Yields from Proposed Management Fees
Project Name:
FHA Project No.:
1.
Residential Fee
a.
Monthly residential rent potential (from Part A
of the most recent HUD-approved Rent Schedule $
b.
Line 1a times 0.95 *
c.
Percentage fee
d.
Monthly residential fee yield (Line 1b times 1c)
e.
Total number of residential units (include
rent-free units.)
f.
*
Residential fee yield per unit per month
(Line 1d divided by 1e.)
Date:
2.
Commercial Fee (Describe commercial space, how it is used and what
services management provides.)
$
%
$
units
$
PUPM
Note: Generally collections must be estimated at 95% of gross potential.
If you use a lower percentage, attach an explanation for the collections
HUD-approved Rent percentage used. Make sure that any assumption
of a lower collections base does not compensate the agent for services
for which a special fee will be paid.
a. Monthly commercial rent potential (from Part E
of the most recent HUD approved Rent
Schedule)
$
b. Percentage fee
%
c. Commercial fee yield (Line 2a times 2b)
$
3.
a.
Miscellaneous Fee
Percentage fee (not to exceed the residential income fee percentage in Line 1c)
b.
List any miscellaneous income on which HUD allows a fee to be taken, but on which you have agreed a fee will not be paid.
%
4. Special Fees
Show dollar amount(s), purpose(s) and time period(s) covered. Describe performance standards and target dates for accomplishment of special tasks. (Attach
additional sheets, if needed.)
Previous editions are obsolete
Page 4 of 4
form HUD-9839-B (06/2003)
ref. Handbook 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Project Owner's / Borrower's Certification
for Elderly Housing Projects
Managed by Administrators
U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval No. 2502-0305
(exp. 04/30/2007)
Public reporting burden for this collection of information is estimated to average 15 minutes per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency
may not conduct or sponsor, and a person is not required to respond to, a collection information unless that collecton displays a valid OMB control number.
Owners of insured and assisted multifamily housing projects are required by HUD administrative guidelines as found in HUD Handbook 4381.5 REV-2,
The Management Agent Handbook, to submit certain data for review by the local HUD office of approval of a new management agent. These requirements
apply to insured multifamily projects or HUD-held mortgages and subsidized, non-insured projects that are not financed by State Agencies or the Rural
Housing Service Agency.
Project name
FHA project number
City, State
Section 8 number
Acting on behalf of the Board of Directors of the Project Owner (Borrower
Corporation for 202 projects), I make the following certifications and agreements
to the United States Department of Housing and Urban Development (HUD)
regarding management of the above project.
1. I certify that:
a. The owner/borrower will comply with HUD requirements and contract
obligations, and will not receive payments in return for awarding the
administrator's responsibilities to him/her or to an agent thereof, and that such
payments will not be made in the future.
b. The administrator’s duties are specified in the following document(s).
(Check one or both boxes below.)
Position Description
Employment agreement
c. The above document(s) provide that the administrator will manage the
project for the term and compensation described below.
(1) Term of employment:
(2) Compensation (Describe salary, fringe benefits, bonuses, etc.):
d. The administrator will be paid from project income only after we have:
(1) Submitted this Certification to HUD;
(2) HUD has approved the administrator to manage this project; and
(3) HUD has approved the administrator's compensation, if required by
HUD's administrative procedures.
e. I understand that no compensation may be earned or paid after HUD has
terminated the administrator’s management of the project.
f. If HUD notifies me that the administrator’s compensation is excessive,
within 30 days I will either:
(1) Reduce the compensation to an amount HUD determines to be reasonable
and
(2) Require the administrator to refund to the project all excessive fees collected,
or
(3) Appeal HUD's decision and abide by the results of the appeal process,
making any required reductions and refunds within 30 days after the date of
this decision letter on the appeal.
g. I will ensure that the administrator reads and understands all applicable HUD
handbooks, notices and policy directives that impose requirements on project
management.
2. If the project is subsidized by HUD, I agree to and will require the administrator
to select and admit tenants, compute tenant rents and assistance payments, recertify
tenants and carry out other subsidy contract administration responsibilities in
accordance with HUD Handbook 4350.3 and other HUD instructions.
3. I agree to:
a. Comply with this project’s Regulatory Agreement, Mortgage & Mortgage
Note, and any subsidy contract or Workout/Modification Agreement.
b. Comply with HUD handbooks, notices or other policy directives that relate
to the management of the project.
4. I agree to and will require the administrator to:
a. Ensure that all project expenses are reasonable and necessary.
b. Refrain from purchasing goods or services from entities that have identityof-interest with us unless the costs are as low as or lower than arms-length, openmarket purchases.
Previous editions are obsolete
Date (mm/dd/yyyy)
c. Exert reasonable effort to maximize project income and to take advantage
of discounts, rebates and similar money-saving techniques.
d. Obtain contracts, materials, supplies and services, including preparation of
the annual audit, on terms most advantageous to the project.
e. Credit the project with all discounts, rebates or commissions (including
sales/property tax relief granted by State/local government).
f. Obtain the necessary verbal or written cost estimates and document the
reasons for accepting other than the lowest bid.
g. Maintain copies of such documentation and make such documentation
available for your inspection during normal business hours.
h. Invest project funds that HUD policies require to be invested and take
reasonable effort to invest other project funds unless the owner specifically
directs the administrator not to invest those other funds.
5. I certify that the types of insurance policies checked below are in force and will
be maintained to the best of our ability at all times. Fidelity bonds and hazard
insurance policies will name HUD as an additional payee in the event of a loss. Note:
For any box not checked, attach an explanation as to why you cannot obtain that type
of insurance. Such situations should be extremely rare.
Fidelity bond or employee dishonesty coverage for
a.
(1) the administrator and;
(2) all persons who participate directly or indirectly in the management and
maintenance of the project and its assets, accounts and records. Coverage
will be at least equal to the project’s gross potential income for two (2) months.
b.
Hazard insurance coverage in an amount required by the projects
Mortgage.
c.
Public liability coverage with the owner, sponsor, and administrator
designated as the insured.
6. I will require the administrator to:
a. Furnish a response to HUD’s management review reports, physical inspection reports and written inquiries regarding the project’s annual financial
statements or monthly accounting reports within 30 days after receipt of the
report or inquiry.
b. Establish and maintain the project’s accounts, books and records in accordance
with:
(1) HUD’s administrative requirements;
(2) generally accepted accounting principles; and
(3) in a condition that will facilitate audit.
7. I will require the administrator to adhere to the following:
a. All records related to the operation of the project, regardless of where they
are housed, shall be considered the property of the project.
b. HUD, the General Accounting Office (GAO), and those agencies’ representatives may inspect:
(1) any records which relate to the project’s purchase of goods or services;
(2) the records of the owner and the administrator; and,
(3) the records of companies having an identity-of-interest with the owner
and the administrator.
c. The following clause will be included in any contract entered into with an
identity-of-interest individual or business for the provision of goods or services
to the project: “Upon request of HUD or (name of owner or administrator),
(name of contractor or supplier) will make available to HUD, at a reasonable
time and place, its records and records of identity-of-interest companies which
relate to goods and services charged to the project. Records and information will
be sufficient to permit HUD to determine the services performed, the dates the
Page 1 of 2
form HUD-9839-C (05/2003)
ref Handbooks 4381.5 & 4571.4
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
services were performed, the location at which the services were performed, the
time consumed in providing the services, the charges made for materials, and the
per-unit and total charges levied for said services.” The owner agrees to request
such records within seven (7) days of receipt of HUD’s request to do so.
8. I certify that any employment agreement does not contain the type of “hold
harmless” clause prohibited by HUD.
9. I agree to include the following provisions in the employment agreement and to
be bound by them:
a. HUD has the right to terminate the employment agreement for failure to
comply with the provisions of this Certification, or other good cause, thirty days
after HUD has mailed me a written notice of its desire to terminate the
employment agreement.
b. In the event of a default under the Mortgage, Note or Regulatory Agreement,
HUD has the right to terminate the employment agreement immediately upon
HUD’s issuance of a notice of termination to the administrator and me.
c. If HUD exercises this right of termination, I agree to promptly make
arrangements for providing management that is satisfactory to HUD.
d. If there is a conflict between the Employment Agreement & HUD’s rights
and requirements, HUD's rights and requirements will prevail.
e. If agreement is terminated, I will require the administrator to give me all of
the project's cash, trust accounts investments and records within thirty (30 days
of the date the agreement is terminated.
10. I agree to:
a. To submit a new management certification to HUD before permitting a new
administrator or agent to operate the project and/or collect compensation or fees.
b. Comply with all Federal, State, or local laws prohibiting discrimination
against any persons on grounds of race, color, creed, familial status, handicap,
sex or national origin, including Title VI of the Civil Rights Act of 1964, Fair
Housing Act, Executive Order 11063 and all regulations implementing those laws.
c. When the head or spouse is otherwise eligible, give families with children
equal consideration for admission.
d. Give handicapped persons priority for subsidized units that were built and
equipped specifically for the handicapped.
e. If the project receives any form of direct Federal financial assistance,
comply with the provisions of Section 504 of the Rehabilitation Act of 1973, as
amended, the Age Discrimination Act of 1975 and all regulations and administrative instructions implementing these laws. I understand that these laws and
regulations prohibit discrimination against applicants or tenants who are handicapped or of a certain age.
f. Furnish HUD’s Office of Fair Housing and Equal Opportunity any reports and
information required to monitor the project’s compliance with HUD’s fair housing
and affirmative marketing requirements (including HUD Form 949, if applicable).
g. Not discriminate against any employee, applicant for employment or contractor because of race, color, handicap, religion, sex or national origin.
h. Provide minorities, women and socially and economically disadvantaged firms
equal opportunity to participate in the project's procurement and contracting
activities.
i. If the project receives any form of direct Federal financial assistance,
comply with Section 3 of the Housing and Urban Development Act of 1968 and
its implementing regulations. I understand that this law and the regulations
require the project to make training, employment and contracting opportunities
available, to the greatest extent feasible, to lower-income project area residents
and small businesses.
11.I certify that I have read and understand HUD’s definition of “identity-ofinterest” and that the statement(s) checked and information entered below are true.
(Check box a or boxes b and / or c.)
a.
No identity-of-interest exists among the owner, the administrator and
any individuals or companies that regularly do business with the project.
b.
Only those individuals and companies listed in Section 11a of the
Management Entity Profile have an identity-of-interest with the administrator.
c.
Only the individuals and companies listed below have an identity-ofinterest with the owner. (Show the name of the individual or company; list the
services rendered; and describe the nature of the identity-of-interest relationship. Attach additional sheets, if necessary.)
12.I certify that the administrator has had (check box a or b):
no previous relationship(s) with this project
a.
b.
previous relationship(s) as follows (Describe the relationship(s) and
period(s) covered, e.g., “member of Board of Directors, 1987-1990”.)
13.I certify that the administrator now manages (Check box a or b):
a.
no other project with an insured or HUD-held mortgage
b.
the additional project(s) described below (Give project name, location,
and FHA project number.)
14. I/We certify & agree:
a. that the Management Entity Profile, dated (mm/dd/yyyy) ______________,
is accurate and current as of the date of this Certification.
b. To submit an updated profile whenever there is a significant change in the
organization or operations of the project administrator.
15.The items checked below are attached:
New Management Entity Profile (Check this box only if you are
updating a profile or submitting a profile for the first time. Do not attach
a profile if the one you previously submitted is still current.)
Other (Specify)____________
Warnings:
There are fines and imprisonment—$10,000/5years—for anyone who makes false,
fictitious, or fraudulent statements or entries in any matter within the jurisdiction
of the Federal Government (18 U.S.C 1001).
