Grant Community.com

Catalog of Federal Domestic Assistance

Program Descriptions

14.164:  Operating Assistance for Troubled Multifamily Housing Projects

Popular Name:  Flexible Subsidy Fund; Troubled Projects

Objectives:  To provide loans to restore or maintain the physical and financial soundness, to assist in the management and to maintain the low-to moderate-income character of certain projects assisted or approved for assistance under the National Housing Act or under the Housing and Urban Development Act of 1965.

PROGRAM AND AWARD	FINANCIAL AND INFORMATION CONTACTS
ELIGIBILITY REQUIREMENTS	FINANCIAL AND ADMINISTRATIVE INFO.
APPLICATION AND AWARD PROCESS	INFORMATION CONTACTS
RELATED PROGRAMS	ASSISTANCE CONSIDERATIONS
PROGRAM ACCOMPLISHMENTS	POST ASSISTANCE REQUIREMENTS

14.164 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Eligible owners are nonprofit, cooperative owners with existing loans from HUD under the Section 202 program. Public bodies do not qualify for this program. Field Offices recommend projects to be assisted.

Beneficiary Eligibility:  Tenants will benefit because this will allow decent, safe and sanitary conditions in projects. Additionally, this program will guarantee good management in those projects selected.

Credentials/Documentation:  Documentation regarding the characteristics of the property and the qualifications of managing agents and owners are assembled by the owners and submitted to the Field Office. This program is excluded from coverage under OMB Circular No. A-87.

14.164 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  Assurance must be gained from the appropriate unit of local government that essential services will be provided to the project; the real estate taxes will be assessed in a manner consistent with normal assessment procedures; and that assistance is not inconsistent with local plans and priorities. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372.

Application Procedure:  In Fiscal Year 1999 and for FY 2000 HUD only uses limited Flexible Subsidy funds available for Section 202 projects for the elderly or disabled in occupancy for more than 15 years with emergency health care and safety needs.

Award Procedure:  First-come, first served.

Deadlines:  Funds are awarded until exhausted.

Range of Approval/Disapproval Time:  None.

Appeals:  Not applicable.

Renewals:  Not applicable.

Criteria for Selecting Proposals:  Assistance will be granted only if: (1) that assistance, in concert with one or more other relief tools, will restore or maintain physical and financial soundness and the low-or moderate-income nature of the project; (2) this assistance is less costly to the Federal government than any other available; (3) the project owner, except for nonprofit projects, agrees to provide assistance to the project; (4) the project can be made structurally sound with this assistance; (5) the project management is at least satisfactory; and (6) the project is operated and managed in accordance with the terms of the Management Improvement and Operation (MIO) Plan which is designed to reduce the operating costs of the project.

Examples of Funded Projects:  Section 202 projects for the elderly or disabled with emergency health and safety problems whose sponsors do not have the necessary funds available to cure the immediate problems.

Range and Average of Financial Assistance:  See Uses and Use Restrictions.

14.164 RELATED PROGRAMS:

None.

14.164 PROGRAM ACCOMPLISHMENTS:

For fiscal year 1999, 27 Section 202 projects received funding totaling $16,941,000. For fiscal year 2000, thus far nine projects are approved to receive funding totaling $3,500,000. About $10,000,000 remains.

14.164 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Type of Assistance:  Direct Payments for Specified Use.

Obligations:  FY 99 $17,794,989; FY 00 est $16,947,000; and FY 01 est $17,684,000.

Budget Account Number:  86-4044-0-3-604.

Authorization:  Housing and Community Development Amendments of 1978, as amended, Public Law 95-557, 12 U.S.C. 17152-1.

Regulations, Guidelines, and Literature:  24 CFR part 219, HUD Handbook 4355.1.

14.164 INFO CONTACTS:

Regional or Local Office:  Multifamily Hub or Processing Center Project Management Team Leader. See listing in Appendix IV of the Catalog.

Headquarters Office:  Director, Office of Portfolio Management, Department of Housing and Urban Development, Washington, DC 20420. Phone: (202) 708-3730. Use the same number for FTS.

(See Appendix IV for more contact info.)

14.164 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  No contribution is required for nonprofit sponsors.

Length and Time Phasing of Assistance:  Generally on a monthly basis. Operating Assistance is usually for a one year period and is paid according to pre-approved work schedule. Capital Improvement Loan proceeds are disbursed until construction is completed.

Uses and Use Restrictions:  Flexible Subsidy funds can be lent to eligible projects in an amount based on the project's total needs. It may be used to correct physical deficiencies resulting from deferral of regular maintenance; to reduce deficiencies in replacement reserve funds; and to fund operating deficits. Flexible Subsidy assistance is limited to projects assisted under Section 236 or Section 221 (d) (5) of the National Housing Act; those assisted under Section 101 of the HUD Act of 1965 (Rent Supplement) or when the Section 101 assistance has been converted to Section 8 Loan Management Set Aside (LMSA); direct loans at below market interest rates made under Section 202 of the Housing Act of 1959; housing assistance payments made under Section 23 of the U.S. Housing Act of 1937 or Section 8 of the U.S. Housing Act of 1937 after conversion from assistance under the Section 236 Rental Assistance Payments Program or the Rent Supplement Program. Some of the Flexible Subsidy resources are being used in connection with Safe Neighborhood Action Plans.

14.164 POST ASSISTANCE REQUIREMENTS:

Reports:  Quarterly assessment and review of owner performance. Monthly reporting of individual disbursements and action items. Periodic on-site visits.

Audits:  Federal audits will be made in accordance with the policies of FMC 73-2 to ensure that funds have been applied efficiently, economically, and effectively.

Records:  Owner keeps all records relating to MIO Plan transactions for at least 5 years. Field Office retains all records relating to assistance for 5 years.