[Federal Register Volume 85, Number 40 (Friday, February 28, 2020)]
[Notices]
[Pages 12001-12007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04147]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6201-N-01]
Administrative Guidelines: Subsidy Layering Review for Project-
Based Vouchers
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Notice.
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SUMMARY: This notice provides updated Administrative Guidelines
(Guidelines) and requirements for Project-Based Voucher (PBV) Subsidy
Layering Reviews (SLRs), to include new PBV Housing Assistance Payments
(HAP) contract terms provisions, as amended by the Housing Opportunity
Through Modernization Act of 2016 (HOTMA),
[[Page 12002]]
and SLR requirements for Mixed-Finance projects that may or may not
include PBV assistance. This notice also provides transparency on HUD's
expectations regarding cash flow, debt coverage ratios, net operating
income, and operating expense trending requirements.
FOR FURTHER INFORMATION CONTACT: Miguel A. Fontanez Sanchez, Director,
Housing Voucher Financial Management Division, telephone number 202-
402-4212 or Belinda Bly, Supervisor, Urban Revitalization Division,
telephone number 202-402-4104 (neither are toll-free numbers).
Addresses for both: c/o Office of Public and Indian Housing, Department
of Housing and Urban Development, 451 7th Street SW, Washington, DC
20410. Individuals with speech or hearing impairments may access this
number through TTY by calling the Federal Relay Service at 800-877-8339
(this is a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
In support of HUD's mission to create quality affordable housing,
HUD provides funding assistance to incentivize affordable housing
development. Subsidy layering reviews (SLRs) are undertaken to ensure
the amount of assistance provided by HUD is not more than necessary to
make the PBV project feasible in consideration of all other
governmental assistance. SLRs prevent excessive public assistance that
could result when a development proposes combining (layering) the HAP
subsidy from the PBV program with other public assistance from Federal,
State, or local agencies, including assistance through tax concessions
or credits.
SLRs for PBV assistance are required pursuant to Section 8(o)(13)
of the U.S. Housing Act of 1937 (42 U.S.C. 1437f(o)(13)); section
2835(a)(1)(M)(i) of the Housing and Economic Recovery Act of 2008
(HERA); and section 102 of the Department of Housing and Urban
Development Reform Act of 1989. SLRs are only for proposed PBV new
construction and rehabilitation projects prior to the execution of an
Agreement to Enter into Housing Assistance Payments Contract (AHAP).
SLR requirements are not applicable to existing housing.\1\
Specifically, an SLR is not required for a project already subject to a
PBV HAP contract, even if that project is recapitalized with outside
sources of funding (i.e., a PBV HAP-assisted project under contract for
10 years which then receives a tax credit award to address
rehabilitation needs). PBV regulations define existing housing as units
that already exist on the proposal selection date that substantially
comply with Housing Quality Standards (HQS) on that date. (The units
must fully comply with the HQS before execution of the HAP contract.)
In addition, no SLR is required when PBV is the only governmental
assistance provided to a project.
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\1\ Section 2835(a)(1)(F) of Housing and Economic Recovery Act
of 2008 (Pub. L. 110-289), enacted July 30, 2008, does not require
subsidy layering review for existing housing.
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Pursuant to 24 CFR 983.55, public housing agencies (PHAs) must
submit a request for an SLR for a proposed PBV project when the project
includes other governmental assistance. HUD can perform the SLRs in all
cases; however, HUD has also delegated authority to participating
Housing Credit Agencies (HCAs) as defined herein when the other
governmental assistance includes Low-Income Housing Tax Credits
(LIHTC).\2\
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\2\ Pursuant to the Housing and Community Development Act of
1992 (Pub. L. 102-550, approved October 28, 1992), as amended by the
Multifamily Housing Property Disposition Reform Act of 1994 (Pub. L.
103-233, approved April 4, 1994) added a ``Subsidy Layering Review''
provision at 42 U.S.C. 3545.
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II. Subsidy Layering Review
A. Definitions
Housing Credit Agency: For purposes of this notice, an HCA is a
state housing finance agency or other state agency defined by section
42 of the Internal Revenue Code of 1986. HCAs are sometimes referred to
by other names, such as State Housing Finance Agencies or State Housing
Corporation. A participating jurisdiction under HUD's HOME Investment
Partnerships program (see 24 CFR part 92) may also serve as an HCA.
Mixed-finance development: Development or modernization of public
housing pursuant to 24 CFR 905 Subpart F, where public housing units
are owned by an entity other than a PHA.
Other government assistance: Any loan, grant, guarantee, insurance,
payment, rebate, subsidy, tax credit, tax benefit, or any other form of
direct or indirect assistance from the federal government, a state, or
a unit of general local government, or any agency or instrumentality
thereof.
