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TABLE OF CONTENTS

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CHAPTER 1. INTRODUCTION

1-1. Introduction 1-1

SECTION 1. GOALS, RESPONSIBILITIES, AND RELATIONSHIPS

1-2. Mission 1-1

1-3. Monitoring 1-2

1-4. Responsibility of Housing 1-2

1-5. Interrelationships 1-3

1-6. Cooperation 1-3

1-7. Mortgage Insurance Programs 1-3

1-8. HUD/Mortgagor/Managing Agent Relationship 1-4

1-9. HUD/Mortgagee Relations 1-6

1-10. Mortgagee/Mortgagor Relationship 1-6

SECTION 2. CHANGING CONCEPTS AND ASSET MANAGEMENT

1-11. Perspective 1-8

1-12. Description 1-8

1-13. HUD Asset Management Functions 1-9

1-14. Loan Servicing/Asset Management Skills 1-11

SECTION 3. APPLICATIONS OF ASSET MANAGEMENT CONCEPTS

1-15. Loan Servicing vs. Asset Management 1-13

1-16. Asset Management Initiatives 1-14

1-17. Objectivity 1-14

1-18. Project Residents 1-14

1-19. Recommendations for Effective Communication 1-15

1-20. Other Communication Guidelines 1-15

SECTION 4. ORGANIZATION OF THIS HANDBOOK; OTHER REFERENCES

1-21. Primary Handbook 1-16

1-22. HUD Handbook 4350.1 1-17

1-23. General Guidance 1-17

1-24. Other HUD Handbooks 1-17

CHAPTER 2. BASIC DOCUMENTS

2-1. Controlling Documents 2-1

2-2. Dockets 2-6

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CHAPTER 3. INITIAL SERVICING