There are fines and imprisonment—$250,000/5years—for anyone who misuses
rents & proceeds in violation of HUD regulations relative to this project. This
applies when the mortgage note is in default or when the project is in a nonsurplus
cash position (12 U.S.C 1715z-9).
HUD may seek a “double damages” civil remedy for the use of assets or income
in violation of any Regulatory Agreement or any applicable HUD regulations (12
U.S.C 1715z-4a).
HUD may seek additional civil money penalties to be paid by the mortgagor through
personal funds for : (1) Violation of an agreement with HUD to use nonproject
funds for certain specified purposes as a condition of receiving transfers of physical
assets, flexible subsidy loan, capital improvement loan, modification of mortgage
terms or workout. The penalties could be as much as the HUD Secretary's loss at
foreclosure sale or sale after foreclosure.
(2) Certain specific violations of the Regulatory Agreement, the penalties could
be as much as $25,000 per occurrence (12 U.S.C 1735f-15).
By Project Owner: Name
title
signature
date (mm/dd/yyyy)
HUD Field Office Use Only
The administrator's compensation quoted in Paragraph 1b(2) is:
Approved
Not approved. See attached letter
By Project Manager:Name
title
signature
date (mm/dd/yyyy)
By Supervisory Project Manager/Hub Director: Name
title
signature
date (mm/dd/yyyy)
Previous editions are obsolete
Page 2 of 2
form HUD-9839-C (05/2003)
ref Handbooks 4381.5 & 4571.4
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
___________________________________________________________________________
SPECIAL INSTRUCTIONS FOR PROCESSING RENT INCREASES FOR PROJECTS
THAT USE A COST-BASED RENT FORMULA
These instructions tell how to integrate the four types of management
fees into the rent computation worksheet. They also tell how to process
cost-based rent increases when the fee is held harmless under Section VI of
Chapter 2.
A.Unsubsidized Projects Using Form HUD-92547A Rent Computation Worksheet
for Unsubsidized Programs (dated 3/84)
1.Part I, Line 5 - Management Fee.
Include:
a.Annual yield from any special fees that are not quoted as a
percentage of collections.
b.Any residential fee YIELD that was capped under the hold
harmless provisions of Paragraph 2-34. Use the following
fomula to determine the annual capped yield.
Annual Capped
Management Fee Yield = Fee Yield
Capped PUPM
X 12 X
Units
No. of
2.Part II, Section I - Annual Income from Other Sources. Subtract
the MISCELLANEOUS income management fee YIELD from each type of
income listed on which a miscellaneous income fee is collected.
(See Line 3b of Attachment 1 of the Management Certification for
a list of miscellaneous income on which HUD allows a fee to be
taken but on which the agent is NOT collecting a fee.) Show your
calculations on the Rent Computation Worksheet.
EXAMPLE:
I.
Annual Income From Other Sources
(Except Income from Commercial Space)
1. Parking
2. Laundry
3. Other
4. Total
$20,000 - (6% x $20,000) = $20,000 - $1,200 = $18,800
5,000 - (6% x $5,000) = $5,000 - $300
=
4,700
10.000*
10,000
________
$35,000
$33,500
*No fee allowed on $10,000 interest income.
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3.Part II, Line K2 - Percentage Management Fee
a.If the residential fee YIELD was capped under Paragraph
2-34, enter 0.
NOTE: The instructions in Paragraph A1b above require the
whole residential fee to be included in Part I, Line 5. You
cannot use a percentage because you do not yet know the rent
potential.
___________________________________________________________________________
Page 1 of 2
4381.5 REV-2
APPENDIX 4
___________________________________________________________________________
C.Non-Profit 221(d)(3) Rent Supplement and BMIR Projects Using Form
HUD-92457, Rent Computation Form (dated 6/72)
1.General
a.Following Paragraphs B1 and 2 above.
b.Use the rent fomula in Appendix 1 of Chapter 4, Section 3 of
HUD Handbook 4350.1, SUPP-1, instead of the rent fomula on
the back of the Form HUD-92457.
2.Rent Formula
a.Lines 5b and c.
b.Line 6.
Do NOT use these lines.
Enter the sum of Lines 4 and 5a.
c.Line 7a. Enter the residential management fee percentage
according to the instructions in Paragraph B4 above.
D.Limited-Distribution 221(d)(3) Rent Supplement and BMIR Projects Using
Form HUD-92457, Rent Computation Form (dated 6/72)
1.General
a.Follow Paragraphs B1 and 2 above.
b.Use the rent fomula in Appendix 2 of Chapter 4, Section 3 of
HUD Handbook 4350.1, instead of the rent formula on the back
of the Form HUD-92457.
2.Rent Formula
a.Lines 6b and c.
b.Line 7.
Do NOT use these lines.
Enter the sum of Lines 4, 5 and 6a.
c.Line 8a. Enter the residential management fee percentage
according to the instructions in Paragraph B4 above.
E.236 Projects Using Form HUD-92457, Rent Computation Form (dated 6/72)
1.General
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a.Follow Paragraphs B1 and 2 above.
b.Use the rent formula in Appendix 3 of Chapter 4, Section 3
of HUD Handbook 4350.1, instead of the rent formula on the
back of the Form HUD-92457.
___________________________________________________________________________
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Instructions ffor
or Completing
Management Reviews of
Multifamily Projects
U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval No. 2502-0178 (exp. 09/30/2008)
Public reporting burden for this collection of information is estimated to average 4 hours per response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Officer,
Paperwork Reduction Project (2502-0178), Office of Information Technology, U.S. Department of Housing and Urban Development, Washington, D.C. 204103600. This agency may not collect this information, and you are not required to complete this form, unless it displays a currently valid OMB control number.
Do not send this form to the above address.
The information is used by HUD to evaluate the quality of project management; determine the causes of project problems; and devise collective actions to
stabilize projects and prevent defaults. The information is gathered and recorded during an on-site review of project operations. The Worksheet provides a
checklist of items to be reviewed and evaluated. This information is required under 24 CFR 207.19(f)(4), 24 CFR 207.19(f)(5)(v) and 24 CFR 219.110. If this
information is not collected there would be more defaults on insured loans and consequently greater losses to HUD’s insurance funds. HUD does not ensure
confidentiality to respondents.
Detailed instructions are contained in Chapter 6 of HUD Handbook 4350.1. Form HUD-9834 shall be used for all on-site management
reviews. Limited management reviews require completion of those line items of form HUD-9834, Summary Sheet, that are shaded. The
Loan Management Branch Chief determines the method for gathering this information. All categories of the form HUD-9834 shall be used
for all comprehensive management reviews.
b. For each of the six major categories (Lines I, II, III, IV, V & VI)
indicate your assessment of the appropriateness and effectiveness of the owner's/agent's management operation. On line
VII indicate your assessment of the owner's/agent's overall
operation. Consider the condition of the project at the time
owner/agent assumed responsibility for project operations.
c. On page 3 of the form, thoroughly explain the facts and
reasoning underyling any unsatisfactory or below average
rating.
d. Mail report with an appropriate cover letter. If manager was
rated below average or unsatisfactory, management must be
afforded an opportunity to appeal the rating before the report
is distributed to Headquarters.
e. Guidance on appeal procedures is provided in Section 2.6. of
Chapter 6 of the Handbook 4350.1.
A. Prior to On-Site Visit
1. The realty/loan technician should thoroughly review the project
file, answer the questions on Form HUD-9834 marked with an
asterisk (*) and alert the realty/loan specialist to any imminent or
existing problems.
2. The realty/loan specialist should:
a. Review the form HUD-9834 questions completed by the
realty/loan technician; the most recent physical inspection,
annual financial report, and occupancy review; and other
relevant file documents. This review will help the realty/loan
specialist to identify potential problem areas on which the
review should focus and to determine if other HUD staff (e.g.,
the Financial or Occupancy Specialist) should participate in
the on-site visit.
b. Call the owner/agent to set up a date for the on-site review.
Confirm the review date in writing. The owner/agent should
be given at least a two-week notice.
B. On-Site Visit
1. Complete all questions on form HUD-9834. Document other
significant observations.
2. Double check information and answers completed in the HUD
Field Office prior to the on-site review.
3. After you have answered all of the HUD-9834 questions, hold a
close-out session with the owner/agent. Discuss your observations and conclusions. Let the owner/agent explain his/her opinion of the cause of the problems and suggest recommendations
for correction and target completion dates (TCD).
C. After On-Site Visit
1. Complete the Management Review Report Summary Sheet,
form HUD-9834, as follows:
a. For each of the 45 management tasks, indicate whether
existing conditions and operating procedures are acceptable
or whether corrective action or improvement is needed (see
codes on top of form). For each line item on which action is
needed, a statement of deficiencies, recommended or required corrective action and target completion date (TCD)
must be completed on the bottom half of the form.
2. Distribute the completed forms as follows:
a. Page 2 (Summary Sheet) and Page 3: Send the originals to the
project owner and copies to:
(1) Management Agent (gets original on HUD-owned projects)
(2) Project file
(3) Mortgagee
(4) When management is rated below average or unsatisfactory and after the appeals or time frame for the appeals has
expired, send copy of the HUD-9834 Summary Sheet and
owner's/agent's response to:
(a) Headquarters, Office of Multifamily Housing Management, to the attention of the Office Director having
management responsibility for the project.
(If the owner/agent does not submit a response within
thirty (30) days of the date of the Management Review
Report, then submit the form HUD-9834 and conduct
follow up activities to secure response and submit the
owner's response when received.)
(b) Director, Participation and Compliance Division, HUD
Headquarters.
(5) Management Agent's file, if maintained.
b. Form HUD-9834. File in project file.
3. Conduct follow-up action to verify whether required actions
have been completed. Enter date correction was verified in righthand column of Page 3 of the form HUD-9834.
Page 1 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Management Review
Summary Sheet
U.S. Department of Housing
and Urban Development
Office of Housing
OMB Approval No. 2502-0178 (09/30/2008)
For each item reviewed, mark a block in column A (acceptable), M (management to correct within 1 yr.), or I (items requiring immediate action).
After discussing items with owner or management agent, enter the estimated completion date in the TCD (Target Completion Date) column.
Project Number:
Section of the Act:
Project Status :
Insured
MIP
Name of Owner :
Purpose of Report :
HUD-Held
Non-Insured
HUD-Owned
Date of Report :
Type of Project :
Limited Review
Comprehensive Review
No. of Units Inspected :
Date of Inspection :
Subsidized
Unsubsidized
Project Status :
Name of Management Agent :
Current Under Mortgage
Delinquent Under Mortgage
Current under Workout/Modification
Delinquent under Workout/Modification
Foreclosure in Process
Management Term (mm/dd/yy):
Report Based on :
thru
HUD Occupancy Review Date :
On-Site Interview with :
HUD Physical Inspection Date :
Visited Agent's Office with :
Name of Resident Manager :
Project Name & Address :
Date Hired :
A. Maintenance & Security
A M I
TCD
28. Tenant Files and Records
III. Leasing and Occupancy Rating
1. General Physical Condition
2. Work Scheduling
Superior
3. Preventive Maintenance
Unsatisfactory
Satisfactory
D. Tenant/Management Relations
4. Unit Inspections
5. Vacant Unit Preparation
29. Tenant Participation
6. Equipment and Inventory Controls
30. Provision of Tenant Services
7. Procurement and Supply Practices
31. Use of Community Space
I. Maintenance and Security Rating
Superior
Satisfactory
E. Drug-Free Housing Policy
Unsatisfactory
A M I
TCD
10. Accounting and Bookkeeping
TCD
A M
TCD
33. Uniform, Written Tenant Selection Plans That
Aid And Support Drug-Free Housing.
