[Federal Register Volume 61, Number 134 (Thursday, July 11, 1996)]
[Notices]
[Pages 36561-36563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17638]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4099-N-02]


Office of Housing; Submission for OMB review: comment request

AGENCY: Office of the Assistant Secretary for Housing, HUD.

ACTION: Notice.

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SUMMARY: The proposed information collection requirement described 
below has been submitted to the Office of Management and Budget (OMB) 
for emergency review, as required by the Paperwork Reduction Act. The 
Department is soliciting public comments on the subject proposal.

DATES: Comments due date July 18, 1996.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposal. Comments must be received within seven (7) days from the 
date of this Notice. Comments should refer to the proposal by name and/
or OMB approval number and should be sent to: Joseph F. Lackey, Jr., 
OMB Desk Officer, Office of Management and Budget, Room 10235, New 
Executive Office Building, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT:
Kay F. Weaver, Reports Management Officer, Department of Housing and 
Urban Development, 451 7th Street, Southwest, Washington, D.C. 20410, 
telephone (202) 708-0050. This is not a toll-free number. Copies of the 
proposed forms and other available documents submitted to OMB may be 
obtained from Ms. Weaver.
    The Notice is soliciting comments from members of the public and 
affecting agencies concerning the proposed collection of information 
to: (1) evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including weather the information will have practical utility; (2) 
evaluate the accuracy of the agency's estimate of the

[[Page 36562]]

burden of the proposed collection of information; (3) enhance the 
quality, utility, and clarity of the information to be collected; and 
(4) minimize the burden of the collection of information on those who 
are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    This Notice also lists the following information:
    Title of Proposal: Mark to Market/Portfolio Reengineering, 
Demonstration Program Guidelines Proposal, Submission Requirements and 
Processing.
    OMB Control Number: 2502-xxxx.
    Description of the need for the information and proposed use: This 
notice describes the application and processing procedures for a 
demonstration program that is designed to restructure the financing of 
projects that have FHA-insured mortgages and that receive section 8 
rent assistance. The purpose of this Congressionally authorized 
demonstration is to test the feasibility and desirability of 
multifamily projects meeting their financial and other obligations with 
or without FHA insurance and/or Section 8 assistance. In negotiating 
agreements with eligible project owners, HUD must act to protect the 
financial interests of the federal government, while taking into 
account the need for assistance of low- and very low-income tenants. 
HUD anticipates that, over time, it will publish additional guidance 
that reflects the experience derived through the execution of 
successful agreements with project owners.

I. Background

    The demonstration, title FHA Multifamily Demonstration Authority, 
is authorized by Section 210 of the Balanced Budget Down Payment Act, 
II (Pub. L. No. 104-134, 110 Stat. 1321, April 26, 1996). It reflects 
concern of both the Congress and the Administration about budgetary 
costs and social issues associated with the renewal of Section 8 
project-based assistance contracts on multifamily properties having 
FHA-insured mortgages.
    Section 210 of the Balanced Budget Act provides HUD with a number 
of special tools (i.e., departures from many laws that would ordinarily 
apply), enabling HUD to restructure the financing of projects, while 
protecting the interest of tenants.

II. HUD Processing of Reengineering Proposals

    A. Owners will submit proposals to George Dipman at the address 
below with a copy of the Multifamily Housing Director in the local HUD 
Field Office having jurisdiction over the property(ies) contained in 
the proposal: George C. Dipman, Office of Multifamily Housing, U.S. 
Department of Housing and Urban Development, 451 Seventh Street, S.W. 
(Room 6174), Washington, D.C. 20410-4000.
    B. Once received, HUD will process according to the following 
steps:
    1. Proposal will be dated, logged in and given a process locating 
number;
    2. Proposal will be reviewed to determine that it meets threshold 
qualifying requirements and for completeness;
    3. Substantially complete proposals will be assigned to a 
reengineering project manager who will be the initial liaison with the 
owner;
    4. The project manager will work with the owner to refine the 
proposal for conceptual review. The manager may work independently or 
in conjunction with HUD consultants;
    5. Approximately 30 days after receipt of a substantially complete 
proposal, the project will be presented to an internal HUD headquarters 
reengineering committee for conceptual review.
    6. The reengineering committee will consider the following in 
determining whether to recommend for final negotiation and processing:
    a. compliance with basic project eligibility criteria;
    b. adequacy of proposal vis a vis the submission requirements;
    c. whether proposal ``fits'' within demonstration authorities/
tools;
    d. whether proposal satisfies requirements of the demonstration 
program and its program principles;
    e. determination cost of the proposed transaction under the Credit 
Reform Act of 1990.
    C. Conceptual review will result in one of three courses of action: 
rejection; return for clarification; or recommended for restructuring. 
If the project is recommended for restructuring, it will be referred 
either to a HUD staff person or HUD consultant for processing, or 
bundled (with the consent of the owner) with other projects for 
resolution by a third party joint-venture partner.
    D. All projects, regardless of the implementing vehicle, will 
return to the reengineering review committee for final approval once 
terms are agreed to and due diligence is completed.
    E. Projects with final approval will be referred back to the 
appropriate staff, consultants or third parties for closing.