3-1 Transfer of Control of a Project File from

Housing Development to Housing Management 3-1

3-2 Records and Files 3-3

3-3 Records Retention and Disposition 3-7

3-4 HUD Financial Requirements for Mortgagor 3-7

3-5 Post Construction Activities 3-11

3-6 Additional Services 3-11

CHAPTER 4. RESERVE FUND FOR REPLACEMENT

4-1 Introduction and Applicability 4-1

4-2 Requirements in Regulatory Agreements 4-1

4-3 Requirements in Mortgagee's Certificates 4-2

4-4 Remaining Economic Life of Improvements 4-2

4-5 Economic Life vs. Physical Life 4-3

4-6 Estimates of Remaining Economic Life 4-3

4-7 End of Useful Life of Improvements 4-4

4-8 Underwriting Considerations 4-4

4-9 Eligible and Ineligible Building Components 4-5

4-10 Adequacy of Reserve Fund for Replacements 4-7

4-11 Recommended Minimum Threshold 4-8

4-12 Adjustments to Recommended Minimum Threshold 4-8

4-13 Suspension of Deposits to Reserve Fund 4-9

4-14 Earliest Withdrawals 4-10

4-15 General Requirements for Requesting Withdrawals 4-11

4-16 HUD Actions 4-12

4-17 Optional Procedures for Requesting Withdrawals 4-12

4-18 Mortgagor and Mortgagee Records 4-14

4-19 Field Office Records 4-15

4-20 Investment Requirements for Reserve for

Replacement Funds in Section 8 projects 4-15

4-21 Liquidity Requirements 4-16

4-22 Investment of Reserve for Replacement Funds 4-17

4-23 Interest on Investments 4-18

4-24 Insured Mortgagee Charges for Handling

Investment of the Reserve Fund 4-19

4-25 Other Fees 4-20

4-26 Combined Investments 4-20

4-27 Mortgagee Cooperation 4-20

4-28 "Borrowing" from the Reserve Fund 4-21

4-29 Permission to "Borrow" from the Reserve Fund 4-21

4-30 Other Sources of Capital 4-22

Appendix 1 Form HUD 9250, Reserve Fund for

Replacement Authorization 4-23

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CHAPTER 5. PREVENTING MORTGAGE ASSIGNMENTS

SECTION 1. INTRODUCTION

5-1. Purpose 5-1

5-2. Types of Default 5-1

SECTION 2. PREVENTING DEFAULTS

5-3. Recognition of Potential Defaults 5-1

5-4. Indicators of Impending Default 5-2

5-5. Preventive Action 5-3

CHAPTER 6. PROJECT MONITORING

SECTION 1. ON-SITE MANAGEMENT REVIEWS

6-1. APPLICABILITY 6-1

a. Insured Projects and Projects with

HUD-Held Mortgages 6-1

b. Non-Insured Projects 6-2

c. Condominiums Insured Under Section 234 6-2

6-2. LEVELS OF ON-SITE MANAGEMENT REVIEWS 6-3

a. Comprehensive Management Reviews 6-3

b. Limited Management Reviews 6-3

c. Preparation for determining the level

of a potential Management Review 6-4

6-3. TYPES OF ON-SITE VISITS 6-6

a. Management Reviews 6-6

b. File Reviews 6-6

c. Inspections 6-9

6-4. INTERRELATIONSHIPS 6-10

a. Relationship of Management Reviews to

Physical Inspections 6-11

b. Relationship of Management Reviews to

Desk Reviews of Financial Statements 6-12

c. Relationship of Management Reviews

to File Reviews 6-12

6-5. FREQUENCY OF ON-SITE VISITS 6-14

a. Management Reviews 6-16

b. File Reviews 6-17

c. Physical Inspections 6-17

d. Priority Ranking List 6-19

e. Relationship of On-site reviews to

requests for HUD assistance 6-19

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6-6. DETERMINING THE SCOPE OF THE ON-SITE REVIEW 6-20

a. Examples for Adapting the

Management Review 6-21

SECTION 2. MANAGEMENT REVIEW FORM

6-7. MANAGEMENT REVIEW FORM AND PURPOSE 6-23

a. Management Reviews and Use of

Form HUD-9834 6-23

b. Purpose of the Form HUD-9834 6-23

6-8. USE OF REVIEW FORM 6-23

a. Instructions to Field Staff on

Form HUD-9834, Management Reviews

of Multifamily Projects 6-23

b. Guidance in Using the Form HUD-9834 6-25

c. Distribution 6-25

6-9. SPECIFIC GUIDANCE FOR FORM HUD-9834 6-25

6-10. CHANGES IN POLICIES AND PROCEDURES: FORM HUD-9834 6-26

6-11. MANAGEMENT REVIEW CATEGORY RATINGS 6-26

a. Superior Rating 6-27

b. Satisfactory Rating 6-27

c. Below Average Rating 6-27

d. Unsatisfactory Rating 6-28

e. Rating of Overall Management Operation 6-29

6-12. NOTIFICATION TO OWNERS/MANAGERS 6-30

6-13. OWNER/MANAGER ACTIONS UPON RECEIPT OF

MANAGEMENT REVIEW 6-30

6-14. APPEALS PROCEDURES FOR OWNERS/AGENTS 6-30

a. Initial Appeal to Field Office 6-30

b. Final Appeal 6-31

c. Final Decision Nonappealable 6-31

6-15. MONITORING 6-31

6-16. ACTIONS TO BE TAKEN BY FIELD OFFICES IN THE

EVENT OF OWNER NONCOMPLIANCE, NONRESPONSE OR

NONPERFORMANCE OF ACTION PLAN 6-32

SECTION 3. PHYSICAL INSPECTION

6-17. PHYSICAL INSPECTION PRIORITY SYSTEM 6-33

a. Priority Listing and Resource Allocation 6-34

b. Physical Inspection Tracking

and Quality Control System 6-35

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6-18. YEARLY INSPECTION REQUIREMENT FOR TROUBLED,

POTENTIALLY TROUBLED, AND NONINSURED, ASSISTED

PROJECTS WHERE HUD IS THE CONTRACT ADMINISTRATOR 6-35

6-19. INCREASED EMPHASIS ON QUALITY OF MORTGAGEE

PHYSICAL INSPECTION 6-35

a. Mortgagee Physical Inspection Requirements 6-35

b. Field Offices Ensure Inspection Reliability 6-36

c. Unacceptable Mortgagee Physical Inspection 6-36

d. HUD Remedies for Mortgagee Noncompliance 6-36

6-20. CURRENT PHYSICAL INSPECTION REQUIRED PRIOR TO

APPROVAL OF FUNDING ACTIONS 6-37

6-21. REQUIREMENT FOR DRIVE-BY/WALK-THROUGH REVIEWS

WHEN HUD STAFF IS IN PROJECT PROXIMITY 6-37

6-22. OTHER REQUIREMENTS FOR FIELD OFFICE

PHYSICAL INSPECTIONS 6-37

a. Conditions for Field Office Inspections 6-37

6-23. REQUIREMENT TO DISCUSS FINDINGS WITH OWNER/AGENT

AND DOCUMENTATION OF PHYSICAL INSPECTION FINDINGS 6-38

a. Close-out Meeting Requirement 6-38

b. Physical Inspection Report 6-39

c. Transmittal of Completed Physical Inspection 6-39

6-24. PHYSICAL INSPECTION DEFICIENCY PROCEDURES 6-40

a. Field Office determines nature of deficiency 6-40

b. Required actions by owner/agent 6-40

6-25. MONITORING CORRECTIVE ACTIONS 6-41

a. Development/Implement tracking system 6-41

b. Tracking and Review of Corrective

Action Plans 6-41

c. Initial actions to be taken in event of

noncompliance 6-42

6-26. ACTIONS BY FIELD OFFICE NECESSITATED BY

NONCOMPLIANCE, NONRESPONSE OR NONPERFORMANCE

BY OWNERS OF PROJECTS WITH HUD-INSURED OR

HUD-HELD MORTGAGES 6-42

a. Imposition of Sanctions 6-43

b. Declaring a Technical Default 6-44

c. Initiation of Litigation 6-45

d. Director, HM and Regional Counsel Functions 6-46

6-27. INSPECTION OF UNITS IN THE SECTION 8 SPECIAL

ALLOCATIONS (LMSA/PDSA) PROGRAMS 6-46

6-28. INSPECTION OF ARMED SERVICES HOUSING PROJECTS 6-46

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APPENDICES

APPENDIX 1 - Form HUD-9834, Management Reviews of

Multifamily Projects 6-47

APPENDIX 2 - Form HUD-9822, Physical inspection Report 6-67

APPENDIX 3 - INDICATORS FOR TROUBLED/POTENTIALLY

TROUBLED PROJECTS 6-69

APPENDIX 4 - ROLE OF FIELD AND REGIONAL COUNSEL IN

COMPREHENSIVE MULTIFAMILY SERVICING 6-71

CHAPTER 7. PROCESSING BUDGETED RENT INCREASES AND FEES FOR

COMMERCIAL SPACE AND SERVICES IN INSURED, DIRECT

LOAN AND NON-REGULATED HUD PROJECTS

SECTION 1. OVERVIEW

7-1. Purpose 7-1

7-2. Applicability 7-1

7-3. Projects Subject to the Alternate Rent

Determination Mechanism 7-2

7-4. Definitions 7-2

SECTION 2. TENANT COMMENT PROCEDURES FOR A RENT INCREASE

7-5. General 7-3

7-6. Applicability 7-4

7-7. Owner Responsibilities 7-4

7-8. Tenant Review and Comment 7-5

7-9. Comment Submission 7-5

7-10. Changes to Supporting Documentation 7-5

7-11. Submitting the Formal Request for an Increase 7-5

SECTION 3. DECONTROL OF RENTS

7-12. Decontrol of Section 220/221 7-6

7-13. HURRA of 1983 7-6

7-14. Decontrol of Section 207 7-6

7-15. Section 207/LMSA 7-6

7-16. 1987 Housing Act 7-7

7-17. Projects Not Covered by the 1987 Act 7-7

7-18. Project Covered by the 1987 Act 7-7

7-19. Special Cases 7-8

7-20. PMMs 7-8

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SECTION 4. OWNER REQUEST FOR A RENT INCREASE

7-21. Procedures for Requesting a Rent Increase 7-8

7-22. Initial Submission 7-8

7-23. Use of the Alternate Rent Mechanism 7-10

7-24. Determination of a Utility Allowance 7-14

7-25. Field Management of the Rent Request Process 7-15

7-26. Seasonal Rents 7-16

7-27. BMIR Rents Paid by Over-Income Tenants 7-17

7-28. Section 236 Projects, Rent Collected in Excess

of Basic Rent 7-18

SECTION 5. REVIEW OF PROJECT INCOME AND EXPENSES

7-29. Focusing the Review 7-27

7-30. Guidance for Evaluating the Appropriateness

of Project Expenses 7-30

7-31. Quality Control 7-41

SECTION 6. COMPUTING RENT POTENTIAL AND UTILITIES

7-32. Maximum Allowable Monthly Rent Potential 7-41

7-33. New Maximum Unit Rents (Section 236) 7-42

7-34. Review the Owner/Agent Estimate of Non-Rental

Income 7-42

7-35. Determine the New Utility Allowances 7-43

SECTION 7. NOTIFICATION AND IMPLEMENTATION

7-36. Notifying the Owner 7-44

7-37. Review the Owner's Submission of the Rent

Schedule (Form HUD-92458) When the Proposed

Increase Won't Exceed the HUD Approved Gross

Rent Potential 7-45

7-38. If the Proposed Potential Exceeds the maximum

Monthly Rent Potential 7-45

7-39. Increase Implementation 7-46

7-40. Notifying Tenants 7-46

SECTION 8. CHARGES FOR COMMERCIAL FACILITIES

7-41. Determining Charges 7-46

SECTION 9. CHARGES FOR FACILITIES AND SERVICES

7-42. Facilities and Services Subject to Charge 7-48

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SECTION 10. PREEMPTION OF LOCAL RENT CONTROL