B. Requesting a SLR for a PBV Award
When a PHA selects a project that is either new construction or
rehabilitation, as defined in 24 CFR 983.3, for a PBV award, and the
project will include forms of governmental assistance other than PBVs,
the PHA must request an SLR. PHAs request an SLR through their local
HUD Field Office or, if eligible, through a participating HCA. A list
of participating HCAs is posted and updated periodically on the Housing
Voucher Financial Management Division (FMD) website, found at: https://www.hud.gov/program_offices/public_indian_housing/programs/hcv/fmd. The
participating HCA may charge a fee to perform the SLR, which the PHA
may pay using Administrative Fees or Administrative Fee reserves.
The PHA is responsible for collecting all required documentation
for the SLR from the project owner. A list of all the required
documentation is included in Appendix A. If after the initial
submission new information becomes available, the PHA is responsible
for submitting updated information to HUD or the HCA. The PHA maintains
a project file with a complete set of the required documents. As part
of the project selection process and application for PBVs, the project
owner must disclose all HUD and/or other Federal, State, or local
governmental assistance committed to the project, as well as other
governmental assistance, using Form HUD 2880 (even if no other
governmental assistance is received or is anticipated). If PBV is the
only governmental assistance, an SLR is not required. Whether the PHA
or HCA performs the SLR, the PHA must confirm that no form of disclosed
assistance renders the project ineligible for PBV assistance and does
not violate 24 CFR 983.54.
The PHA must inform the owner if any information changes during the
application process, either by the addition or deletion of other
governmental assistance, the project owner must provide revised
information to correct the earlier submissions to reflect the new
information. If at any time (either during the application process,
after AHAP execution, or after HAP execution) the owner receives
supplemental HUD or new governmental assistance for the project that
results in an increase in project financing in an amount equal to or
greater than 10 percent of the approved SLR development budget, the
owner must submit such changes to the PHA and the PHA must notify HUD
or the HCA.\3\ The AHAP requires that the owner disclose to the PHA
information regarding any related assistance from the Federal
government, a State, or a unit of general local government, or any
[[Page 12003]]
agency or instrumentality thereof, that is made available or expected
to be made available with respect to the contract units.
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\3\ 24 CFR 4.11.
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Completion of an environmental review and environmental approval is
required before an AHAP can be executed, pursuant to 24 CFR 983.153. At
the time of initial submission of the SLR request, the PHA submits
evidence that a request for a 24 CFR part 58 review is submitted to the
responsible entity or a 24 CFR part 50 review is submitted to the Field
Office.
C. Analysis and Safe Harbor Standards
When undertaking an SLR, HUD reviews both the development and
operating costs of a project to determine whether costs are within a
reasonable range, taking into consideration the project's size,
characteristics, location, costs, financing and risk factors. Costs
that fall within acceptable safe harbor standards, as identified below,
may move forward without further justification. If costs exceed safe
harbor standards, then additional justification and documentation are
required to justify the costs based on risk factors, and HUD approval
is required.
If the review is by an HCA, project costs exceeding the safe harbor
standards must be consistent with the HCA's published qualified
allocation plan.
(A) Development Standards:
i. General Contractor Fees: The safe harbor standard is based on
hard construction costs. The maximum allowable combined contractor fee
is fourteen percent (14%) of the total for hard construction costs. For
example, if construction costs are $100,000, the safe harbor amount is
$14,000:
General Conditions: 6% of construction contract amount
Overhead: 2% of construction contract amount
Builder's Profit: 6% of construction contract amount
ii. Developer Fee: The safe harbor standard is a maximum of 15%.
For projects combining public housing units and PBV units in a Mixed-
Finance project, safe harbors are 9%, requiring no justification, above
9% and up to 12%, may be approved with justification. Fees over 12% may
be approved if the PHA receives the amount over 12% and it is
restricted for project costs or future phases as described in the
``Cost Control and Safe Harbor Standards for Rental Mixed-Finance
Development,'' dated April 9, 2003 or any successor document. See
Section 7 on Mixed Finance Projects below.
(B) Operating Standards:
The maximum initial term for a PBV HAP contract is 20 years
pursuant to section 8(o)(13)(F) of the 1937 Housing Act as recently
amended by HOTMA, although the initial terms for other funding sources
may be less. SLR requests must include an operating pro forma that
reflects each year of the HAP contract initial term. All assumptions
for income, expenses and debt must be clearly identified. Both the Debt
Coverage Ratio (DCR) and cash flow are analyzed on a year-by-year
basis. If a project has no debt, the SLR review is processed based only
on cash-flow requirements, as described below in 6(C)(ii).
i. Debt Coverage Ratio: HUD and HCAs analyze the PBV development's
projected DCR both on a yearly basis and trended over the term of the
proposed subsidy period as an indicator of overall project health. As a
HUD metric for PBV purposes, the minimum DCR is 1.10 and the maximum is
1.45. The DCR for each year is determined by dividing the net operating
income for that year by the amount of the debt service for that year.
