[Federal Register Volume 74, Number 237 (Friday, December 11, 2009)]
[Notices]
[Pages 65781-65783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-29531]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5373-N-01]


Notice of Sale of HUD-Held Multifamily and Healthcare Loans

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

ACTION: Notice of sale of Secretary-held mortgage loans.

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SUMMARY: This notice announces HUD's intention to sell certain 
unsubsidized Healthcare and unsubsidized Multifamily mortgage loans, 
without Federal Housing Administration (FHA) insurance, through several 
different sales activities. This notice also generally describes the 
process for bidding on loans and defines certain persons who are 
eligible and ineligible to bid. The sales activities announced by 
today's Federal Register Notice include direct sales of Multifamily 
notes to units of local government, a competitive sale of Healthcare 
notes on December 16th and a competitive sale of Multifamily notes that 
will be scheduled for a later date.

DATES: The sales of the direct loans to units of local government will 
close by December 16, 2009. The Bidder's Information Package (BIP) for 
the competitive sale of the Healthcare notes was made available to 
qualified bidders on or about November 20, 2009. Bids for Healthcare 
loans must be submitted on the bid date, which is currently scheduled 
for December 16, 2009. HUD anticipates that awards of the

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Healthcare loans will be made by December 17, 2009. Closings for the 
Healthcare loans are expected to take place between December 21, 2009 
and December 22, 2009. Dates for the competitive Multifamily loan sale 
are pending.

ADDRESSES: To become a qualified bidder and receive the BIP, 
prospective bidders must complete, execute, and submit a 
Confidentiality Agreement and a Qualification Statement acceptable to 
HUD. Both documents will be available on the HUD Web site at http://www.hud.gov/offices/hsg/comp/asset/mfam/mhls.cfm. Please mail and fax 
executed documents to KDX Ventures: KDX Ventures, c/o The Debt 
Exchange, 133 Federal Street, 10th Floor, Boston, MA 02111, Attention: 
Loan Sale Coordinator, Fax: 1-617-531-3499.

FOR FURTHER INFORMATION CONTACT: John Lucey, Deputy Director, Asset 
Sales Office, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room 3136, Washington, DC 20410-8000; telephone 202-708-
2625, extension 3927. Hearing- or speech-impaired individuals may call 
202-708-4594 (TTY). These are not toll-free numbers.

SUPPLEMENTARY INFORMATION: HUD announces its intention to sell certain 
unsubsidized mortgage loans (Mortgage Loans) secured by Multifamily and 
Healthcare properties located throughout the United States. The 
Mortgage Loans are comprised primarily of non-performing mortgage 
loans. A listing of the loans to be sold directly to units of local 
government will be provided upon request. A final listing of the 
Mortgage Loans for the competitive Healthcare sale will be included in 
the BIP. The Mortgage Loans will be sold without FHA insurance and with 
servicing released. HUD will offer qualified bidders an opportunity to 
bid competitively on the Mortgage Loans.
    For the future Multifamily note sale, the Mortgage Loans will be 
stratified for bidding purposes into several mortgage loan pools, 
including pool(s) only offered to not-for-profit organizations and 
units of State and Local Government. Each pool will contain Mortgage 
Loans that generally have similar performance, property type, 
geographic location, lien position and other characteristics. Qualified 
bidders may submit bids on one or more pools of Mortgage Loans or may 
bid on individual loans.
    For both the Healthcare and the Multifamily competitive sales, a 
mortgagor who is a qualified bidder may submit an individual bid on its 
own Mortgage Loan. Interested Mortgagors should review the 
Qualification Statement to determine whether they may be eligible to 
qualify to submit bids.
    The Bidding Process: The BIP will describe in detail the procedure 
for bidding in the competitive Healthcare loan sale. The BIP will also 
include a standardized non-negotiable loan sale agreement (Loan Sale 
Agreement). For the competitive Healthcare loan sale, bids will be 
accepted on December 16th. Bidders are required to wire a deposit for 
their loan bids, prior to the close of bidding. Deposits are calculated 
based upon each bidder's aggregate bid price. For an aggregate bid 
price greater than or equal to one hundred thousand dollars ($100,000), 
each bidder must submit a deposit equal to the greater of: (a) One 
hundred thousand dollars ($100,000); or (b) ten percent (10%) of its 
bid price. In the event the bidder's aggregate bid price is less than 
$100,000, the minimum deposit shall not be less than fifty percent 
(50%) of its bid price.
    HUD will evaluate the bids submitted and determine the successful 
bids, in terms of the best value to HUD, in its sole and absolute 
discretion.
    If a bidder is successful, the bidder's deposit will be non-
refundable and will be applied toward the purchase price. Deposits will 
be returned to unsuccessful bidders. Closings are expected to take 
place between December 21, 2009 and December 22, 2009. A similar format 
will be used for the future Multifamily loan sale.
    These are the essential terms of sale. The Loan Sale Agreement, 
which will be included in the BIP, will contain additional terms and 
details. To ensure a competitive bidding process, the terms of the 
bidding process and the Loan Sale Agreement are not subject to 
negotiation.
    Due Diligence Review: The BIP will describe the due diligence 
process for reviewing loan files in the competitive Healthcare loan 
sale. Qualified Bidders will be able to access loan information 
remotely via a high-speed Internet connection. Further information on 
performing due diligence review of the Mortgage Loans will be provided 
in the BIP.
    Mortgage Loan Sale Policy: HUD reserves the right to add Mortgage 
Loans to or delete Mortgage Loans from the competitive Healthcare loan 
sale at any time prior to the Award Date. HUD also reserves the right 
to reject any and all bids, in whole or in part, without prejudice to 
HUD's right to include any Mortgage Loans in a later sale. Mortgage 
Loans will not be withdrawn after the Award Date except as is 
specifically provided in the Loan Sale Agreement.
    The sale activities described in this announcement involve sales of 
unsubsidized mortgage loans, pursuant to Section 204(a) of the 
Departments of Veterans Affairs and Housing and Urban Development, and 
Independent Agencies Appropriations Act of 1997, 12 U.S. C. 1715z-
11a(a).
    Mortgage Loan Sale Procedures: HUD will pursue direct 
noncompetitive sales as the method to sell some of the Multifamily 
Mortgage Loans to units of local government. This method of sale will 
ensure affordable housing by awarding the Mortgage Loans to units of 
State and Local Government. The final purchase price will be based on 
the Office of Management and Budget's approved market valuation 
methodology and, if applicable, adjusted by immediate repairs required 
to maintain the property. The itemized cost of immediate repairs shall 
adhere to HUD's Post-Closing Repair Requirements form HUD-9552.
    HUD selected a competitive sale as the method to sell the 
Healthcare and other Multifamily Mortgage Loans. This method of sale 
maximizes HUD's return on the sale of these Mortgage Loans, allows for 
the greatest opportunity for all qualified bidders to bid on the 
Mortgage Loans, and provides the quickest and most efficient vehicle 
for HUD to dispose of the Mortgage Loans.
    Bidder Eligibilty: In order to bid in the sale, a prospective 
bidder must complete, execute and submit both a Confidentiality 
Agreement and a Qualification Statement acceptable to HUD. Not-for-
profit organizations and units of State and Local Government must 
complete, execute and submit both a Confidentiality Agreement and 
Qualification Statement for Non-Profits, Units of General Local 
Government and State Agencies acceptable to HUD. The following 
individuals and entities are ineligible to bid on any of the Mortgage 
Loans:
    (1) Any employee of HUD, a member of such employee's household, or 
an entity owned or controlled by any such employee or member of such an 
employee's household;
    (2) Any individual or entity that is debarred, suspended, or 
excluded from doing business with HUD pursuant to Title 24 of the Code 
of Federal Regulations, Part 24;
    (3) Any contractor, subcontractor and/or consultant or advisor 
(including any agent, employee, partner, director, principal or 
affiliate of any of the foregoing) who performed services for or on 
behalf of HUD in connection with HUD mortgage sales;