7-43. Introduction 7-48

7-44. Projects Automatically Preempted 7-49

7-45. Actions Owner Must Take Before Submitting

a Formal Request for Presumptions of Unsubsidized

Projects 7-49

7-46. Processing and Exemption 7-52

7-47. Initial HUD Review for Completeness 7-52

7-48. Owner's Formal Preemption Request 7-52

7-49. Evaluating the Formal Request 7-53

7-50. Owner Implementation of HUD's Decision

on Preemption 7-54

7-51. Preemption of Rent Control Board's Lease

Requirements 7-54

SECTION 11. PROCEDURES FOR APPEALING BUDGETED RENT INCREASE

ADJUSTMENTS

7-52. Levels of Appeal 7-55

7-53. Implementation 7-55

7-54. Tenant Notification 7-55

7-55. Initial Appeal to Field Office 7-56

7-56. Final Appeal 7-56

7-57. Further Appeal 7-57

APPENDICES

Appendix-1. 24 CPR Part 245, Subparts D and E 7-58

Appendix-2. Owner's Certification As To Compliance

With 24 CFR, Part 245 7-65

Appendix-3. Certification As To Purchasing Practices

and Reasonableness of Expenses 7-66

Appendix-4(a). Rent Increase Budget Sheet Instruction 7-68

Appendix-4(b). Sample Owner Explanation of Income

and Expenses 7-69

Appendix-4(c). Schedule of Interest Rates 7-74

Appendix-4(d). Budget worksheet 7-75

Appendix-5. Rent Computation Worksheet 7-77

Appendix-6. Request to Increase Monthly Replacement

Reserve Deposits 7-84

Appendix-7. Amendment to Regulatory Agreement for

Section 220 and 221(d)(4) Projects

(Forms 92466) 7-85

Appendix-8. Regulatory Agreement Amendment for Mortgages

Limited Distribution, Project 7-86

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Appendix-9. Addendum to Regulatory Agreement and/or