Factors such as operating cost increases, rent increases, project size,
unit and income mix, and vacancy rates affect net operating income.
Therefore, a trending analysis is also used to evaluate the DCR over
time and to determine whether the amount of assistance is excessive.
HUD recognizes that some projects may have higher upfront DCRs since
owners may frontload debt service to free up cash flow later in the
project period for higher anticipated operating expenses, or that some
projects may have higher DCRs in later years due to planned changes in
financing costs, interest rates, or partnership transfers. If a project
has an overall trending DCR outside the 1.10 to 1.45 range, the project
may have too much governmental assistance. If a project DCR trends
outside the range for an individual year, but has an overall trending
DCR within the range, HUD will require justifications from the Owner or
PHA to understand the project assumptions and yearly deviations.
Net operating income is defined as total operating income
minus total operating expenses. The net operating income for a project
must cover all repayable debt over the life of the HAP contract.
Operating expenses should be trended at a consistent fixed
rate between 1% and 3% per year for the first 5 years and 3%
thereafter. Justification for increases above 3% must be provided.
Rent increases should be trended yearly at a consistent
fixed rate between 2% and 3% per year. Justification is required for
increases outside this range.
Vacancy rates must not exceed 7%.
Debt service is defined as the funds required to make
payments on all non-forgivable loans, including any existing debt on
the property. Debt service does not include forgivable/soft loans, non-
repayable grants, non-repayable federal, state or local assistance,
deferred developer fees, financing fees, partnership fees, management
fees, capital contributions, tax concessions, or tax credits.
If the projected DCR remains between 1.10 and 1.45 during the
initial term of the HAP contract, then it is assumed the project has
enough cash-flow to pay operating expenses and amortized debt, and that
the amount of government assistance is not excessive. HUD will require
adjustments if the projected DCR in any one year falls below 1.10 and
it continues to remain below 1.10 for a series of subsequent years as
cash flow would not be enough to ensure stable operations. Likewise,
HUD will require adjustments to PBV assistance, if the projected DCR
exceeds the maximum of 1.45 in any one year and continues to remain
above 1.45 for a series of subsequent years.
ii. Cash-Flow: For any given year of the project's operating pro
forma, cash flow may not exceed 10% of total operating expenses. Cash-
flow is defined as net operating income minus all required debt
service.
If all or a portion of the developer fee has been deferred
and is owed, the face value amount of the deferred developer fee (i.e.,
no interest earned) may be deducted from cash flow.
Operational and replacement reserves may be deducted from
cash flow when reserves are adjusted by a consistent amount each year.
No further adjustments to cash-flow are permitted beyond
deferred developer fees, operational reserve contributions and
replacement reserve contributions.
If in any given year the annual cash-flow is greater than 10% of
total operating expenses and it remains above 10%, it is assumed the
cash generated from the government assistance is greater than is
necessary to make the project feasible. Therefore, adjustments must be
made by the project owner to reduce cash flow to 10% or less of
operating expenses. If the owner declines, HUD will reduce PBV rents or
the number of PBVs, so the project complies with the 10% requirement.
[[Page 12004]]
D. Requesting a SLR for a Mixed-Finance Project
For Mixed-Finance projects that also include PBVs, the SLR is
handled as part of the Mixed-Finance project review process without a
separate PBV SLR review. SLRs for Mixed-Finance projects are only done
by HUD and may not be done by an HCA. Mixed-Finance reviews are done by
HUD's Office of Public Housing Investments (OPHI) at HUD Headquarters.
This provision also applies to Mixed-Finance projects with PBVs that
are undertaken as part of the Choice Neighborhoods Grant Program, as
well as Choice Neighborhoods projects that have PBVs, but no public
housing. This includes MTW local nontraditional development (LNTD)
proposals. OPHI prepares the SLR as part of the project review process
without a separate PBV SLR review.
As it relates to the PBVs, Mixed-Finance projects must comply with
the SLR standards identified above in the Notice. In addition to this
review, the project will also be reviewed to assure compliance with the
provisions of 24 CFR 905 Subpart F, and other applicable guidance,
including the following:
The ``Cost Control and Safe Harbor Standards for Rental
Mixed-Finance Development,'' dated April 9, 2003 or any successor
document.