12. Cash Controls
34. House Rules That Aid And Support Drug-Free
Housing.
13. Cost Controls
35. Evidence of Drug Use/Sales at Project Address.
14. Submission of Reports
36. Overall Project Plan For Drug-Free Housing.
15. Financial Compliance
37. Project Owner/Agent is A Member of Local
Drug-Free Housing Task Force (if formed).
11. Budget Management
16. Rental Collection
V.
17. Fee Collection Practices
18. Accounts Receivable/Payable
Drug-Free Housing Policy Rating
Superior
Satisfactory
Below Average
Unsatisfactory
19. Reserves and Escrows
II. Financial Management Rating
Satisfactory
A M I
Below Average
Unsatisfactory
Below Average
B. Financial Management
Superior
TCD
IV. Tenant/Management Relations Ratings
9. Energy Conservation
Satisfactory
A M I
32. Tenant Satisfaction
8. Security Program
Superior
Below Average
F. General Management Practices
39. Organization and Supervision
Unsatisfactory
C. Leasing & Occupancy
A M I
TCD
40. Staffing and Personnel Practices
20. Tenant Selection and Orientation
41. Operating Procedures and Manuals
21. Vacancy and Turnover
42. Training
22. Leases and Deposits
43. Office Administration
23. Rent Schedule Compliance
44. Insurance and Bonding
24. Application Processing
25. Recertification System
45. Management Plan and Agreement
VI. General Management Practices Rating
26. Monthly Vouchers
Superior
27. Eviction Procedures
Unsatisfactory
VII. Rating of Overall Management Operation (mark applicable box):
Signature, Name & Title of Person Preparing this Report &Date :
I
38. Owner Participation
Below Average
Superior
Satisfactory
Satisfactory
Below Average
Below Average
Unsatisfactory
Signature, Name & Title of Person Approving this Report & Date :
Page 2 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
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Item
No.
For each 'M' and 'I' item checked, describe findings and give recommendation for correction. Explain any
“Below Average” or “Unsatisfactory” rating. Use photocopies of page 3 as Continuation Sheets, if necessary.
Page 3 of 20
Date Completion
Verified
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Management Review
Questionnaire
Part A: Maintenance and Security Review most recent physical inspection report before responding to the items below. Check to see if corrections
requested in the report have been made. If the report indicated serious problems or if the inspection was made more than 9 months ago, you should request the
HUD Maintenance Engineering Staff to complete a new Physical Inspection Report in conjunction with this review.
N/A
Yes
No
Remarks
1. General Physical Condition
a. Are grounds and landscaping in acceptable condition?
b. Are exterior painted surfaces such as stairs, railings, decks, porches,
windows, doors, etc. free from cracking, scaling, chipping, peeling or loose
paint?
c. Is the project generally free of broken windows, broken light globes or
seriously damaged exterior doors?
d. Are hallways, stairways, elevators, laundry rooms, garbage areas and other
public areas clean?
e. Is playground equipment in safe and acceptable condition?
f. Is the project free of obvious fire/safety/health hazards or housing code
violations?
g. Is project free of lead-based paint contamination on surfaces exposed to
children?
Note: An obvious health hazard related to lead-based paint would be
deteriorated paint conditions on the interior walls and woodworks and exterior
painted surfaces.
h. Have repairs or corrections called for on last annual physical inspection been
satisfactorily completed?
i. Have all latent defects been corrected? If not, list depository and amount of
any construction escrows remaining. ___________________
_________________________________________________________
2. Work Scheduling
a. Are maintenance and janitorial employees provided with written schedules
for routine work (i.e., mowing lawns, cleaning trash areas, etc.)?
b. Are emergency items given priority and acted upon quickly? Maintenance
program can best be described as (check one):
Preventive
Corrective
Deferred
c. Is emergency maintenance service available after regular working hours?
d. Are purchase orders and work orders required of maintenance staff?
e. Does management have a system for receiving, assigning, completing and
billing work orders and for establishing work priorities?
Avg. no. requests received per day __________
Avg. response time __________
Current backlog __________
3. Preventive Maintenance
a. Is there a schedule for preventive maintenance/servicing of all items listed
below? Check schedules in use and indicate in parentheses whether
servicing is done by on-site staff (o) or by contractor (c).
Heating and A/C Equipment (
Hot Water Heaters (
)
)
Cleaning Carpets and Drapes (
Inspect Roof and Fascias (
Major Appliances (
Elevators (
)
)
)
)
Motor Vehicles (
)
Page 4 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
b. Are exterminator services provided regularly as necessary? Are tenants
properly notified?
c. Are sewer lines and roof gutters and downspouts cleaned periodically?
d. Are lawns and plants fertilized and trimmed at appropriate time of year?
e. Is recreational equipment serviced/stored as seasonal changes dictate?
f. Are exterior windows cleaned on regular basis?
g. Is there a schedule for exterior painting? Is it followed?
4. Unit Inspections (Inspect at least 2 occupied and 2 vacant units selected at
random.)
a. In the case of long-term tenants:
1)
are units inspected on a regular basis?
2)
are units redecorated on a regular basis?
3)
is there a written schedule for the inspections and redecorating?
b. In the case of vacant units:
1)
are move-in and move-out inspection forms used?
2)
is there a system for billing tenants for damages?
3)
is charge back to tenants for damages itemized in writing? Do
charges to tenants appear reasonable?
c. Is the condition of units inspected satisfactory? How many units were
inspected? ____________________
5. Vacant Unit Preparation
a. Does management have a system to monitor timely preparation of vacancies
for rental?
Average preparation time for vacated units is __________ days.
Number of vacant units requiring substantial rehab is __________.
b. Is preparation of vacant units free from delays due to:
1)
lack of funds?
2)
insufficient supply of parts maintained at project site?
3)
use of contractor instead of on-site staff, or vice versa?
6. Equipment and Inventory Controls
a. Is maintenance work area and storage space adequate?
b. Is there a satisfactory inventory system for accounting for tools, equipment,
supplies and keys?
c. Is a list of equipment and appliance serial numbers maintained?
d. Are equipment and tools adequate to perform maintenance tasks?
e. Is a copy of the project's as-built drawings on-site?
7. Procurement and Supply Practices
a. Does the project maintain a list/file of vendors who sell services or products
to the project?
b. Is an adequate amount of supplies kept on hand at all times?
c. Is there evidence that the project has shopped around and compared prices
to obtain supplies and services at the most favorable terms available?
d. Are copies of maintenance and/or service contracts available for review?
Page 5 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
e. Does the project maintain a list/card file on outside contractors? Check
services currently contracted with outside contractors and identify name of
contractor and annual amount of contract.
Service
Name of
Contractor
Annual
Contract
Amount
Elevator
________________________
$_______
Exterminating
________________________
_______
Apartment Cleaning
________________________
_______
Heating and A/C
________________________
_______
Plumbing
________________________
_______
Security
________________________
_______
Trash Collection
________________________
_______
Decorating
________________________
_______
Grounds
________________________
_______
Other
________________________
_______
(*Indicate (by asterisk) whether there is an identity-of-interest relationship
between the contractor and the owner or agent.)
f. Is information on pricing of goods and services from identity-of-interest firms
and/or central service units reviewed for the propriety of such transactions
and the reasonableness of the resulting charges to the project?
g. Do records indicate that management has:
1)
inspected contractor's work before authorizing payment?
2)
pursued corrections needed?
8. Security Program
a. Is exterior lighting adequate for protection and visual security?
b. Is the project free of major security problems? If not, check problem areas.
Break-ins
Vandalism
Auto Theft
Personal Assault
Other
c. Check type(s) of security service available.
Tenant patrol
Volunteer organization patrol (e.g. Guardian Angels)
Paid car patrol
Paid on-site guard
Police Department car patrols in excess of normal for area
d. Is type and level of security service appropriate for this project:
e. Review of police reports for project address:
Violent Crime Arrests
Non-citizen Ineligible Aliens
Drug Activity
Page 6 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
9. Energy Conservation
a. Has the project complied with the provisions of the Natural Gas Pipeline
Safety Act (e.g., cathodic protection, etc.)?
b. Has the owner/agent compared the utility rate schedules to assure that the
most economic rate schedule is used?
c. Has management attempted to reduce energy consumption? Check measures undertaken.
Caulking and weatherstripping
Storm doors and windows
Watersaver devices
Extra insulation
Conversion to individual metering
Consumer education
Other (specify) _________________________________________
_____________________________________________________
d. Is there a current HUD-approved Energy Conservation Plan?
e. Are the improvements being implemented in accordance with the approved
plan?
I. Maintenance and Security Rating
Superior
Satisfactory
Below Average
Unsatisfactory
Part B—Financial Management (This section will assist HUD staff in evaluating the mortgagor's system of financial and accounting controls, as well as the
mortgagor's compliance with HUD financial reporting requirements. If some or all of the following questions have been covered in the Audit Compliance and Internal
Control Questionnaire portion of the IPA Audit, Appendix 2 of Handbook IG 4372.1, the finding of that audit should be presented below as appropriate and no further
analysis of those areas is required. If, however, the auditor's unqualified certification concerning some or all of these questions is not available, additional review will
be necessary to respond to these items.
When possible, questions should be addressed to the individual responsible for the functions under review. A thorough review of all financial reports in the HUD office,
including an analysis of the latest annual audited statement, should be completed prior to the field visit.)
N/A
Yes
No
Remarks
10. Accounting and Bookkeeping
a. Are books and records maintained as required by HUD Handbook 4371.1
(Chapter 4)? Check books of accounts maintained. Indicate where books
may be examined: O - owner's office; A - agent's office; P - project site.
General Ledger (
)
Rent Receivable Ledger (
General Journal (
)
)
Cash Receipts Journal (
)
Cash Disbursements Journal (
Accounts Payable Journal (
)
)
b. Are rental receipts deposited in the name of the project in a federally insured
account? If trust account is used for disbursements, are only HUD-insured
projects in the pool and is the project's balance transferred to the project
account at least once monthly?
c. Are operating funds, security deposits, reserve funds, and flexible subsidy
funds maintained in separate accounts and properly secured for authorized
use?
Page 7 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
d. Does the mortgagor make frequent postings (at least monthly) to the ledger
accounts?
e. Is owner adhering to HUD-approved repayment Plan? (i.e. loan from reserve
for replacement, 236 excess income, capital improvement loan, etc.)
11. Budget Management
a. Is an operating budget prepared annually and is it approved by the owner?
If yes, obtain copy of current year's budget.
b. Is current budget on site and used by staff to monitor and control operating
expenses?
c. Are monthly or quarterly reports prepared indicating variances between
actual income and expenses and budgeted income and expenses?
* d. Are rent increase requests submitted to HUD promptly when needed?
12. Cash Controls
a. Are collections deposited on the day received or, pending deposit, are they
properly controlled?
b. Are there adequate controls over cash accepted? Check controls used.
Prenumbered rent receipts
Bank collections
Safe
Lock Box
c. Do different persons handle bank deposits and accounts receivable, or is an
alternative safeguard in effect?
d. Are all disbursement checks prenumbered, properly identified with account
numbers and supported by vouchers or invoices? Is the supply of unused
checks adequately safeguarded and under the custody of persons who do
not sign checks manually, control the use of facsimile signature plates, or
operate the facsimile signature machine?
e. Are funds (i.e., receipts, disbursements, petty cash, etc.) periodically
checked on a surprise basis by a responsible official (other than on-site
employees)?
f. Are bank statements reconciled promptly upon receipt by someone other
than check signer and by one who has no cash receipt or disbursement
function?