III. Submission Requirements

    On behalf of eligible properties, owners or their agents must 
provide the following information. This information is to be in summary 
format and is intended for conceptual review only. After conceptual 
approval, more detailed information and associated due diligence will 
be required.
    1. Basic project information
    a. project name and address and photos;
    b. number of units (total and assisted) together with a breakdown 
of unit sizes; fair markets rents, estimated market rents and contract 
rents on a monthly per unit basis;
    c. owner name and address and outline of ownership structure;
    d. management agent name and address;
    e. lender name and address;
    f. servicer name and address;
    g. FHA and Section 8 project identification numbers;
    2. FHA Mortgage Information
    a. type of FHA Insurance;
    b. date of endorsement and term/maturity date;
    c. interest rate and interest subsidy, if any;
    d. original mortgage amount and latest unpaid balance;
    e. monthly principle and interest payments;
    f. account status, current (Y/N), amount of arrearage, if any;
    g. liens included taxes or title issues;
    h. current balance of accumulated residual receipts, if any;
    e. number of Section 8 contracts in effect;
    j. basis for calculating contract rents levels budget based, annual 
adjustment factor, factored rents, other
    k. tenant paid component of rents;
    1. current occupancy;
    m. year to date operating statement.
    3. Physical Description and Neighborhood
    a. summary description of construction and development type, 
physical condition, title or environmental issues;
    b. description of financial condition, and market position;
    c. occupancy profile, including: income, family size, senior/
disabled component, residents, employment status, etc.;
    d. description of the neighborhood including physical, social 
services, public safety and school characteristics;
    e. rental market description and trends (improving, stable 
deteriorating) for assisted and unassisted projects;
    4. Description of reengineering proposal

[[Page 36563]]

    a. target market, long term affordability commitments, and 
transition plan;
    b. rehabilitation requirements including market enhancement and 
cost estimates;
    c. principle reduction;
    d. new financing source and terms;
    e. proforma with 15 year cashflow; discuss major assumptions, i.e. 
rent and expense decreases, vacancy, turnover, relocation, debt service 
and reserves. Important ratios will be expense ratio, debt coverage, 
loan to value;
    f. sources and uses of reengineering financing including equity, 
interim financing, permanent financing, local government assistance, 
etc.;
    g. type and term of tenant assistance required (project based or 
voucher)
    h. consents of partners required to participate.

SUPPLEMENTARY INFORMATION: The Department has submitted the proposal 
for the collection of information, as described below, to OMB for 
emergency review, as required by the Paperwork Reduction Act (44 U.S.C. 
Chapter 35). July 9, 1996 is requested for OMB approval.

    Authority: Section 3507 of the Paperwork Reduction Act of 1995, 
44 U.S.C. 35, as amended.

    Dated: July 3, 1996.
David S. Cristy,
Acting Director, Information Resources Management Policy and Management 
Division.

Notice of Submission of Proposed Information Collection to OMB

    Title of Proposal: Mark to Market/Portfolio Reengineering, 
Demonstration Program Guidelines Proposal, Submission Requirements and 
Processing.
    Office: Office of the Assistant Secretary Housing-Federal Housing 
Commissioner.
    OMB Approval Number: 2502-xxxx.
    Description of the Need for the Information and Its Proposed Use: 
This information is required from projects that have FHA-insured 
mortgages and that receive Section 8 rent assistance. This notice 
describes the application and processing procedures for a demonstration 
program that is designed to restructure the financing of the projects. 
The demonstration is to test the feasibility and desirability of 
multifamily projects meeting their financial and other obligations with 
or without FHA insurance and/or Section 8 assistance.
    Form Number: None.
    Respondents: 200.
    Frequency of Submission: Once.
    Reporting Burden:

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                                           Number of            Frequency of          Hours per         Burden  
                                          respondents     x       response      x     response     =     hours  
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                                                   200   ...               1   ...           80   ..     16,000 
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    Total Estimated Burden Hours: 16,000.
    Status: New collection.
    Contact: George C. Dipman, HUD, (202) 708-0614, extension 2574; 
Joseph F. Lackey, Jr., OMB, (202) 395-7316.

    Dated: July 3, 1996.

[FR Doc. 96-17638 Filed 7-10-96; 8:45 am]
BILLING CODE 4210-27-M