Corporate Charter for 207, 223(f), 608

213 Rental, 234 Rental, 803, 810, 231(c)4 or

Owners of 220 or 221(d)(4) Projects whose

Owners Choose the Alternate Method 7-87

Appendix-10. 24 CFR, Part 246 - Local Rent Control 7-89

Appendix-11. Mortgagee Letter 83-24, 89-12 7-95

Appendix-12. Form Letter to Be Used Pursuant to

Section 4, Paragraph 8(c)(3), Rents

Collected in Excess of Basic Rent 7-103

Appendix-13. Rent Schedule - Form HUD 92458 7-104

Appendix-14a. Confession of Judgement Note 7-107

Appendix-14b. Excess Rental Repayment Agreement 7-109

CHAPTER 8. ENFORCEMENT OF MORTGAGOR REQUIREMENTS

SECTION 1. DETECTING A VIOLATION 8-1

SECTION 2. WHEN A VIOLATION HAS BEEN ESTABLISHED 8-1

SECTION 3. VERIFYING CORRECTIVE ACTIONS 8-2

SECTION 4. CIVIL AND CRIMINAL PENALTIES 8-2

CHAPTER 9. ENFORCEMENT OF CIVIL RIGHTS REQUIREMENTS,

NONDISCRIMINATION AGAINST INDIVIDUALS WITH

HANDICAPS IN EMPLOYMENT

SECTION 1. ENFORCEMENT OF CIVIL RIGHTS AND NONDISCRIMINATION

REQUIREMENTS

9-1. Covered Programs 9-1

9-2. Overview 9-2

9-3. Coordination Between Housing and FHEO 9-4

9-4. FHEO Checklist (Exhibit 9-1) Completed by

Housing Management Staff 9-5

9-5. Management Review Closeout that Involves FHEO

Related Issues 9-5

9-6. Housing Management's Assistance in Correcting

Civil Rights-Related Deficiencies through

Voluntary Measures 9-6

9-7. Housing's Program Sanctions 9-7

9-8. Sanctions Delegated to the Field Office

Housing Management Division 9-8

9-9. Sanctions Authorized by Office of Housing in

Headquarters 9-9

9-10. FHEO Actions 9-10

9-11. Field Office Reporting 9-10

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SECTION 2. NONDISCRIMINATION AGAINST INDIVIDUALS WITH

HANDICAPS IN EMPLOYMENT

9-12. Applicability 9-11

9-13. Requirements 9-11

9-14. Prohibitions Against Employment Discrimination 9-12

9-15. Reasonable Accommodation 9-13

9-16. Employment Criteria 9-14

9-17. Pre-employment Inquiries 9-15

EXHIBIT-1. FHEO CHECKLIST (TO BE COMPLETED BY HOUSING

MANAGEMENT STAFF) 9-17

CHAPTER 10. HUD-HELD SERVICING

SECTION 1. INTRODUCTION

10-1. General 10-1

10-2. Definition of a HUD-Held Mortgage 10-1

10-3. Types of Defaults 10-2

10-4. HUD's Right to Require Acceleration of the Debt 10-2

SECTION 2. ASSIGNMENT OF MORTGAGE

10-5. General 10-2

10-6. Election to Assign 10-3

SECTION 3. REINSTATING DEFAULTED MORTGAGES

10-7. General 10-6

10-8. Owner Responsibilities after Assignment 10-6

10-9. Owner Requests for Relief 10-7

SECTION 4. GENERAL SERVICING REQUIREMENTS

10-10. General 10-7

10-11. Monthly Accounting Reports 10-8

10-12. Financial Statements 10-8

10-13. Hazard Insurance 10-8

10-14. Taxes 10-8

10-15. Uniform Commercial Code (UCC) Requirements 10-9

10-16. Funded Reserves 10-9

10-17. Use of Project Funds 10-9

10-18. Survey of Tenants in Assigned Properties 10-9

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SECTION 5. SERVICING PARTIAL PAYMENT OF CLAIMS MORTGAGES

10-19. General 10-11

10-20. Owner Requirements 10-11

10-21. Field Office Responsibilities 10-12

SECTION 6. SECTION 202 AND 202/8 LOANS AND ADVANCES

10-22. General 10-12

10-23. Definitions 10-13

10-24. Basic Documents 10-13

10-25. Required Accounts 10-14

10-26. Rent Increase Requests and Annual Operating

Budgets 10-15

10-27. Annual Financial Statements 10-15

SECTION 7. DEFAULT SERVICING OF SECTION 202 PROJECTS

10-28. General 10-15

10-29. Defaults and Adverse Trends 10-15

10-30. Waiver of Reserve Deposits and Scheduled

Payments 10-15

10-31. Relief and Reinstatement of Defaulted

Section 202 Loans 10-16

10-32. Partial Release of Security 10-16

EXHIBITS

Exhibit-1. Projects with Assigned Mortgages 10-17

Exhibit-1A. Instructions for Owners of Projects

With Assigned Mortgages 10-18

Exhibit-2. Income Chart for Projects with

Assigned Mortgages 10-19

Exhibit-3. Tenant Income Survey 10-20

Exhibit-4. Privacy Act Notice Statement 10-21

APPENDICES

Appendix-1. Letter to Owner Upon Receipt of

the Lender's Election to Assign 10-22

Appendix-2a. Format - Letter to Owner at Default

Assignment 10-23

Appendix-2b. Format - Letter to Owner at G-4 Assignment 10-25

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CHAPTER 11. WORKOUTS FOR HUD-HELD PROJECTS

SECTION 1. INTRODUCTION

11-1. General Workout Philosophy 11-1

11-2. New Term Length Flexibility 11-3

11-3. Understanding the Impact of Workouts

on Note Sales 11-6

11-4. Glossary 11-8

SECTION 2. PREVENTING MORTGAGE ASSIGNMENT; PROCEDURES

UPON ASSIGNMENT

11-5. Loss Mitigation 11-12

11-6. Mortgages in the Process of Being Assigned 11-13

11-7. Owner Responsibilities after Assignment 11-13

11-8. Beginning the Foreclosure Process 11-14

SECTION 3. REINSTATING HUD-HELD MORTGAGES

11-9. Introduction 11-15

A. Workout Agreement 11-16

B. Mortgage Modifications 11-17

11-10. Owner Requests for Relief 11-18

11-11. Developing the Workout Arrangement 11-19

A. Analyzing the Project 11-19

B. Analysis of Market Conditions 11-20

C. Legal Review 11-20

D. Determining Project Needs and Abilities 11-20

E. Reviewing Available Relief Tools 11-22

F. Negotiating a Specific Relief Plan 11-23

G. Capital Contributions 11-23

H. Escrows for Repairs 11-24

I. Pre-Workout Waiver Letter 11-25

11-12. Preparing the Provisional Workout Arrangement 11-26

A. Format 11-26

B. Specific Dollar Amount Due 11-26

C. MIO Plans 11-26

D. Effective Date 11-27

E. Provisional Workout Arrangements

-- Mandatory Terms 11-27

F. Provisional Workout Arrangements

-- Optional Terms 11-27

11-13. Executing and Distributing Workout Arrangements 11-32

11-14. Monitoring Owner Compliance 11-33

11-15. Modifications of Notes and Mortgages 11-34

11-16. Reinstatement Requirements During Foreclosure

Proceedings 11-35

11-17. Cash Final Settlements 11-35

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SECTION 4. OFFSETTING OF SECTION 8 PAYMENTS

11-18. General Information 11-36

11-19. Procedures for Offsetting Section 8 Payment 11-36

SECTION 5. APPROVAL AND APPEAL PROCESS

11-20. HUD State or Area Office Approval 11-37

11-21. Asset Management Branch 11-37

11-22. Waiver of Handbook Directives 11-38

SECTION 6. LONGER YEAR WORKOUT ARRANGEMENTS

11-23. General Information 11-38

11-24. Applicability 11-39

11-25. Alternative Methods of Workout Agreements 11-39

11-25. Alternative Methods of Workout Agreements 11-39

11-26. No Workout in Excess of 9 Years 11-41

APPENDICES

Appendix 1 Delinquency Alert Letter 11-42

Appendix 2 Default Notice Letter 11-43

Appendix 3a Letter to Owner at Default Assignment 11-44

Appendix 3b Letter to Owner at G-4 Assignment 11-47

Appendix 4 Sample Provisional Workout Agreement 11-48

Appendix 5 MARS Workout Cover Sheet 11-56

Appendix 6 Instructions for Submitting Funds by Wire

Transfer 11-59

Appendix 7 Call Provision Language 11-62

Appendix 8 Optional Workout Terms 11-63

Appendix 9 Notification of HUD's Intent to Offset

Section 8 Payments 11-64

Appendix 10 Memo to Accounting Division Requesting

Section 8 Offset 11-65

Appendix 11 Information Sheet - Section 202

Reinstatement Section 11-66

Appendix 12 Form of Pre-Workout Waiver Letter 11-70

CHAPTER 12. ENERGY CONSERVATION

SECTION 1. CHAPTER OVERVIEW

12-1. Introduction 12-1

12-2. Purpose 12-1

12-3. Applicability 12-1

SECTION 2. MULTIFAMILY ENERGY SURVEY FOR

HUD-INSURED PROPERTIES

12-4. Conducting the Survey 12-3

12-5. Development of an Energy Conservation Plan 12-5

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12-6. Follow-up Study of Energy Conservation Efforts 12-5