13. Cost Controls
a. Does owner/agent solicit bids (formal or informal) in order to obtain materials,
supplies, and services on most advantageous terms to project? If yes, give
recent example: ___________________________________
b. Are bills (including mortgage payment) paid in sufficient time to avoid late
penalties?
c. Are vendor bills paid in time to obtain maximum trade discounts?
d. Are operating expenses (including taxes and utilities) periodically reviewed
to assure that project is paying the lowest possible rate? Identify any efforts
by owner/agent taken to reduce expenses/effect cost savings.
_________________________________________________________
_________________________________________________________
_________________________________________________________
*e. Do project operating expenses appear reasonable compared with similar
projects? Indicate latest MIPS rating and check problem areas flagged by
MIPS.
Administrative
Maintenance
Taxes & Insurance
Financial
Utility
Page 8 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
14. Submission of Reports
*a. Have the following financial reports been submitted on a timely basis and in
acceptable form?
1)
Annual Audited Financial Statement
Date last report was due _____/_____/_____
Date last report received _____/_____/_____
2)
Monthly Accounting Report (93479, 80, 81)
3)
Excess Income Report (HUD 93104) (Section 236 only)
4)
Quarterly performance report for projects on flexible subsidy, modification, workout, etc. (9813c)
5)
Annual operating budget (cooperatives)
b. Does agent/owner contact CPA early enough to enable CPA to prepare
report within 60 days of close of fiscal year?
*c. Does agent generally provide sufficient documentation for rent increases?
15. Financial Compliance and Condition
*a. Has all excess income due HUD been submitted? On Section 236 projects,
excess collections are to be calculated on HUD 93104 and sent to HUD
monthly. On 221(d)(3) BMIR projects, excess rental collections are to be
deposited in the residual receipts account with the mortgagee within 60 days
after close of fiscal year.
*b. Have all required deposits to the residual receipts fund been made?
*c. If the owner/agent has taken unauthorized distributions, reimbursements or
supervision fees, have these been repaid? If no, indicate amount due project.
__________________________
*d. Is management fee paid to agent in accordance with time schedule and
amount specified in management certification? If not, enter:
Fee per agreement $_______________ (
Fee Paid $_______________ (
%)
%)
*e. Is agent charging project for expenses which the agreement requires agent
to pay?
f. Has owner corrected all findings on HUD audits or on the annual review? List
findings outstanding.
_________________________________________________________
_________________________________________________________
_________________________________________________________
*g. Does annual financial analysis or MIPS printout indicate that project is free
of actual or incipient financial problem? For each of last 3 years, enter annual
cash flow or deficit before depreciation:
19________
$_______________________
19________
$_______________________
19________
$_______________________
h. Is current HUD-approved rent schedule sufficient to meet project needs?
*i. Does balance in security deposit trust account equal or exceed liability? If
not, explain how deficit will be funded:
_________________________________________________________
j. If security deposits are invested in an interest-bearing account, is interest
passed through to tenants or transferred to project account?
*k. Complete the following as of end of last month (_____/_____/_____)
Cash $__________
Accounts Receivable $_________________
Accounts Payable $___________________
Page 9 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
16. Rental Collection Practices
a. Is there a written rental collection policy?
Late charge of $____________ on ____________ day.
Delinquent notices sent on days ____________, ____________,
____________.
Eviction procedures commence on ____________ day.
Referred to collection agent on ____________ day.
b. Does rent collection policy in effect reflect that stated in approved management plan?
c. Does rent collection policy appear to be uniformly applied? (Check rent
collection cards on a sample of tenants at various stages of delinquency.)
d. Is an aged tenant delinquency report prepared monthly?
1)
During an average month, how many tenants have not paid their rent by
the tenth of the month? _________________________________
2)
During an average month, how many tenants have not paid their rent by
the end of the month? __________________________________
17. Fee Collection Practices (Those fees that are collected separately from
rent that should be reflected in lease and house rules.)
a. Mandatory meals
b. Pets
18. Accounts Receivable/Payable
a. Are tenant accounts receivable within acceptable limits? Amount of receivables in No. 15K is _______% of monthly rents due from tenants. Of this
amount, $____________________ is more than 30 days past due.
b. Does procedure for write-off of bad debts appear reasonable?
c. Has annual “write-off of tenants' accounts receivable for the last two fiscal
years been less than 1% of gross rents due from tenants?
Tenant delinquent accounts written off last 12 months equals
$____________________.
d. Are accounts payable reasonably current? Indicate amount of accounts
payable more than 60 days old: $____________________
19. Reserves and Escrows
a. Complete chart below.
As of _____/_____/_____
Name of Reserve
Replacement Reserve
Total
$
Monthly
Deposit
Per Unit
$
Held in
Interest-Bearing
Account?
Yes/No
$
Gen. Operating Res. (Co-ops)
Residual Receipts
Other
b. Do the balances in replacement or general operating reserve accounts
appear adequate to meet future needs? If not, what action is recommended?
_________________________________________________________
*c. Have monthly deposits to these reserves been increased since the project
was completed?
Page 10 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
d. Has mortgagor/HUD performed analysis to determine future Replacement
Reserve needs?
e. Is only one account (i.e., the appropriate reserve or operating expense
account) being billed for repairs that are eligible for reimbursement from the
reserves?
II. Financial Management Rating
Superior
Satisfactory
Below Average
Unsatisfactory
Part C—Leasing and Occupancy (The responses to some of the items in this portion of the review may have been covered in a previous HUD Occupancy Review
or in the Audit Compliance and Internal Control Questionnaire portion of the IPA Audit, Appendix 2 to Handbook IG 4372.1, Audit Guide for Mortgagors Having HUD
Insured or Secretary Held Multifamily Mortgages for Use by Independent Public Accountants. If both the report and the Audit Questionnaire indicated satisfactory
performance, a spot check of tenant files and some of these items may suffice. If however, an on-site, in-depth occupancy review has not been completed within the
past 9 months or if there has been a turnover in on-site staff since the last review, perform a full occupancy review in conjunction with this management review. In addition
to interviewing appropriate project staff, also review a reasonable sample (approximately 15%) of the tenant files.)
N/A
Yes
No
Remarks
20. Tenant Selection and Orientation
a. Have written tenant selection procedures been established? If yes, ask to
see a copy. If no, describe procedures for reviewing and approving tenant
applications.
_________________________________________________________
b. Has project implemented tenant preference requirements? Ask to see a
copy of tenant waiting list, or other documentation,if either is available, to
ascertain.
c. Does management check references of applicants? Checks with:
Previous Landlord
Employer
Personal References
Credit Bureau (Cost = $
)
Other ________________________________________________
_____________________________________________________
d. Is affirmative marketing plan on site? Does advertising program reasonably
comply with affirmative marketing plan? Estimate racial mix of current
tenants:
Ethnicity
American Indian or Alaskan Native
_________%
Asian or Pacific Islander
_________%
Black
_________%
Hispanic
_________%
White
_________%
e. Has any local authority or project owner received complaints of prohibited
discrimination? (e.g., based on race, age, sex, handicap, familial status)
f. If an applicant is rejected, does management provide the applicant with an
explanation for the rejection? Is the explanation written?
g. Are new tenants given informational handbooks or manuals?
Page 11 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
h. Does project staff personally interview new tenants and provide orientation
to the project? Check topics covered.
Project Rules
Lease Terms
Maintenance Request Procedures
Explanation of Appliances
Location of Shopping, Schools, Transportation, Community Services,
etc.
Grievance Procedure
Security Deposit and Charge Backs
Rent Payment Procedure
Energy Conservation
Subsidy Policies and Rules
i. Do project staff and new tenant jointly inspect unit prior to occupancy?
21. Vacancy and Turnover
a. Is the vacancy rate satisfactory and not excessive? List month-end vacancies for last 6 months.
Month
___ ___ ___ ___ ___ ___
No. Vacant ___ ___ ___ ___ ___ ___
Total
Avg.
__________
__________
No. Vacant Today __________(%)
No. Ready for Occupancy __________
Avg. Length of Vacancy = __________ days
b. Is vacancy percent in 21a above less than vacancy factor used in last rent
increase approval? Used __________%.
c. Is project free from vacancy problems due to any of the following factors? If
not, check the factors contributing to vacancies.
Security Problem
Non-competitive Amenities
Inadequate Marketing
Project Reputation
Bedroom Mix/Size (__________ bdrm hard to rent)
Poor Maintenance
Rents too High
Location
Lack of Demand
Tenant/Management Relations
d. Is advertising program in use appropriate? Check type of ads used and enter
cost/month.
Newspaper ($__________/Mo.)
Radio ($__________/Mo.)
Contacts with community groups ($__________/Mo.)
Other (Specify) _________________________________________
e. Does the project maintain a waiting list of prospective tenants? Is the list
updated regularly? How many are now on list? __________
Page 12 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
f. Has the project had a significant turnover problem? Indicate number of units
becoming vacant during the last six months.
Month
___ ___ ___ ___ ___ ___
No. of Units ___ ___ ___ ___ ___ ___
Total
Avg.
_______ _______ (___%)
22. Leases and Deposits
*a. On subsidized projects, is HUD model lease used? If not, has lease in use
been approved by HUD? On non-subsidized projects, does lease meet HUD
requirements?
b. If necessary, are the HUD approved lease and/or the owner's/agent's rules
and regulations available to project tenants in foreign language version?
c. In Section 236 projects with tenant paid utilities, is the model lease being used
in compliance with the provisions of Chapter 4, Section 5 of Handbook 4350.1
with respect to tenant paid utilities? Check to assure regulatory agreement
has also been amended.
d. Is amount of security deposit within limits set for this HUD program?
e. Are the security deposit and first month's rent the only charges made when
applicant is accepted for occupancy? List other charges and amounts.
Type
Amount
_______________________________
$_______________
_______________________________
$_______________
f. Has the project implemented the pet rule (elderly only) requirement?
g. Obtain copy of pet policy to ascertain if the pet policy and amount of pet
deposit is reasonable?
h. Has the Pet policy (elderly only) been incorporated into the lease?
23. Rent Schedule Compliance
*a. Is a HUD-approved Rent Schedule (HUD-92458) on file? List and compare
*
the rental charges.
Rent
Used
Form HUD-92458
Rent
Rent
Used
Form HUD-92458
Rent
_______ Bedroom
$ _________
$ _________
_______ Bedroom
$ _________
$ _________
_______ Bedroom
_________
_________
_______ Bedroom
_________
_________
_______ Bedroom
_________
_________
_______ Bedroom
_________
_________
_______ Bedroom
_________
_________
_______ Bedroom
_________
_________
b. In non-subsidized projects, is the gross potential income from apartments
equal to or less than rents approved on the latest Form HUD-92458?
c. In Section 221(d)(3) projects, is the rent for each dwelling unit at or below the
upper limit of the approved rent range shown on the latest Form HUD-92458?
d. In Section 236 projects, are Basic Rents and Market Rents the same as
shown on the latest Form HUD-92458?
e. In project receiving Section 8 assistance, are rents charged for Section 8
units the same as rents charged for all similar units in the project?
f. Are charges for equipment and services included in the rent the same as
shown on the latest Form HUD-92458? Do these charges equal or exceed
management's cost for providing these services and equipment?
g. Is the other income-producing space in the project rented at or above the
rates shown on the latest Form HUD-92458?
Page 13 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
h. Are the number of non-revenue producing dwelling spaces at the project the
same as shown on the latest Form HUD-92458?