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    (4) Any individual who was a principal, partner, director, agent or 
employee of any entity or individual described in subparagraph 3 above, 
at any time during which the entity or individual performed services 
for or on behalf of HUD in connection with HUD mortgage sales;
    (5) Any individual or entity that uses the services, directly or 
indirectly, of any person or entity ineligible under subparagraphs 1 
through 4 above to assist in preparing any of its bids on the Mortgage 
Loans;
    (6) Any individual or entity which employs or uses the services of 
an employee of HUD (other than in such employee's official capacity) 
who is involved in HUD mortgage sales;
    (7) Any mortgagor (or affiliate of a mortgagor) that failed to 
submit to HUD on or before December 1, 2009, audited financial 
statements for fiscal years 2001 through 2008 for a project securing a 
Mortgage Loan;
    (8) Any individual or entity and any Related Party (as such term is 
defined in the Qualification Statement) of such individual or entity 
that is a mortgagor in any of HUD's Multifamily Housing or Healthcare 
programs that is in default under such mortgage loan or is in violation 
of any regulatory or business agreements with HUD, unless such default 
or violation is cured on or before December 8, 2009;
    (9) Any entity or individual that serviced or held any Mortgage 
Loan at any time during the 2-year period prior to December 1, 2009, is 
ineligible to bid on such Mortgage Loan or on the pool containing such 
Mortgage Loan, but may bid on loan pools that do not contain Mortgage 
Loans that they have serviced or held at any time during the 2-year 
period prior to December 1, 2009.
    (10) Also ineligible to bid on any Mortgage Loan are: (a) Any 
affiliate or principal of any entity or individual described in the 
preceding sentence (paragraph 9); (b) any employee or subcontractor of 
such entity or individual during that 2-year period; or (c) any entity 
or individual that employs or uses the services of any other entity or 
individual described in this paragraph in preparing its bid on such 
Mortgage Loan.
    In addition, to be eligible to bid in HUD's supplementary pool of 
unsubsidized Multifamily mortgage loans limited to not-for-profit 
organizations and units of State and Local Government, a prospective 
bidder must qualify as one or more of the following:
    (1) An entity that is a nonprofit as defined by Section 501(c)(3) 
of the Internal Revenue Code of 1954 (26 U.S.C.A. Sec.  501(c)(3)); 
and/or
    (2) an entity that is a unit of general local government or State 
agency. Prospective bidders should carefully review the Qualification 
Statement to determine whether they are eligible to submit bids on the 
Mortgage Loans.
    Freedom of Information Act Requests: HUD reserves the right, in its 
sole and absolute discretion, to disclose information regarding these 
sales activities, including, but not limited to, the identity of any 
successful bidder and its bid price or bid percentage for any pool of 
loans or individual loan, upon the closing of the sale of all the 
Mortgage Loans. Even if HUD elects not to publicly disclose any 
information relating to these sales activities, HUD will have the right 
to disclose any information that HUD is obligated to disclose pursuant 
to the Freedom of Information Act and all regulations promulgated there 
under.
    Scope of Notice: This notice applies to these sales activities and 
does not establish HUD's policy for the sale of other mortgage loans.

    Dated: November 30, 2009.
David H. Stevens,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. E9-29531 Filed 12-10-09; 8:45 am]
BILLING CODE 4210-67-P