12-7. Monitoring Requirements and Compliance 12-5

12-8. Tenant Involvement 12-6

SECTION 3. COMPREHENSIVE TECHNICAL ENERGY AUDIT

12-9. Introduction 12-6

12-10. Purpose 12-7

12-11. Conducting the Comprehensive Technical

Energy Audit 12-7

a. Purpose 12-7

b. Funding 12-8

c. Audit 12-8

d. Audit Guidelines 12-8

12-12. Requirements for the Capital Improvement Loan

Program

12-13. The Energy Conservation Plan (ECP) 12-15

12-14. Evaluation Audit Results 12-16

a. Technical Aspects of the Audit 12-16

b. Renewable Energy and Energy Management

Systems 12-21

c. Financial, Technical and Informational

Assistance 12-22

SECTION 4. FUNDING MECHANISMS AVAILABLE TO

IMPLEMENT ENERGY CONSERVATION MEASURES

12-15. Use of Project Fund 12-23

12-16. Alternative Funding Sources 12-23

12-17. HUD Approval 12-25

SECTION 5. CONVERSION FROM MASTER METERED UTILITIES

TO INDIVIDUALLY METERED (TENANT PAID) UTILITIES

12-18. Background and Purpose 12-25

12-19. Tenant Paid Utilities 12-26

12-20. Practicality of Conversion to Tenant Paid

Utilities 12-26

12-21. Submitting the Conversion Request 12-27

12-22. Tenant Input 12-28

12-23. HUD Approval of the Plan 12-29

APPENDICES

Appendix 1. Form HUD-9614, Multifamily Walk-Through

Energy Survey and Energy Conservation

Measures 12-34

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Appendix-2. Ways the Tenants Can Assist in Conserving

Energy 12-42

Appendix-3. Energy Reduction Tips for Project

Management 12-44

CHAPTER 13. CHANGE OF OWNERSHIP: TRANSFER OF PHYSICAL ASSETS

SECTION 1. DELEGATION OF AUTHORITY AND EXCEPTION

13-1. Field Office Delegations 13-1

13-2. Requirement for Regional Office Prior Approval 13-1

13-3. Requirement for Headquarters Prior Approval 13-2

13-4. Documentation Required for Regional and

Headquarters Reviews 13-2

13-5. Preliminary and Final Approval Actions 13-3

SECTION 2. TRANSACTIONS REQUIRING REVIEW (CATEGORIES OF

REVIEW)

13-6. Transactions Not Requiring an Application Fee 13-4

13-7. Full Review 13-5

13-8. Modified Review 13-5

13-9. Questionable Transactions 13-6

SECTION 3. DETERMINATIVE CRITERIA FOR REVIEW OF TPAs

13-10. Requirement that a Proposed Owner/Managing

General Partner Obtain Previous Participation

Clearance 13-7

13-11. Field Office Requirement for Management Review

and Physical Inspection and a Requirement for

Proposed Management Agent Previous Participation

Clearance 13-7

13-12. Determination by Field Office that a Project's

Physical Repair/Replacement Needs Will Be Met 13-9

13-13. Determination by Field Office that a Project's

Operating Financial Needs Will Be Met 13-12

13-14. Field Office Determination Concerning HUD

Legislative, Regulatory and Administrative

Requirements 13-14

13-15. Special Circumstances Determination:

Secondary Financing 13-15

13-16. Special Circumstances Determination:

Condominium/Cooperative Conversions 13-16

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SECTION 4. TPA INVOLVING NONPROFIT TRANSFER TO LIMITED

DIVIDEND ENTITY

13-17. Field Office Statement of Necessity for TPA 13-17

13-18. Field Office Analysis of TPA 13-17

13-19. Remuneration to Nonprofit Sellers 13-19

13-20. Required Minimum Cash Contributions 13-20

13-21. Transfer Prior to Final Endorsement 13-20

13-22. Prepayment Restrictions 13-21

13-23. Distributions/Rent Formula 13-21

SECTION 5. DISPOSITION OF FLEXIBLE SUBSIDY UPON TRANSFER

13-24. Nonprofit to Nonprofit Transfer 13-21

13-25. Limited Dividend/Profit Motivated to Limited

Dividend/Profit Motivated Transfer 13-21

13-26. Nonprofit to Limited Dividend Transfer 13-22

SECTION 6. SUBSIDY LAYERING AND EXCESS COMPENSATION

SECTION 7. RELATIONSHIP TO OTHER COMMITMENTS

13-27. HUD Commitments 13-23

13-28. Other Governmental Commitments 13-24

13-29. Low Income Housing Tax Credits (LIHTC) 13-24

SECTION 8. RELATIONSHIP TO PRESERVATION OF LOW INCOME HOUSING

13-30 Prepayment Restrictions 13-24

13-31 TPA Restrictions Applicable to certain

Subsidized Projects 13-25

SECTION 9. MONITORING AND REPORTING

13-32. Monitoring Schedule 13-26

13-33. Monitoring Procedures for Completed TPAs 13-26

13-34. Location and Maintenance of Monitoring File 13-27

13-35. Non-Compliance with Transfer 13-27

13-36. Operational Difficulties Unrelated to Transfer

Conditions 13-27

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APPENDICES

Appendix-A. Procedures for Processing a Full Review

Transfer 13-28

I. Transfers Requiring Full Review

II. Full Review-Overview

III. Full Review Processing - Details

Appendix-A1. Acknowledgment of Receipt of Submission 13-42

Appendix-A2. Return of Seriously Deficient Submission 13-43

Appendix-A3. Request for Correction of Deficient

Submission 13-44

Appendix-A4. Request for Legal or Other Review 13-45

Appendix-A5. Request for Guidance from Regional Office 13-46

Appendix-A6. Form Memo to Regional Counsel 13-47

Appendix-A7. Preliminary Approval 13-48

Appendix-A8. Rejection of Proposed TPA 13-49

Appendix-A9. Request for Full Regional or Headquarters

Review 13-50

Appendix-A10. Final Approval 13-51

Appendix-A11. Attorney's Certification on Execution and

Recordation 13-52

Appendix-A12. Attorney's Certification of Changes 13-53

Appendix-B. Procedures for Processing a Modified Review

Transfer 13-54

I. Types of Transfers Requiring a

Modified Review

II. Documentation Required for a Modified

Review

III. Processing a Modified Review

Appendix-C. Instructions for Preparation of the

Application of Transfer of Physical Assets 13-58

Appendix-D. Application for Transfer of Physical Assets 13-64

Appendix-E. TPA Submission Checklist Preliminary Review 13-69

Appendix-F. Sources and Uses of Funds Statement 13-73

Appendix-G. Notice 84-37 Memorandum from

Charles J. Bartlett, Legal Review of

Transfer of Physical Assets Proposals 13-76

CHAPTER 14. PARTIAL PAYMENTS OF CLAIMS

SECTION 1. GENERAL INFORMATION

14-1. Projects That are Eligible 14-1

14-2. Projects That are not Eligible 14-2

14-3. Regulatory Requirements 14-2

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SECTION 2. OWNER'S PROPOSAL

14-4. Requirements 14-3

14-5. Proposal Submitted by the Owner 14-4

SECTION 3. FIELD OFFICE REVIEW

14-6. Field Office Analysis 14-5

14-7. Field Office Findings 14-8

SECTION 4. APPROVAL AND REJECTION LETTER

14-8. Approval Letter 14-9

14-9. Rejection Letter 14-9

SECTION 5. CLOSING AND POST CLOSING REQUIREMENTS

14-10. Required Closing Documentation and Review 14-9

14-11. Scheduling the Closing 14-10

14-12. Owner's Compliance 14-10

APPENDICES

Appendix-1. Letter Offering a Partial Payment of Claim 14-11

Appendix-2. Regulations 14-12

Appendix-3. Partial Payment of Claim Worksheet 14-13

Appendix-4. FHA Debenture Interest Rate Table 14-17

CHAPTER 15. REFUNDINGS OF TAX-EXEMPT MULTIFAMILY REVENUE BONDS

SECTION 1. GENERAL

15-1. Purpose 15-1

15-2. Authority 15-1

15-3. Applicability 15-1

SECTION 2. BOND REFUNDING PROPOSALS AND HUD REVIEW

15-4. Submission of Proposals 15-2

15-5. Requirements for Proposals 15-3

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SECTION 3. HUD FIELD OFFICE REVIEW

15-6. Coordination 15-4

15-7. Loan Management Review 15-4

15-8. Legal Review 15-5

15-9. Authorizing/Rejecting Bond Refunding 15-6

SECTION 4. CLOSING

15-10. Timing 15-6

15-11 Extensions 15-6

SECTION 5. MONITORING

15-12. Monitoring Compliance with the Authorization

Letter 15-7

15-13. Monitoring After Closing of the Bonds 15-7

APPENDICES

Appendix-1. Bond Refunding Worksheet - Determining 15-9

Whether the Field Office or Headquarters

will Perform the Review

Appendix-2. Loan Management Review of Bond Refunding 15-10

Proposals

Appendix-3. Tax-exempt Refunding Authorization Letter 15-12

Appendix-4. Certification on Execution and recordation

by the Mortgagor's Attorney 15-14

Appendix-5. Bond Refunding Sources and Uses of Funds 15-15

Appendix-6. Determining Allowable Transaction Costs 15-16

CHAPTER 16. PARTIAL RELEASE OF SECURITY; ALTERATIONS,

MODIFICATIONS, OR ADDITIONS TO PHYSICAL STRUCTURES

SECTION 1. PARTIAL RELEASE OF SECURITY

16-1. Purpose 16-1

16-2. Covered Programs 16-1

16-3. Delegation of Authority 16-2

16-4. Applicability 16-4

16-5. Tenant Notice 16-5

16-6. Service of Notice 16-6

16-7. Initial Submission of Materials to HUD 16-6

16-8. Rights of Tenants to Participate 16-7

16-9. Submission of Request for Approval to HUD 16-8

16-10. Notification to Tenants of HUD's Decision 16-8

16-11. Negotiated Releases (Voluntary) 16-8

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16-12. Judicial/Mandated Releases 16-11

16-13. Easements 16-12

16-14. Housing Actions 16-13

16-15. Coordination with the Office of

Preservation and Property Disposition 16-15

SECTION 2. ALTERATIONS, MODIFICATION, OR ADDITIONS To

PHYSICAL STRUCTURES

16-16. Alterations to Physical Structures 16-16

16-17. Conversion of Residential Units to

Commercial Use 16-16

16-18. Tenant Notice 16-18

16-19. Service of Notice 16-19

16-20. Initial Submission of Materials to HUD 16-19

16-21. Rights of Tenants to Participate 16-21

16-22. Submission of Request for Approval to HUD 16-21

16-23. Decision of Request for Approval 16-21

CHAPTER 17. TAX CREDITS/SUBSIDY LAYERING

RESERVED

CHAPTER 18. ASSET MANAGEMENT OF FORMERLY COINSURED LOANS AND

PROPERTIES

SECTION 1. BACKGROUND AND CHAPTER OVERVIEW

18-1. Purpose 18-1

18-2. Overview of the Multifamily Coinsurance Program 18-1

18-3. FHA's Current Involvement 18-3

SECTION 2. THE PURPOSE OF THE CONTRACTOR

18-4. Definition of Asset Management Contractor 18-4

18-5. Purpose 18-4

18-6. The Role of the Contractor 18-4

18-7. Responsibility for Contractor duties in the

event a contract is not in place 18-5

SECTION 3. KEY PLAYERS AND RELATIONSHIPS

18-8. Purpose 18-5

18-9. Headquarters, Coinsurance Management Division 18-5

18-10. The Field Office Loan Management Branch 18-6

18-11. The Field Office Property Disposition Branch 18-6

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18-12. The Asset Management Contractor 18-7

18-13. GNMA and the GNMA Master Sub-Servicer 18-7

SECTION 4. RESPONSIBILITIES FOR ASSETS RECEIVED BY FHA FROM

DEFAULTED COINSURING LENDERS

18-14. Purpose 18-7

18-15. Acquired Properties 18-7

18-16. Current Loans 18-9

18-17. Loans in Default 18-11

SECTION 5. RESPONSIBILITIES ON SPECIFIC SERVICING ISSUES

PERTAINING TO FORMERLY COINSURED LOANS

18-18. Purpose 18-13

18-19. Transfer of Physical Assets (TPA) 18-13

18-20. Inspections 18-13

18-21. Management Reviews 18-14

18-22. Financial Statement Reviews 18-14

18-23. Workouts 18-14

18-24. Foreclosures 18-14

18-25. Property Disposition 18-15

18-26. Sanctions 18-15

18-27. Communication 18-15

CHAPTER 19. ENVIRONMENTAL ISSUES

SECTION 1. LEAD-BASED PAINT

19-1. Introduction 19-1

19-2. Applicability 19-2

19-3. Program Requirements 19-2

19-4. Elevated Blood Level (EBL) Child 19-5

19-5. Testing for Lead-Based Paint 19-5

19-6. Abatement of Lead-Based Paint 19-6

19-7. Developing an Abatement Strategy 19-8

19-8. Funding the Testing and Abatement Processes 19-9

19-9. Flexible Subsidy Requirements 19-9

19-10. Legal Expenses 19-9

19-11. Other Informational Resources 19-9

SECTION 2. ASBESTOS

19-12. Asbestos 19-10

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SECTION 3. POLYCHLORINATED BIPHENYLS (PCB)

19-13. Polychlorinated Biphenyls 19-10

SECTION 4. UNDERGROUND STORAGE TANKS (UST)