24. Application Processing
a. Are proper income limits used?
b. Are income, assets (if applicable) and medical and other expenses (child
care allowance, handicapped assistance expenses, elderly household
allowance) independently verified?
c. Is income properly calculated? Are deductions from income properly calculated?
d. Is size of unit reasonably related to size of the family?
e. When tenants are paying their own utilities, have certification/recertification
forms (Form HUD-50059) been revised to reflect utility allowance?
f. Are application forms signed by both the tenant and the owner and sent to
HUD on a timely basis?
g. Are appropriate preference rankings applied to prospective tenants?
25. Recertification System
a. Does management use a tickler system to identify recertifications that are
coming due? Are recertifications completed on or before the anniversary
date?
b. Is request for new verification of income sent to tenant at least 60 days before
the anniversary date?
c. Are tenants notified of any rent change resulting from the recertification prior
to the effective date of the rent change?
26. Monthly Vouchers
*a. Is project utilizing all subsidy units allocated to it? Complete the following
chart. Explain why subsidies are not used.
Secondary Subsidy
Rent Supp.
RAP
LM Sec. 8
Existing Sec. 8
Sec. 23
Flex. Subsidy
Total
(1) No. of Units
Approved
(2) Annual Contract
Amount
$
$
$
$
$
$
$
/yrs.
$
$
$
$
$
$
$
/yrs.
(3) No. of Units Used
Last Month
(4) Estimated Usage
This Year
*b. Are monthly vouchers submitted to HUD on time?
*c. Are billings properly prorated for move-ins and move-outs?
d. Are claims for Section 8 vacancy payments supported by accounting records
and owner recertifications?
e. Does agent monitor monthly subsidy usage and promptly request increases
in contract authority when warranted?
27. Eviction/Termination of Assistance Procedures
a. Does management have a written policy for handling evictions?
b. Are eviction policies and procedures consistent with HUD requirements?
c. When tenants are evicted, are they evicted only with good cause and are they
given adequate notice of the reason for evictions?
Page 14 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
d. Are eviction procedures initiated promptly, when warranted?
1)
Number of evictions completed during last 6 months __________.
2)
Average cost per eviction $_______________.
3)
Eviction handled by:
attorney on staff of owner/agent
attorney on contract
attorney on call
e. Is Legal Services actively involved in evictions at this project?
f. Does eviction procedure comply with that shown in approved management
plan? Describe process used in evicting tenants for causes other than
nonpayment of rent.
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
g. Does management provide written policy on termination of assistance to
tenants (e.g. incorporated into a tenant handbook)?
h. Are these policies consistent with HUD requirements?
i. Number of terminations of assistance incurred over the past year:
_________________________________________________________
28. Tenant Files and Records
a. Are tenant files organized, properly maintained, and secured in a confidential
manner?
b. Do tenant files contain all the necessary forms and documents? Are these
signed by the tenant and the owners, as required? Check items typically
found in files.
Application (signed)
Income Verifications
Lease (signed)
Lease addenda
Security Deposit Receipt
Recertification Form(s)
Unit Inspection
Correspondence, including complaints and requests for service
Other _________________________________________________
c. Is there a chronological record of maintenance inspection and work for each
unit maintained in the project office?
III. Leasing and Occupancy Rating
*a. Occupancy Review Compliance—List deficiencies in occupancy procedures noted in prior occupancy review(s) or elsewhere (e.g. Appendix 2 of
4372.1) which are still outstanding.
Review
Date
Deficiency
Yes
Page 15 of 20
Corrected
No
Action
Needed
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
b. Rating:
Superior
Below Average
Satisfactory
Unsatisfactory
Part D—Tenant/Management Relations (When assessing tenant/management relations, the critical point is whether or not management is aware of and sensitive
to tenants' concerns and is using the optimum resources available to address these concerns. The principal sources of information for completing this section will be
correspondence in the project file, interviews with on-site management staff and, when appropriate, interviews with some residents of the project.)
N/A
Yes
No
Remarks
29. Tenant Participation
a. Is there an active tenant organization at this project?
b. Does the tenant organization appear to represent the majority of the
residents? What tenants appear to be under-represented?
_________________________________________________________
_________________________________________________________
c. Does the tenant organization meet frequently with management? Give
frequency _________________ Date of last meeting _______________
d. Is tenant organization supported by project funds? How much? _______
e. Are there brochures and newsletters available regarding project policies and
activities? Does management encourage tenant input to the newsletter?
f. Is tenant involvement in project operations encouraged? Check areas in
which involvement is encouraged.
Project rules
Redecorating schedule
Use of community space
Energy conservation
Social service program
Security program
g. Have tenants been notified of and given an opportunity to comment upon
proposed rental increases, capital improvements, proposed sale of project,
change of ownership/management agents, and other areas where tenant
notification and comment is required by HUD?
30. Provision of Tenant Services
a. Has management made efforts to determine what community resources and
social services are available to meet tenant needs?
b. Do social services provided by either the project or neighborhood appear
adequate to meet the tenants needs? Check services available and identify
agency providing the service (i.e., CETA; city/county/state; church/school;
community groups, etc.) and any cost to project.
Source
Agency
Cost to
Project
Child Care
________
________
Recreation
________
________
Health Care
________
________
Vocational Training/
Job Placement
________
________
Meals
________
________
Financial Counseling
________
________
Substance Abuse Counseling
________
________
Other (specify)
_______________________
_______________________
________
________
Page 16 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
N/A
Yes
No
Remarks
c. Has management made an effort to employ tenants? If so, describe and
indicate how many tenants have been employed in the past two years.
_________________________________________________________
31. Use of Community Space
a. Is indoor community space adequate and is it in satisfactory condition?
b. Does managing agent plan and use the space effectively?
c. Have written procedures been established for reserving the space (including
a fee schedule, when appropriate)?
d. Is outdoor recreation space adequate and in good condition?
32. Tenant Satisfaction
a. Do residents appear reasonably satisfied with the overall quality of housing
services provided by the project?
Maintenance Services
Security
Social Services
List any areas of dissatisfaction
_________________________________________________________
_________________________________________________________
b. Does management respond promptly to maintenance requests and other
resident complaints?
c. Do project files indicate it is not necessary for tenants to communicate with
HUD to resolve project problems?
d. Does management have an effective method for resolving tenant grievances
and are the tenants aware of it?
IV. Tenant/Management Relations Rating
Superior
Satisfactory
Below Average
Unsatisfactory
Part E—Drug-Free Housing Policy
33. Uniform, Written Tenant Selection Plans That Aid and Support DrugFree Housing.
34. House Rules That Aid and Support Drug-Free Housing.
35. Evidence of Drug Use/Sales at Project Address.
a. Police Reports/Arrest Records
b. Physical Inspection/Paraphernalia
36. Overall Project Plan for Drug-Free Housing
37. Project Owner/Agent is A Member of Local Drug-Free Housing Task
Force (if formed).
V. Drug-Free Housing Policy Rating
Superior
Satisfactory
Below Average
Unsatisfactory
Page 17 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
Part F—General Management Practices (Thoroughly review the management plan and management agreement before completing this Part of the review.
If you determine in Question No. 43a that the management plan does not reflect systems and procedures in use at the project, or if you believe that the systems and
procedures set forth in the plan are not appropriate for the project, in Part I specify deficiencies and recommend revisions to practices/content of the plan.)
N/A
Yes
No
Remarks
38. Owner Participation
a. Is the project owner actively involved in project affairs? If yes, describe.
_________________________________________________________
_________________________________________________________
_________________________________________________________
b. Does management agent submit reports to owner as required by management agreement or plan, if one exists? Check reports required and indicate
frequency. (Obtain copies, if possible.)
Type
Frequency
Cash flow/accounting
________________
Move out/move in
________________
Delinquency
________________
Maintenance
________________
Other (specify)
____________________________
____________________________
________________
c. If project is owned by a cooperative or nonprofit entity, does Board of
Directors meet regularly? How often? ___________________________
d. If project is owned by a cooperative, are minutes prepared?
39. Organization and Supervision
*a. Do management agreement and plan, if they exist, and/or the Management
Entity Profile and Management Certifications, clearly describe the relationships and responsibilities of the owner and the agent? Do on-site staff
understand these relationships?
b. Does owner/agent have a system/procedure for providing field supervision
of on-site personnel?
Name of Field Supervisor(s) __________________________________
_________________________________________________________
Freq. of Visits by Supervisor __________________________________
c. Are lines of supervision between on-site staff and agent's central staff
described in writing and understood by staff?
d. Are duties of on-site staff described in writing (e.g., job description, etc.) and
are they clearly understood by on-site staff?
e. Has the owner/agent established a written personnel policy for employees?
40. Staffing and Personnel Practices
*a. List all staff billed to project account.
Name *
Title
Date
Employed
Hours
per
Week
Monthly Salary or If a free apt, Position
Wage
give
approved in
number of mgmt plan?
bedrooms
Yes / No
*Indicate by asterisk those employees living on site.
Page 18 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
DocuSign Envelope ID: E8105C98-4728-4AB0-8EDC-4E63BB98F1D2
N/A
Yes
No
Remarks
b. Does above staffing reasonably correspond to that submitted in support of
last rent increase?
c. Are the number of skills of staff appropriate for this project?
d. Are staff recruited in accordance with affirmative action and tenant employment goals specified in management plan?
41. Operating Procedures and Manuals
a. Is a copy of the current management plan, if it exists, on-site and available
to staff? If not, answer N/A.
b. Do on-site staff refer to this plan in their day-to-day activities?
c. Is there a procedures manual on site for staff use? (Obtain copy, if available.)
d. Does manual adequately cover HUD requirements?
e. Are HUD manuals, handbooks or other guide materials available on site for
staff use?
42. Training
a. Does owner/agent have a formal ongoing training program for its staff?
Check types of training used.
On Site (Frequency ______________________________)
IREM
HUD Seminars
NCHM
Local Colleges
Other (specify) __________________________________________
b. When on-site staff have questions or concerns, do they know who to call for
assistance? Who do they call? ______________________________
c. Does owner/agent have a system to keep on-site staff informed of changes
in either HUD policies or project operating procedures?
43. On-Site Office Administration
a. Are there signs enabling applicants/tenants to easily locate the office?
b. Is office organized and neat in appearance?
c. Are office hours posted?
d. Are office hours convenient for prospective applicants and tenants?
e. Is rent collection policy posted?
f. Is affirmative fair housing sign posted?
g. Are emergency phone numbers posted?
44. Insurance and Bonding
a. List current insurance coverage and premiums.
Basic
Coverage
Annual
Premium
Property
$ ____________
$ ____________
Liability
$ ____________
$ ____________
b. Is property insurance adequate to cover replacement cost?
c. Has the project been able to obtain property or liability insurance coverage
without any major difficulties? If not, describe problems.
Page 19 of 20
form HUD-9834 (9/91)
ref. Handbooks 4355.1 & 4350.1
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N/A
Yes
No
Remarks
d. Has the owner/agent attempted to obtain lower insurance coverage rates?
If yes, describe.
_________________________________________________________
e. Does the owner/agent have a fidelity bond which is at least equal to potential
collections for two months and which provides coverage for all employees
handling cash? (Obtain copy, if available.)
45. Management Plan and Agreement
a. Have owner and managing agent executed and submitted an appropriate
management certification (Form HUD-9839-A, B, or C) to HUD? Date of
certification _____/_____/_____.
b. Is the agent in compliance with the terms of the management certification?
c. Has a management entity profile been submitted to HUD and is it relevant to
the agent's organization and how it operates? Date of profile
_____/_____/_____
d. Is there an approved management plan relevant to the needs of the project?
e. If a plan exists, is the owner/agent complying with the management plan?
f. Is a management agreement in force? Term of Agreement _____/_____/
_____ thru _____/_____/_____ Management Fee __________%
g. Is the agent in general compliance with the terms of the management
agreement, if one exists?
