In accordance with previous requirements, the user agreement was only extended until the original due date. Now, advance and refinancing are a long-term conservation tool. In this section, the owner must also react to the comments and include those responses in the prepayment application. HUD HQ`s Office of Asset Management will confirm the advance. If the project owner voluntarily meets the requirements of Sections V and VII of the contract notice and enters into a long-term use contract, the project is not put on the market after refinancing with federal housing administration (FHA) insurance. Otherwise, the project could be put on the market. The contract notice provides for down payment procedures for all direct loans in Section 202 that require the secretary`s approval and do not do so, procedures for those who choose to enter into a long-term use contract (20 years) and procedures for those with Section 8 contracts that require further extensions and trademark waivers to a market. It replaces all current advance and refinancing guidelines. Section V of the notice deals with the requirements for approval of the prepayment of debt 202 if HUD approval is required. An important change is the requirement to sign and register a long-term user contract that extends the affordable price 20 years after the initial term of the mortgage. Under current requirements, revenue can only be spent on current tenants of the property. For other funded projects, a use agreement must be reached at least ten years after the end of the refinancing. Section X of the Notice outlines additional considerations based on the structure of the refinancing and the source of funding, including waiving the payment of flexible subsidy debts, subordination and/or resumption of Section 202 debt to facilitate retention, the use of FHA mortgage insurance, the continuation of the rent surcharge contract and the verification of the subsidy framework.
It contains references to existing guidelines and indications. Section VII deals with Section 8 rent increase for increased operating savings in debt servi. such rent increases may be justified by an increase in rents on the basis of the budget in section 8 of the renewal guide. Requests to waive a requirement can only be accepted by HUD HQ. The notice provides a detailed framework, but does not respond to all situations that may arise. As an owner, you should be sure to work with lenders and lawyers who can help you navigate the process. Each owner must explain in detail how the loan proceeds from the loan balance advance, renovation or project upgrade costs are used and exceed these costs. Revenues can also be used for renovation, modernization, upgrade, including equipment transformation; Construction of a supplement or other installation in or next to the project. With HUD permission, the owner can consolidate revenue from several refinancings in the same geographic region in order to set up the supplements or other facilities. Section XIII of the communication describes how HUD will process the application, including the requirement for a HUD multi-family HUB to evaluate the request within 30 days of receiving the full package after certain steps.