19-14. Underground Storage Tanks 19-11

CHAPTER 20. HISTORIC PRESERVATION

20-1. Historic Preservation Review 20-1

20-2. Review Requirements 20-1

20-3. Contacting the State

Historic Preservation Officer 20-2

20-4. Historic Preservation and Handicap Accessibility 20-2

CHAPTER 21. INSURANCE AND LOSS DRAFTS

SECTION 1. INTRODUCTION

21-1. General 21-1

21-2. Chapter Highlights 21-1

21-3. Glossary 21-2

SECTION 2. REQUIRED INSURANCE FOR ALL HUD-INSURED AND

HUD-HELD MULTIFAMILY PROJECTS

21-4. HUD-Insured and HUD-Held Projects 21-11

21-5. Section 202 Projects 21-13

21-6. Recommended Insurance for HUD-Insured,

Co-Insured, and HUD-Held Projects 21-14

21-7. Mortgagee or HUD Requirements to Assure

Adequate Insurance is in Place 21-14

SECTION 3. OPTIONAL INSURANCE OR ADDITIONAL LEVELS OF

COVERAGE WHICH MAY BE CONSIDERED FOR ALL

HUD-INSURED, CO-INSURED AND HUD-HELD PROJECTS

21-8. Individual Project Circumstances 21-15

21-9. Examples of Additional Types of Insurance 21-16

21-10. Other Insurance Issues 21-16

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SECTION 4. ASSURING CONTINUING AND ADEQUATE COVERAGE

21-11. Insurable Value 21-17

21-12. Monitoring Receipt of Policies and

Certificates of Insurance 21-17

21-13. Notice of Unavailability of Insurance 21-18

21-14. Reviewing Coverage to Compare with HUD

Requirements for HUD-Held Projects 21-19

21-15. Cost of Insurance 21-20

SECTION 5. LOSS SETTLEMENT DRAFTS

21-16. Definition of Loss Settlement Drafts 21-20

21-17. Mortgagee and Mortgagor Responsibility

for Restoration of Property 21-21

21-18. HUD-Held Projects with Work Out Agreements

in Effect 21-22

21-19. Endorsement 21-22

APPENDICES

Appendix-1. Sample Insurance Review Checklist 21-23

Appendix-2. Sample Letter to Mortgagors Re: Guidance

on Costs of Insurance 21-25

Appendix-3. Sample Letter to Mortgagors Re: Changes in

Insurance Requirements 21-26

Appendix-4. Insurance Commissions 21-27

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CHAPTER 22. PREPAYMENTS AND VOLUNTARY TERMINATIONS

SECTION 1. INTRODUCTION

22-1. General 22-1

22-2. Applicability 22-1

22-3. Glossary 22-4

SECTION 2. REQUESTS FOR TERMINATION OF MORTGAGE INSURANCE

22-4. Notification by Mortgagor 22-5

22-5. Preparation of Form HUD-09807 22-5

SECTION 3. TERMINATION WHEN RESTRICTIONS EXIST

22-6. Mortgagee Requests HUD Approval 22-6

22-7. Moderate Prepayment Restrictions 22-6

22-8. Section 207/223(f) Insurance Program 22-6

22-9. Headquarters Actions 22-7

22-10. HUD Authorizes Prepayment 22-7

22-11. Prepayment Penalties 22-8

22-12. Mortgagor Requests HUD's Override 22-9

22-13. HUD Actions Regarding Overrides 22-9

SECTION 4. PREPAYMENTS AND TERMINATIONS WHEN THERE ARE NO

RESTRICTIONS

22-14. Completion of Form HUD-9807 22-9

SECTION 5. EFFECT OF PREPAYMENT ON HAP CONTRACTS

22-15. Terms and Conditions Remain in Force 22-9

22-16. Effect of Debt Service on Rental Rates 22-10

22-17. Comparability 22-10

APPENDICES

Appendix-1. Form HUD-9807, Request for Termination of

Multifamily Mortgage Insurance 22-11

Appendix-2. Rental Use Agreement 22-13

CHAPTER 23. REAL ESTATE ASSESSMENT AND APPEAL

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SECTION 1. INTRODUCTION

23-1. Impact of Real Estate Taxes 23-1

23-2. Overview of Owners' Responsibilities 23-1

SECTION 2. OWNER RESPONSIBILITIES

23-3. Accounting Procedures 23-1

23-4. Prompt Payment of Taxes 23-1

23-5. Tax Review and Appeal 23-1

23-6. Professional Assistance in Appeals Process 23-3

23-7. Rent Increase Requests 23-4

23-8. Cash Refunded to the Property 23-4

SECTION 3. FIELD OFFICE RESPONSIBILITIES

23-9. General 23-4

23-10. Income and Expense Analysis 23-4

23-11. Rent Increase Requests 23-5

SECTION 4. THE TAX PROCESS

23-12. Basic Factors 23-6

23-13. Types of Appraisals 23-6

23-14. Types of Tax Reductions 23-8

SECTION 5. APPEAL OF REAL ESTATE ASSESSMENTS

23-15. General Information 23-9

23-16. Basis of Appeal 23-9

23-17. Appeal Assumptions 23-10

CHAPTER 24. OPERATING LOSS LOANS

24-1. Introduction 24-1

24-2. General information - Operating Loss Loans 24-1

A. Eligibility of the Mortgagor 24-1

B. Definition of an Operating Loss Loan 24-2

24-3. Preliminary Discussions for Operating Loss Loan 24-2

24-4. Field Office Processing of Formal Application 24-2

CHAPTER 25. RESIDUAL RECEIPTS

25-1. Applicability 25-1

25-2 Definition 25-1

25-3. Calculation of Residual Receipts 25-2

25-4. Depositing Residual Receipts 25-2

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25-5 Holding and Investing Funds 25-3