VI. General Management Practices Rating
Superior
Satisfactory
Below Average
Unsatisfactory
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Physical Inspection Report
See back of page for Public reporting statement
Inspection Date (mm/dd/yyyy)
U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner
Date Report Mailed (mm/dd/yyyy)
Report Prepared By
HUD
Mortgagee (Enter Company Name)
Part A: Basic Data
1. Project Name
3. Agent’s Name
5. FHA Number
Since (mm/dd/yyyy)
6. Mortgagee Number
OMB No. 2502-0369
(Exp. 3/31/2000)
2. Owner’s Name
Since (mm/dd/yyyy)
4. Resident Manager’s Name
Since (mm/dd/yyyy)
7. Number of Units
9. Name & Title of Owner Representative accompanying on Inspection
8. Last Quarter Averages
Total
Monthly Turnover
(Units)
Vacant
Days Vacant/Units
(Days)
(Days)
Unit Ready Time
Part B: Physical Condition. Indicate the physical condition of each item. If maintenance is needed, describe the problem/need in Part E of this report. Mortgagees need not
supply cost estimates. HUD staff need give cost estimates only when such estimates are required by other instructions (e.g., workout or flexible subsidy instructions).
Mainte- Urgency On
Mainte- Urgency On
Prior
Prior
nance
nance
Needed (H/M/L) Report Estimated
Needed (H/M/L) Report Estimated
(Y/N)
(Y/N)
Cost
(Y/N)
(Y/N)
Cost
Exterior Items Inspected
Interior Items Inspected
1. Exterior Walls and Foundations
23. Floors, carpets, tiles
2. Roofs, flashing, vents
24. Stairs, walkways, community spaces
3. Gutters, downspouts, splashblocks
25. Cabinets, doors, closets, hardware
4. Drives, parking lots, paving, curbs
26. Painting
5. Walks, steps, guardrails
27. Curtains and shades
6. Fences, walls, gates
28. Refrigerators and ranges
7. Porches, balconies, fire escapes
29. Garbage disposal and exhaust fans
8. Doors, windows, screens
30. Compactors and incinerators
9. Garage and carports
31. Electrical fixtures and systems
10. Lawns and plantings
32. Plumbing fixtures and systems
11. Sprinkler and drainage system
33. Heating and air conditioning
12. Exterior lighting
34. Hot water system, boiler room
13. Exterior painting
35.
14. Underground gas, water, sewage
Miscellaneous Items Inspected
15. Security systems
36. Benches, play area and equipment
16.
37. Laundry rooms
Energy Efficiency Items Inspected
38. Storage, utility buildings
17. Insulation
39. Elevators
18. Caulking and weather-stripping
40. Project signs and office
19. Storm doors and windows
41. Swimming pools
20. Water saver devices
42. Exterminating
21.
43. Fire Extinguishers
22.
44.
Part C: Miscellaneous Observations. Answer each question. In Part E, describe any problem areas, corrective actions needed, or elaborate on these answers.
1a. Surrounding neighborhood is:
Yes No
5a. Have all repairs required by HUD or the
Depressed
Average
Prosperous
b. This condition is expected to:
mortgagee been completed?
b. If no, is repair work progressing on schedule?
Improve
Stay Same
Decline
Yes No N/A 6a. Have any major physical improvements been
2. Are project signs and access adequate?
made during the last year?
3a. Is preventive maintenance adequate and timely?
b. Are any major physical improvements planned?
b. Are any changes in maintenance procedures needed?
If yes on either a or b, describe in Part E: Comments.
4a. If insurance loss drafts or replacement reserve
funds were released for repairs, have those
7. Is the project experiencing any significant
repairs been completed?
occupancy problems?
b. If no, is repair work progressing on schedule?
Previous editions are obsolete.
Replaces form HUD-9822-A.
Original to Project Owner, One Copy each to Field Office and Mortgage.
Page 1 of 2
N/A
Form HUD-9822 (1/90)
ref. Handbook 4350.1
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Part D: Evaluation. Important: In Part E, explain the basis for any below average or unsatisfactory rating.
1.Overall Physical Condition
2. Maintenance Policies and Practices
Superior
Satisfactory
Below Average
Unsatisfactory
Superior
Satisfactory
Below Average
Unsatisfactory
Part E. Comments. Cross reference each comment to a line item in Part B, C, or D of this report. Attach additional sheets, if needed.
Part, Line
Reference
Part F: Signatures
1. Inspection made by
1a. Title
Date Closed
(mm/dd/yyyy)
2. Inspection approved by
1b. Date (mm/dd/yyyy)
2a. Title
2b. Date (mm/dd/yyyy)
Pursuant to 24 CFR Part 207.260(a) this information is collected annually
Public reporting burden for this collection of information is estimated to
to ascertain the physical condition of a mortgaged property. This is
average 2 hours per response, including the time for reviewing
necessary for project owners to receive approvals for funding actions such
instructions, searching existing data sources, gathering and maintaining
as subsidy requests.
the data needed, and completing and reviewing the collection of
This information is non-sensitive and no assurances of confidentiality is
information.
given.
Previous editions are obsolete.
Original to Project Owner, One Copy each to Field Office and Mortgage.
Form HUD-9822 (1/90)
Replaces form HUD-9822-A.
Page 2 of 2
ref. Handbook 4350.1
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Appendix 7
FACT SHEET
Neighborhood
Networks
The U.S. Department of Housing and Urban Development (HUD)
recognizes that computer literacy and access are prerequisites
for economic opportunity in the information age. Therefore in
September of 1995, HUD's Office of Multifamily Housing launched
Neighborhood Networks, a community-based initiative that
establishes computerized learning centers in insured and assisted
housing.
A Bottom-Up Approach to Community Development
Neighborhood Networks takes a bottom-up, individualized approach
to community development. All insured and assisted multifamily
developments--other than nursing homes--are eligible to
participate. Property owners and housing residents are
encouraged to form partnerships with members of their community
to develop and sustain a center that best suits their own needs.
The types of programs and services offered at a Neighborhood
Networks Center could include the following:
o
o
o
o
o
o
o
typing, word processing, and computer training
general education and job training
access to job data banks
access to information on health and community resources
access to potential collaborators and clients in the
development of micro enterprises
social awareness and integration
participation in online civic and government forums
Interested property owners should submit a business plan to the
asset management branch of the local HUD field office in whose
jurisdiction the property is located. The plan must describe the
types of programs proposed, how residents will be involved in the
planning, what community partnerships have been formed to support
the center, and how the center will be funded.
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Local Support Vital to Success
Neighborhood Networks is not a grant program, so local support is
vital. To ensure the success of the center, local businesses,
government, educational institutions, private foundations, and
other community organizations are needed to donate computers and
software and provide capital funding.
In addition to community resources, property owners may use funds
from their residual receipts accounts and reserve for
replacements accounts to the extent that these funds are not
required to meet the anticipated needs of the property. They may
also borrow funds from financial institutions as long as the loan
is not secured by the property. In limited circumstances, HUD
may fund part or all of the costs from rent increases. Resources
from related grants within HUD (Public and Indian Housing, Crime
Prevention and Security Division) and outside of HUD (Department
of Education, Commerce, and Justice and nonprofits like
Youthlink) also may be available. Funds for developing a
Neighborhood Networks Center may be used for the following:
o
o
o
o
o
o
computer hardware and software
wiring and servers
minor renovations to the center
staffing/trainers
security
maintenance and insurance
An Initiative Whose Time Has Come
Many factors have converged to make Neighborhood Networks a
timely initiative. Currently, HUD insures and/or assists about
19,000 privately owned multifamily developments that provide
homes for more than two and one-half million households. But the
present system of federal policy will affect housing residents
and property owners alike. For residents eligible to receive
housing vouchers, changes in federal policy will create a new
freedom of choice in housing location. Owners, in turn, will be
challenged to create amenities in their developments to reduce
federal resources and will need to increase their personal
income. All of these factors make Neighborhood Networks an
initiative whose time has come.
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For Further Information
Specific information on Neighborhood Networks is contained in
Chapter 9 of Handbook 4381.5 Rev 2 Change 2. For further
information on starting a Neighborhood Networks Center, call the
Asset Management Branch of the local HUD field office nearest you
or contact:
U.S. Department of Housing and Urban Development
Neighborhood Networks
9300 Lee Highway
Fairfax, VA 22031
Telephone: 1-888-312-2743(toll-free number)
Fax: (703) 934-3156
e-mail: mail@neighborhoodnetworks.orgi
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APPENDIX 8
CITIZEN'S EDUCATION FUND
SAMPLE PLEDGE FORM
(CHILD)
I,________________, agree to study my homework nightly;
drugs, guns and violence at school and at home; respect
parents, willingly accept the offered help of teachers,
be willing to seek out appropriate help with schoolwork
necessary.
avoid
my
and also
as
___________________________
Signature
___________________________
Printed name
___________________
Witness
___________________________
Address
______________________________________________________________________________
(PARENT)
I, _____________________, pledge to support good study habits for
my children __________________________,
____________________________, and _______________ and will
provide a quiet place for them to study. I agree to ensure they
attend school regularly, exchange telephone numbers with my
children's teachers, and discuss their report cards with them and
their teachers, and get my children assistance with homework if
needed. Finally, also agree to oppose drugs, guns and violence
in both the school and my neighborhood.
___________________________
Signature
___________________________
Printed name
__________________________
Witness
___________________________
Address
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APPENDIX 9
Model By-Laws
BY-LAWS OF ____________________________________________________
RESIDENT
ORGANIZATION
A Nonprofit Corporation
ARTICLE I: NAME
The name of the organization shall be
_____________________________________ Resident Organization [give
exact and complete legal name as incorporated] (herein referred
to as the "Resident Organization"). It shall be composed of the
residents of _________________________ [name of the property or
legal community] (the "Membership" or "Members") and an elected
Resident Organization Board (the "Board"). It is a not-for-profit
organization constituted and established under the laws of
the State of _________________.
The registered address of the Organization is
______________________________, [give full and complete street
address, including zip code] although the Resident Organization
may have offices at other places as the Board may from time to
time determine.
ARTICLE II: PURPOSE
The purpose of the Resident Organization is to improve the
quality of life for the residents of
________________________________ [name the property or legal
community]. There shall be only one (1) duly-organized and
recognized Resident Organization for ____________________________
[name the property or legal community]. In specific, the purpose
of the Resident Organization shall be to coordinate with project
ownership and management, as appropriate, on:
Section 1.
Issues and problems generally affecting the
residents and their community.
Section 2.
Activities that improve the quality of life;
promote education, economic stability, and
recreational opportunities for the residents; as
well as those that increase property
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beautification; and improve relationships with
management.
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Optional Sections:
Section 3.
Maintain a viable Resident Organization
representative of the residents who elected its
Officers and Board of Directors.
Section 4.
Assure adequate maintenance of all units and
common areas. [applicability of this item depends
on the type of Section 8 program in effect and the
ownership structure.]
Section 5.
Establish and maintain security and public safety
programs. [applicability of this item depends on
the type of Section 8 program in effect and the
ownership structure.]
ARTICLE III: MEMBERSHIP
All residents who are eighteen years of age or older, [or who are
heads of households (optional). Check to make sure that there
are no State law obstacles to the head of household provision)],
shall be Members and shall have full voting rights.
