On October 28, 2016, HUD issued Housing Notice H 2016-16
, which implements provisions enacted by Congress in December 2015 that allow owners of LIHPRHA developments to access residual receipts and eliminate limitations on distributions.
Property owners must apply to the HUD Regional Center or Satellite Office in order to amend the existing LIHPRHA Use Agreement and take advantage of these provisions. The Notice sets forth the procedures and requirements for this submission, which include:
- REAC score of 60+
- Satisfactory Management Review score
- No Fair Housing violations
- Updated Affirmative Fair Housing Marketing Plan
- Current Annual Financial Submissions for the last three (3) years
- Current Excess Income Reports for last seven (7) years
- No compliance or regulatory "Flags"
- If FHA insured mortgage, current status for three (3) years
- No other outstanding defaults or violations
By statute, a current Capital Needs Assessment must also be submitted in order to access funds in the residual receipts account.
Upon approval of a submission, HUD will amend the existing LIHPRHA Use Agreement, and the amended and restated Use Agreement will be reviewed by HUD's Office of General Counsel at both the local and national offices.