25-6 Combined Investments 25-3

25-7 Mortgagee Charges for Investments 25-4

25-8 Other Fees 25-4

25-9 Capital Resources 25-4

25-10 Section 8, Special Considerations 25-6

25-11 Section 8, Other Considerations 25-6

25-12 Residual Receipts Notes 25-7

CHAPTER 26. GENERAL OPERATING RESERVE

Section 1. GENERAL

26-1 Introduction 26-1

26-2 Eligibility of Mortgagors 26-2

26-3 Background Information 26-2

Section 2. TECHNICAL REQUIREMENTS

26-4 Funding Requirement 26-3

26-5 Replacement of Withdrawals 26-4

26-6 Account Maintenance and Investment 26-4

CHAPTER 27. SECTION 202 DEBT SERVICE RESERVE

27-1 Introduction 27-1

27-2 Eligibility of Mortgagor 27-1

27-3 Technical Funding Requirement 27-1

CHAPTER 28. SPECIAL ESCROW

Section l. CHAPTER OVERVIEW AND PURPOSE

28-1 Introduction and General Use 28-1

Section 2. PRE-FINAL ENDORSEMENT ESCROWS

28-2 Operating Deficit Escrow 28-2

Section 3. POST FINAL ENDORSEMENT ESCROWS

28-3 Repair Escrows 28-3

28-4 Escrow of the owner contribution 28-3

28-5 Escrow of a deed to the property 28-3

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SECTION 4. MONITORING ESCROWS

28-6. Monitoring Requirements 28-3

SECTION 5. LETTER OF CREDIT REQUIREMENTS FOR POST FINAL

ENDORSEMENT ESCROWS

28-7. The Letter of Credit (LOC) 28-4

CHAPTER 29. CONVERSION TO COOPERATIVE OWNERSHIP

29-1. Introduction 29-1

29-2. General 29-1

29-3. Consent, Submission and Review Requirements 29-2

29-4. How Proposals are Structured: Technical

Requirements 29-3

CHAPTER 30. CONVERSION TO CONDOMINIUM OWNERSHIP

30-1. Introduction 30-1

30-2. General 30-1

30-3. Example 30-1

30-4. How a Conversion Works 30-2

30-5. General Provisions: Eligibility of

Projects and Consent Requirements 30-2

30-6. Specific Technical Requirements and Thresholds 30-4

30-7. Submission and Review Procedures 30-5

CHAPTER 31. MANDATORY MEALS

SECTION 1. GENERAL

31-1. Applicability 31-1

31-2. Not Applicable 31-2

SECTION 2. MANAGEMENT OF THE MEALS PROGRAM

31-3. Lease Provisions 31-3

31-4. Charges for Meals Paid by Tenants 31-3

31-5. Tenants who are Permanently or Temporarily

Incapacitated 31-4

31-6. Mandatory Exemptions 31-4

31-7. Discretionary Exemptions 31-6

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SECTION 3. PROGRAM ADMINISTRATION

31-8. Increases in Charges to Tenants Must be

Approved by HUD 31-6

31-9. Nutritional Standards 31-7

31-10. Prohibition Against Discrimination 31-7

31-11. Cost of Meals 31-8

31-12. Limiting the Cost of Meals 31-8

31-13. Accounting Requirements 31-9

31-14. Operating Surpluses From the Meals Program 31-9

31-15. Use of Contract Services 31-9

SECTION 4. FIELD OFFICE REVIEW OF MEAL CHARGES AND

NONCOMPLIANCE

31-16. The Field Offices' Review of an Increase in

Tenant charges 31-10

31-17. Material Noncompliance 31-10

31-18. Withdrawal of the Approval of the

Mandatory Meal Program 31-11

31-19. Appeal Process 31-11

CHAPTER 32. PETS

SECTION 1. GENERAL INFORMATION

32-1. Applicability 32-1

32-2. Not Applicable 32-2

32-3. Exclusion for Animals that Assist

the Handicapped 32-2

32-4. Prospective Tenant's Rejection of a Unit 32-3

32-5. Notice of Refusal to Register a Pet 32-3

SECTION 2. HOUSE PET RULE VIOLATION

32-6. Notice of House Pet Rule Violation 32-4

32-7. Pet Rule Violation Meeting 32-4

32-8. Initiation of Procedures to Terminate

a Pet Owner's Tenancy 32-5

32-9. Notice of Pet Removal 32-5

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SECTION 3. PROCEDURES FOR DEVELOPMENT OF HOUSE PET RULES

32-10. Procedures 32-6

32-11. Amendment of House Pet Rules 32-7

SECTION 4. HOUSE PET RULES

32-12. Mandatory House Pet Rules 32-7

32-13. Reasons an Owner/Agent May Refuse to admit

a Pet into the Project 32-9

32-14. Discretionary House Pet Rules 32-10

32-15. House Pet Rules may not Prescribe 32-12

32-16. Service of Notice 32-12

SECTION 5. REFUNDABLE DEPOSITS FOR PETS

32-17. Collection of Pet Deposits From Tenants 32-13

32-18. Increasing the Amount of the Pet Deposit 32-15

32-19. Pet Deposit May be Used to Pay

Reasonable Expenses 32-15

32-20. Refund of the Pet Deposit to the Tenant 32-15

SECTION 6. LEASE PROVISIONS

32-21. Lease Provisions for pets 32-16

32-22. Lease Provisions for Inspections 32-16

32-23. Health and Safety Lease Provisions 32-16

SECTION 7. PROTECTION OF A PET

CHAPTER 33. SPECIAL MANAGEMENT AND SERVICING OF SINGLE ROOM

OCCUPANCY PROJECTS

SECTION 1. INTRODUCTION

33-1. Purpose of the Single Room Occupancy Program 33-1

33-2. General 33-1

33-3. Processing Project Applications 33-1

33-4. Civil Rights Requirements 33-3

SECTION 2. PROGRAM ADMINISTRATION

33-5. Occupancy 33-3

33-6. Special Program Requirements 33-4

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SECTION 3. CALCULATING SPECIAL RENT INCREASES FOR AAF RENTS

34-3. Purpose 34-4

34-4. Types of Special Rent Increases 34-4

34-5. The Consideration of Special Adjustments for

Property Taxes, Insurance and Utilities 34-4

34-6. Processing the Request for Special Adjustments 34-6

34-7. Processing the Approved Special Adjustment and

Calculating the Effect on Tenant Rents 34-8

34-8. Backing Out of Previously Approved Special

Rent Increases 34-8

APPENDICES

Appendix-1. Sales Analysis

Foreclosure/HUD-Owned Project 34-9

Appendix-2. Form HUD-9833B 34-11

Appendix-3. Rate Sheet 34-12

Appendix-4. Sample Certification 34-14

CHAPTER 35. SMOKE DETECTORS

35-1. Applicability 35-1

35-2. Clarification on Applicability 35-1

35-3. Basic Requirements 35-3

35-4. Clarification on What Constitutes a "Level:"

Instructions for Basements and Attics 35-4

35-5. Owners' Responsibilities 35-5

35-6. Residents' Responsibilities 35-8

35-7. Funding Smoke Detectors 35-8

35-8. Impact of State Law and/or Local Housing

Codes and Ordinances 35-9

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