ARTICLE IV: MEMBERSHIP MEETINGS
Section 1.
Regular Membership Meetings shall be held not less
than once a month, and shall be open to all
residents.
Section 2.
Special Meetings may be called at any time by the
President, a majority of the Board, or by the
Members provided that the written notice including
the meeting agenda is given at least forty-eight
(48) hours prior to the meeting.
Section 3.
An Annual Meeting shall be held no later than
thirteen (13) months after the last annual meeting
of the Members and shall include election of Board
Members.
Section 4.
Notice of all regular monthly meetings together
with an agenda of the meeting shall be posted in a
regular location and be provided to residents in
writing at least ten (10) days in advance of
meetings.
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Meetings shall be held at such place and time as
shall be specified in the notice of the meeting.
A regular schedule and regular location are
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advisable.
Section 6.
Each time a member of the Board appears at a
regular or special meeting, a record of the
presence of that Director shall be placed in the
minutes of the meeting. The Board may request
that a record of all those attending the meeting
be recorded as well.
Section 7.
Each Member of the Resident Organization present
at a meeting shall be entitled to cast one (1)
vote on any subject for which a determination is
presented for consideration.
ARTICLE V:
POWERS AND RESPONSIBILITIES OF THE RESIDENT
ORGANIZATION
Section 1.
a.
b.
c.
d.
e.
Section 2.
a.
b.
c.
d.
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Members of the Resident Organization shall:
Elect the Board of Directors.
Vote on these By-Laws and any amendments to these
By-Laws.
Set the overall policy of the Resident
Organization through resolutions and motions on
activities.
Receive reports from the Board, the Secretary (who
shall also keep minutes of the meeting), and all
committees.
Receive the Treasurer's report including a
detailed report of all bills received and paid,
and any funds received.
Voting participation and procedure.
Each Member shall have one vote.
The President of the Resident Organization shall
chair the membership meetings and set procedure of
debate, setting time limits on speakers and number
of speakers allowed to speak for and against a
motion, when necessary.
Robert's Rules of Order shall be used to resolve
any conflicts about procedures.
Accurate records shall be kept for all elections.
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e.
f.
g.
In electing Board members, each Member will
receive votes equal to the number of seats open.
However, no Member may cast more than one (1) vote
for any candidate. The candidates who receive the
most votes will be the new Board members.
All elections shall be conducted in a democratic
manner.
See Article IX for provisions governing election
oversight.
ARTICLE VI: RESIDENT ORGANIZATION BOARD
Section 1.
Composition. The Board shall consist of nine
Directors elected at large by the Membership.
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Section 2.
a.
b.
Section 3.
a.
b.
Section 4.
Terms of Office.
The Board members shall be elected on a staggered
basis for two-year terms at each annual meeting.
Three (3) members of the first elected Board of
Directors shall be elected for a term of one (1)
year. Three (3) members of the first elected
Board of Directors shall be elected for a term of
two (2) years. The remaining three (3) members of
the first elected Board of Directors shall be
elected for a term of three (3) years.
Each year hereafter, the voting Members at the
regular annual meeting of Members shall elect
Directors to replace the Directors whose terms
have expired, so that each Director shall serve a
three (3) year term. Each Director shall hold
office until his or her successor shall have been
duly elected and shall have been qualified or
until his or her death or he or she shall resign.
Procedure for Nominations.
Nominations for the Board members shall be opened
ten (10) days before the meetings.
In order for a nomination to be placed on the
ballot, it must be made in writing to the
President at least ten (10) days before the annual
meetings.
Leave of Absence. Directors must request a Leave
of Absence in writing which shall be subject to
Board approval.
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Section 5.
Resignation. Directors may resign at any time
after delivering written resignation to the
President of the Board.
Section 6.
a.
b.
Section 7.
a.
Removal of a Board Member.
A member of the Board who has been absent from
three (3) consecutive meetings without excuse
shall automatically be removed unless a majority
vote of the Board members decides otherwise.
A member of the Board may be removed for good
cause, including conviction of a felony
malfeasance, by a two-thirds (2/3) vote of all
Members present at a duly constituted membership
meeting. The Board member being removed shall be
entitled to a written notice stating the grounds
for removal at least five (5) days in advance of
the meeting, and shall have the opportunity to be
heard before the Membership.
Vacancies.
Any vacancy on the Board shall be filled by
special election at the next regular Membership
meeting after the vacancy occurs, or at a special
meeting called for that purpose, provided that all
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b.
c.
Section 8.
Members receive at least ten (10) days written
notice that an election will be held to fill a
vacancy.
In the case of special elections, all nominations
shall be made from the floor.
In the case of a vacancy of the chair, the Vice
President shall assume the President's duties
until an election is held to fill the vacancy on
the Board. If any officer is elected to the
chair, another vote shall be taken to fill the new
vacancy.
Annual Meeting. The Board of Directors shall
convene an annual meeting before the end of each
fiscal year, and shall include election of Board
Members and presentation of an Annual Report to
the Membership. The Board shall hold its annual
meeting at the same place as and immediately
following each annual meeting of the Members for
the purpose of the election of Officers and the
transaction of such other business as may come
before the meeting. If a majority of the Board
are present at the annual meeting, no prior notice
of the annual meeting of the Board of Directors
shall be required. However, another place and
time for such meeting may be fixed by written
consent of all of the Board members.
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Section 9.
Annual Report. The Board of Directors shall
present, at each annual meeting of the Membership,
an annual report of the Resident Organization's
activities during the preceding fiscal year. It
shall also present such reports as may be required
by _________________, or any other funding agency.
The annual report shall include a detailed
financial statement of the costs incurred and
funds received by the Resident Organization and
during the preceding fiscal year.
Section 10.
a.
Duties. The Board shall:
Manage the affairs of the Resident Organization
between membership meetings.
Develop and recommend policy and programs for the
Resident Organization.
Coordinate the work of various committees of the
Resident Organization.
Report its activities at each meeting of the
Resident Organization.
Represent the Resident Organization in meetings
with Management and/or ownership.
b.
c.
d.
e.
ARTICLE VII: RESIDENT ORGANIZATION BOARD MEETINGS
Section 1.
Meetings. The Board shall meet at least once a
month before the meetings of the Resident
Organization. Special Meetings shall be held at
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any time when called by the order of the President
of the Board or by any four (4) Directors.
Section 2.
Notice. Each Board member shall be given timely
notice, no fewer than ten (10) days before each
regular or special meeting of the Board of
Directors. The notice shall be mailed to each
Director's residence or place of business, and
shall state the purpose, the time and the place of
the meeting and by whose order it was called.
Section 3.
Quorum. A simple majority of the Board members
shall constitute a quorum for conducting business.
Section 4.
Procedure. The Board shall adopt procedures
consistent with these By-Laws.
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ARTICLE VIII: OFFICERS
Section 1.
Title and Qualifications.
a.
President:
b.
Vice
President:
Shall preside over Board and
Membership meetings, represent the
Resident Organization in all
matters, appoint heads of standing
and temporary committees.
Shall assist the President in
carrying our his/her duties,
perform those duties when the
President is absent, and assume
those duties should the President
become incapacitated or resign
until new elections are held.
c.
Secretary:
Shall be the custodian of all
records and documents of the
Resident Organization and perform
all other duties consistent with
these By-Laws.
d.
Treasurer:
Shall have the care of, receive and
give receipt for monies due and
payable to the Resident
Organization and deposit all monies
received by him/her in the name of
the Resident Organization in such
banks, trust companies or other
depositories as may be designated
by the Board of Directors.
Section 2.
a.
Term of Office.
At the next election following adoption of the By-Laws,
nine (9) Officers shall be elected. The
President, Vice President, Secretary, and Treasurer
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shall each serve two-year (2) terms. Five (5)
community representatives shall each serve one-year
(1) terms.
b.
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At the next annual election, five (5) community
representatives shall be elected for a regular two-year (2) term.
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c.
After the initial two (2) years, elections will be
held every year to fill the seats of the Officers
whose terms have expired.
Section 3.
Resignations. Any Officer may resign at any time
by delivering a written resignation to the Board
of Directors.
Section 4.
Removal. Any Officer may be removed at any time,
for just cause, by a vote of the majority of the
Resident Organization Membership.
Section 5.
Vacancies. Officers filling a vacancy on the
Board, will serve for the remainder of the
unexpired term, after which the seat will be
filled in an annual election for a regular term.
Section 6.
Inspection of Resident Organization Records. Any
person who is a voting Member of the Resident
Organization shall have the right, for any proper
purpose and at any reasonable time, on written
demand stating the purpose thereof, to examine and
make copies from the relevant books and records of
accounts, minutes, and records of Members of the
Resident Organization. Upon the written request
of any voting Member, the Resident Organization
shall mail to such Member a copy of the most
recent balance sheet and revenue and disbursement
statement. If such request is received by the
Resident Organization before such financial
statements are available for its last fiscal year,
the Resident Corporation shall mail such financial
statements as soon as they become available. In
any event, the financial statements must be mailed
within four (4) months after the close of the
fiscal year. Additionally, balance sheets and
revenue and disbursement statements shall be filed
in the registered office of the Resident
Organization, shall be kept for at least five (5)
years, and shall be subject to inspection during
business hours by any voting member, in person or
by agent.
ARTICLE IX:
ELECTION OVERSIGHT
The Resident Organization must have a democratically elected
governing board. See also Article V, Section 2 governing voting
participation and procedure.
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Section 1.
Third-Party Oversight. The Resident Organization
shall use local election boards, commissions, or
another independent third-party to oversee
elections and recall procedures.
Section 2.
Frequency. All procedures must assure fair and
frequent elections on a regular basis.
Section 3.
Terms. Staggered terms and term limits for the
Board of Directors and Officers shall be determined
by the Resident Organization.
Section 4.
Notice. Description of election and recall
procedures, eligibility requirements and dates of
nominations and elections must be given to all
voting Members at least thirty (30) days prior to
nomination and election.
Optional Section:
Section 5.
Recall. Any elected officer of the Resident
Organization may be recalled by a vote for removal
by a majority of voting Members. A recall election
must be promptly conducted when a petition
requesting such an election is received from not
less than ten percent (100i) of the voting
Membership. All procedures for petitioning for a
recall election shall be provided to voters for
their inspection and must be included in the By-Laws.
ARTICLE X: COMMITTEES
The Board shall establish as many committees as are needed to
conduct its business. The heads of these committees shall be
appointed by the President with advise and consent of the Board,
and the committee heads will report its activities at meetings of
the Board.
There are two (2) types of committees which typically serve an
organization. The first is called a "Standing Committee" and is
usually chaired by the a voting member of the Board. A second type
of committee is called ad hoc. An "Adhoc Committee" serves a
special purpose and continues for a limited period of time.
ARTICLE XI: FISCAL AFFAIRS
Section 1.
Deposit of Funds. All funds of the Resident
Organization not otherwise expended shall be
promptly deposited in such banks, trust
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companies, credit unions or other reliable and insured
depositories as the Board shall determine.
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Section 2.
Checks. All checks, drafts, endorsements, notes
and evidence of debt shall be signed by at least
two (2) officers as the Board of Directors may
authorize.
Section 3.
Loans. No loans or advances or promises of payment
shall be contracted or accepted on behalf of, or in
the name of the Resident Organization, except those
contracts authorized by the Board of Directors.
Section 4.
Contracts. An officer authorized by the Board of
Directors may, in the name of and on behalf of the
Resident Organization, enter into contracts which
are authorized by the Board of Directors.
ARTICLE XII:
Page 9 of 9
BY-LAWS
Section 1.
