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Catalog of Federal Domestic Assistance

Program Descriptions

14.199:  Multifamily Property Disposition

Objectives:  To manage and dispose of multifamily housing projects that are owned by the Secretary or that are subject to a mortgage held by the Secretary in a manner that is consistent with the National Housing Act; protect the financial interests of the Federal government, and will, in the least costly fashions among reasonable available alternatives: preserve certain housing so that it can remain available to and affordable by low-income persons; preserve and revitalize residential neighborhoods; maintain the existing housing stock in a decent, safe and sanitary condition; minimize the involuntary displacement of tenants; maintain housing for the purpose of providing rental housing, cooperative housing, and home ownership opportunities for low-income persons; supporting fair housing strategies; and dispose of such projects in a manner consistent with local housing market conditions.

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

14.199 ELIGIBILITY REQUIREMENTS:

14.199 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  None. This program is excluded from coverage under E. O. 12372.

Application Procedure:  Foreclosure sales are conducted on an open, oral bid process, with sealed bids also being permitted. HUD-owned properties can be purchased, without competition, by governmental entities. HUD can negotiate the sale of some properties to non-profits. All other HUD-owned properties are sold through a full and open competition, usually sealed bids or auctions. HUD maintains a mailing list of individuals and firms interested in buying these projects, and maintains a website which lists all properties currently available for sale.

Award Procedure:  Properties sold at foreclosure are sold to the highest responsive and responsible bidder. HUD-owned projects can be sold to governmental entities who agree to meet HUDs requirements. HUD-owned projects can be sold to non-profits who agree to meet HUDs requirements. HUD-owned properties can be sold to the highest responsive and responsible bidder, and some are sold for a nominal amount to the proposer with the best experience and plan for the future operation of the property.

Deadlines:  Deadlines are established on a case-by-case.

Range of Approval/Disapproval Time:  Contingent upon complexity of case.

Appeals:  None.

Renewals:  Renewals of the Section 8 are subject to the rules of the particular program. There are no renewals of Up-Front Grants.

Criteria for Selecting Proposals:  For the up-front grants, once HUD identifies an eligible project, the grant is made part of the sale and the project is only sold to a purchaser who has the demonstrated experience to rehabilitate/rebuild the project and maintain it as affordable housing for at least 20 years.

Examples of Funded Projects:  Not applicable.

Range and Average of Financial Assistance:  Not applicable.

14.199 RELATED PROGRAMS:

• 14.195 Section 8 Housing Assistance Payments Program: Special Allocations;
• 14.871 Section 8 Housing Choice Voucher.

14.199 PROGRAM ACCOMPLISHMENTS:

14.199 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  OFFICE OF HOUSING, OFFICE OF MULTIFAMILY HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Type of Assistance:  Sale, Exchange, or Donation of Property and Goods.

Obligations:  (Sales) FY 99 $7,360,000; FY 00 est $10,000,000; and FY 01 est $10,000,000.

Budget Account Number:  86-4072-0-1-371; 86-4077-0-1-371.

Authorization:  National Housing Act, Sections 207(k) and (l); Housing and Community Development Amendments of 1978, Section 203; Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Act of 1997, Section 204, Public Law 104-204; Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Act of 1998, Section 213, Public Law 105-65; Departments of Veterans Affairs, Housing and Urban Development, Section 206, and Independent Agencies Appropriations Act of 1999, Public Law 105-276, Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Act of 2000, Section 537, Public Law 106-74.

Regulations, Guidelines, and Literature:  Reference material can be found at website www.hud.gov/fha/mfh/pd/multifam.html.

14.199 INFO CONTACTS:

Regional or Local Office:  Interested parties can contact the Property Disposition Centers in the Atlanta and Fort Worth HUD Offices listed in Appendix IV of the Catalog.

Headquarters Office:  Marc Harris, Department of Housing and Urban Development, Office of Housing, Multifamily Housing Programs, Office of Portfolio Management, Room 6120, 451 7th Street, SW., Washington, DC 20410. Phone: (202) 708-0614, extension 2680.

(See Appendix IV for more contact info.)

14.199 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  None.

Length and Time Phasing of Assistance:  None.

Uses and Use Restrictions:  A property can be sold with its current project-based Section 8 contract assigned to the new owner so that contract and its requirements stay in place. A property can be sold with tenant-based Housing Choice Vouchers (14.871) being provided to eligible tenants, which give the tenants the ability to stay on-site in units that meet HUD standards, or move to another location. In both cases, the residents must meet the eligibility requirements of those programs, which are defined elsewhere. A property can be sold with an up-front grant to assist in paying for rehabilitation or rebuilding. To be eligible, the property must be HUD-owned, and: has more than 50% of the units in the project occupied by very low-income residents at the time a disposition plan is approved by HUD, or that HUD determines is essential, as affordable housing, to the revitalization of its community; is located in a housing market or submarket in which there is not sufficient habitable, affordable, rental housing, as defined in 24 CFR 290.3; will generate, after rehabilitation or rebuilding, sufficient rental income in a competitive market to cover all operating expenses, meet after sale debt service requirements, fund required reserves and throw off positive cash flow; will provide affordable housing for at least 20 years or the term of the loan, whichever is shorter, after the rehabilitation and/or rebuilding is completed; meets such other requirements, including deed restrictions, loan provisions, and monetary penalties for non-performance, as HUD may determine are appropriate on a case-by-case basis. The maximum that HUD will fund per project in an up-front grant or loan is 50 percent of total development cost (TDC), or $40,000 per affordable, finished unit, whichever amount is less.

14.199 POST ASSISTANCE REQUIREMENTS:

Reports:  Reporting requirements established by Property Disposition Centers.

Audits:  None.

Records:  None.