Adoption. These By-Laws shall be adopted and
become effective and the Resident Organization
established upon the signing of these By-Laws by at
least two-thirds (2/3) of all eligible Members at
the first duly constituted meeting of the
Membership. It is important to note that all of
the persons authorized on the Board to approve this
document should be signers of it.
Section 2.
Periodic Review. These By-Laws shall be reviewed
at least once every two (2) years by a temporary
committee, which shall recommend to the Resident
Organization any changes that should be made.
Section 3.
Amendments. Amendments to these By-Laws shall be
made by an affirmative vote of two-thirds (2/3) of
the eligible Members present at a duly constituted
Membership meeting provided that all Members have
received at least three (3) weeks written advance
notice of the changes being considered.
Approved and ratified at the Membership meeting of the _____ day of
_______________, 199_.
Signatures:
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The Management Agent Handbook
Directive Number: [Prev Hit][Next Hit]4381.5
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APPENDIX 10
DONATION OF EXCESS COMPUTERS TO NON-PROFIT
ORGANIZATIONS AND EDUCATIONAL INSTITUTIONS:
This appendix provides a quick guide for the provision of
surplus government owned computers to Neighborhood Networks
(NNs) Computerized Learning Centers (CLCs). IT IS NOT
INTENDED AS THE OFFICIAL "LAST" WORD, but as general
guidance from which you can build.
HUD's Office of Administration issued Notice 95-0006 ADM
(expired December 12, 1996), which provides the
Departments's official instructions for the donation of MM
excess computers to the above cited types of organizations.
While this document excluded PIH and Housing projects from
eligibility at issuance, this issue was clarified by the
General Counsel and there are a variety of subsequent
cc:mail and written messages for clarification. A revised
Notice which specifies that PIH and Housing projects are
eligible under the Stevenson-Wydler Technology Innovation
Act should become available about the time this HBK change
is printed.
Further information (and subsequent issuances) may be
obtained from the Management and Transportation Division of
the Office of Administrative and Management Services at
(202) 708-4602.
A.
Government Surplus Property Program:
Background:
The General Services Administration (GSA) is responsible for
oversight and management of government surplus property. In
most cases, Federal Agencies must report all surplus
property to GSA. Surplus property is first offered to
Federal Agencies. If no Federal Agency wants the property,
it is then made available for donation to State Agencies for
Surplus Property (SASP). Non-profit organizations may be
able to get surplus property through donations brokered by
their SASP. Eligibility for surplus property is determined
by the SASP in each State. Surplus property that is not
donated may be sold by GSA at auction. These sales are
usually open to the public, and provide another
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means for non-profit organizations to obtain surplus
government property. Limited authority has been granted to
Federal Agencies to make direct donations of
research/computer equipment only to schools and non-profit
organizations under the Stevenson-Wydler Technology
Innovation Act.
1.
To obtain surplus property you may try to contact your
nearest GSA office and obtain the name of a personal
property officer.
This person can provide valuable information when it
comes to obtaining, disposing and transferring property
from Federal Agencies to non-profits and educational
institutions under the Stevenson-Wydler Technology
Innovation Act. In addition, they can direct you to
the appropriate State utilization office (see SASP),
where other excess government equipment (and computers)
can be obtained.
2.
Ask your GSA contact about large scale disposal outlets
in your immediate are (large civilian government
operations or the military). These are usually sales
or auctions of used furniture and equipment.
3.
Request GSA to mail/fax copies of their reports of
Excess Personal property (SF-120) of the material which
may be available. (This is NOT something normally done,
but it is possible that some property officers may make
available this information, or access thereto.)
4.
GSA has a computerized database of surplus government
property (FEDS/SCREEN) that eligible Donees may access.
Currently, GSA will issue an access code to a SASP or
Donee at the inquiry only permission level. Non-profit
organizations requesting access codes must be sponsored
by their SASP. Accordingly, SASPs and Donees can
computer search GSA's nationwide inventory of surplus
property, but cannot freeze items electronically. GSA
will issue additional access codes at the inquiry and
freeze permission level to SASPs and Donees upon
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written request after the FEDS/SCREEN module is
modified to incorporate the allocation process.
Non-profits and educational institutions normally get
excess computer equipment from their SASP. There is
normally a small charge associated with these
transactions.
B.
"Rules" of Engagement:
1.
HUD can either transfer computer equipment to another
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Federal Agency, or donate to a nonprofit 501(c)(3) or
an educational institution. Please note that the
direct donation of computer equipment is a limited
authority allowed under the Stevenson-Wydler Technology
Innovation Act. Other donations to non-profits must be
handled by GSA or the SASP.
C.
2.
Housing staff may assist HUD Administrative staff, if
requested, by doing any required paperwork and
obtaining the necessary signatures on the gift/
acceptance agreement. The original of all paperwork
MUST remain with HUD's Administrative Officer.
3.
Do NOT store computers from another Federal Agency in
HUD; please arrange for direct shipment from the
donating agency to the project site.
Transfer Paperwork Guide:
REMEMBER: computers can go to non-profit corporations
(501(c)(3)s and educational institutions only !!
1.
All donations must be described on the SF-122 "Transfer
Order Excess Personal Property" (see Appendix 11A).
The SF-122 must be prepared by the Administrative
Officer so HUD Administration has records of donations
for Audit and required reporting purposes.
2.
See sample request letter to HUD (Appendix 11B), a
response letter to the NN site (Appendix 11C) and the
gift/acceptance form from Notice H-95-0006 for the
donee to sign (Appendix 11D).
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3.
The gift/acceptance form must be signed by the
appropriate representative of the agency receiving the
computers AND the HUD Administrative Officer BEFORE the
receiving agency gets the computers. The
Administrative Officer keeps the original.
4.
Arrange for direct transfer of the computers from HUD (or
another donating agency) to the Donee.
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APPENDIX 10A
APPENDIX 10A CONTAINS STANDARD FORM 122, TRANSFER ORDER - EXCESS
PERSONAL PROPERTY.
4381.5 REV-2
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..PDF:
Click Here to Download PDF Form
APPENDIX 10B
(FORMAT SAMPLE ONLY
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DEVELOP LOCAL VERSION)
Dear
:
(INSERT NAME OF ASSET MANAGER HERE)
Subject:
CLC Equipment
XYZ Apartments
Anytown, ST 12345
This letter is a request from the
_______________________________, a non-profit educational
corporation to the U.S. Department of Housing and Urban
Development, for excess computers and computer-related equipment.
We are requesting they be delivered to _____________________
Apartment's Computer Learning Center in
_________________________, State.
____________________, as managing owner of the
________________________ Apartments, do agree to accept such
equipment for the project on the following terms and conditions.
we will:
1.
remove all government inventory stickers.
2.
use this equipment as part of the _________________
Computer Learning Center (CLC) for educational purposes.
3.
hold this equipment under the care and custody of project
personnel at
____________________________, State. All
maintenance and repair costs of this computer equipment will
be borne by the ____________________________ project.
4.
only use legally owned software on these computers and
evidenced by Licenses, Certifications, manuals and the
original master diskette. We will also take appropriate
steps to ensure that no unauthorized copying and use of such
software copies occurs at the __________________________
CLC.
For ___________________________________ Apartments.
Science Club.
________________________________
,managing owner
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The
________________________
President
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APPENDIX 10C
(FORMAT SAMPLE ONLY
DEVELOP LOCAL VERSION)
Letter from HUD Field Office to NN Center at project site:
Dear:
As our staff noted in two telephone conversations on
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______________, we can transfer excess computer equipment to your
NN center, for its support. We have tentatively allocated the
following equipment:
___________________
___________________
___________________
___________________, each with
________ monitor and keyboards
Please sign the attached gift/acceptance agreement for our
records, to meet the requirements of Federal law. While a
written justification is required, given that the Office of
Housing has or will approve your Neighborhood Networks Business
Plan, only sign the statement referencing that plan just below
the signature block.
Please note that this statement also certifies the nonprofit
tax exempt status under section 501(c)(3) - of the IRS Code for
at least one of the parties in the partnership. Also, enter the
IRS 501(c)(3) number in the line on the first page, and return
the signed document as soon as possible.
Once we process this gift/acceptance agreement, we'll let
you know a date to get the equipment, and return a signed copy of
the agreement to you. We look forward to a successful CLC at
________________________ and are glad we can provide the support.
Please advise ___________________ at (
) ___-_______ if
you want to be kept on our list for future equipment allocation,
if some becomes available. If you have any questions, please
call me at (
) ___-_______.
Sincerely
Amy Jones
Administrative Officer
ABC State Office
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APPENDIX 10D
GIFT/ACCEPTANCE AGREEMENT
BETWEEN THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
AND
(EDUCATIONAL INSTITUTION OR NONPROFIT ORGANIZATION)
I.
PURPOSE.
The purpose of this Agreement is to establish an
understanding between the U.S. Department of Housing and
Urban Development (HUD), and (educational institution or
non-profit organization), concerning the transfer of excess
computers and computer-related equipment. The (educational
institution or nonprofit organization) understands and
agrees that this excess equipment will be used for the
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conduct of educational, technical, scientific and research
activities.
II.
AUTHORITY.
The Stevenson-Wydler Technology Innovation Act of 1980, as
amended, and Executive Order 12999, dated April 17, 1986,
provide that Federal agencies and department, may donate
research equipment that is excess to the needs of the
agency, or department to an educational institution or
nonprofit organization for the conduct of educational,
technical, scientific, and research activities.
III. OBJECTIVES.
This Agreement provides a mechanism for the transfer of
excess computers and computer-related equipment from the
U.S. Department of Housing and Urban Development to
(educational institution or nonprofit organization), in
accordance with procedures set forth in Public Law 104106,
and implementing Departmental directives.
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IV.
V.
DONEE ACKNOWLEDGEMENTS.
a.
Donees agree that excess computers and computer-related
equipment will be used for the stated educational,
scientific and research activities, only.
b.
Donated excess computers and computer-related equipment
are free of charge; however, the Donee must pay all
costs associated with packaging and transportation
unless HUD agrees to exempt the donee from these
charges.
c.
Upon physical receipt of the excess computers and
computer related equipment, the recipient coordinator
will sign a return copy of the SF-122, Transfer Order-Excess Personal Property, to the Department. Title of
ownership transfers to the Donee upon the Department's
receipt of the signed SF-122.
d.
The Department assumes no liability for accidents,
bodily injury, illness, damages or loss related to the
excess equipment donated under this program. The
Department will not be responsible for maintenance or
repairs. All equipment will be checked prior to
donation to ensure it is in good operating condition.
e.
Donees who wish to cancel a request for excess
computers and computer-related equipment must
immediately notify the designated HUD coordinator.
EFFECTIVE DATE.
This Agreement is effective as of the date of authorized
signatures representing the U.S. Department of Housing and
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Urban Development and the (educational institution or
nonprofit organization).
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The Coordinators for this Agreement are:
x_______________________________________________________________________
(Name/Title)
(Date)
x_______________________________________________________________________
(Educational Institution or Nonprofit Organization)
x_____________________________________________(__)________________________
(Address)
(Telephone Number)
***************
________________________________________________________________________
(Name/Title of Housing and Urban Development Representative)
________________________________________________________________________
(Telephone Number)
(Date)
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| File Type | application/pdf |
| File Title | https://hudgov-my.sharepoint.com/personal/amber_j_disabatino_hud_gov/Documents/Documents/PRAs/0305/2502-0305_LawsandRegulations |
| Author | Disabatino, Amber J |
| File Modified | 2024-04-10 |
| File Created | 2024-03-27 |