Total Development Cost (TDC) and Housing Construction Cost
(HCC) limits imposed on the project, pursuant to HUD Notice PIH-2011-38
or successor notice.
The HUD Pro Rata Test, which assures that the proportion
of HUD public housing funds committed to development of the project
does not exceed the proportion of public housing units in the project.
For example, if there are 120 units in the project and 50 are public
housing, 42% of the units are public housing. Therefore, the amount of
public housing funds contributed to the development of the project may
not exceed 42% of the development budget, including hard and soft
costs.
HUD will review the amount of LIHTC equity to be invested
in the project to ensure that the sale of LIHTCs results in an amount
of net tax credit equity that is consistent with amounts generally
contributed by investors to similar projects under similar market
conditions, and that the amount is not less than 51 cents for each
dollar of tax credit allocation awarded to a project. If the project
receives 51 cents or less of LIHTC equity or does not receive a market
rate of equity, it is subject to additional review to reassess the
project's fees and costs.
E. Outcome
(A) HUD:
If HUD completes the SLR and determines the PBV assistance complies
with the standards set in this Notice, where the PBV assistance will
not result in excessive government subsidy, HUD will certify compliance
pursuant to 24 CFR 4.13 and the local HUD Field Office will notify the
PHA in writing.
If HUD completes the SLR and determines that the amount of
government subsidy, including the PBV assistance, is excessive, HUD
notifies the PHA. The notification includes a recommendation to reduce
the amount of PBV assistance or a determination that PBV assistance
cannot be provided. Once the PHA receives HUD's decision, the PHA must
notify the owner in writing of the outcome and work with the owner to
restructure, as needed. Revised materials must then be resubmitted to
the HUD Field Office for review.
(B) HCA:
If an HCA completes the SLR and determines that PBV assistance
complies with the above standards of this notice and does not result in
excessive government subsidy, the HCA must notify the PHA and submit a
certification to HUD at [email protected] with
a copy to the Director of the local HUD Office of Public Housing
(https://www.hud.gov/program_offices/public_indian_housing/about/field_office) stating that the PBV assistance to be provided is in
accordance with HUD SLR guidelines in this Notice and that a
determination has been made that it does not result in excessive
government subsidy. The AHAP/HAP contract may then be executed if the
environmental approval is received. If the SLR is performed by an HCA,
subsequent approval of the SLR by HUD is not required. The HCA
certification must include the documents outlined in Section 10. See
Appendix C for a sample HCA certification letter and Appendix A for
required information.
If the HCA SLR determines the public assistance amount is
excessive, the HCA must notify HUD, in writing, with a copy to the PHA.
The notification will include either a recommendation to reduce the
amount of PBV assistance or the amount of LIHTC allocation or a
determination that PBV assistance cannot be provided. HUD will consult
with the HCA and the PHA prior to issuing a final determination to
adopt the HCA's recommendation or to revise it. The PHA must notify the
owner in writing of the outcome and work with the owner to restructure,
as needed. Revised materials must then be resubmitted to the HCA and
the HUD Field Office for review.
When a proposal for PBV assistance is contemporaneous with the
application for or award of LIHTCs, the required SLR may be fulfilled
by the HCA in accordance with IRC section 42(m)(2) review if such
review substantially complies with the HUD SLR requirements and
guidelines.
(C) Mixed-Finance Projects: If HUD completes the SLR and determines
the PBV assistance and other public housing assistance complies with
the above standards of this Notice for Mixed-Finance projects and thus
does not result in excessive government subsidy, HUD will certify
compliance pursuant to 24 CFR 4.13 and notify the PHA.
For projects that fail to comply, HUD will notify the PHA, which
must (i) work with the owner to restructure the project so it complies
with the above standards for Mixed-Finance projects and resubmit the
revised documentation to HUD for approval, or (ii) provide sufficient
justification to HUD to allow HUD to approve a variation(s) from the
above standards.
F. Timing
In accordance with program regulations at 24 CFR 983.55, a PHA may
not execute an AHAP contract until after the SLR is completed and
approved by HUD or the HCA. The AHAP also may not be executed until
there is a completed environmental review (ER) and written approval by
the responsible entity or HUD, pursuant to 24 CFR part 50 or Part 58
and PIH Notice 2016-22. The local HUD Field Office must receive the
completed SLR and either approve the Request for Release of Funds or
complete a Part 50 environmental review prior to notifying the PHA that
it may execute the AHAP. The PHA may request an SLR and environmental
review simultaneously. The Field Office confirms to the FMD and/or the
HCA that the ER process is complete.
If the owner reports to the PHA the addition of any governmental
assistance before or during the AHAP contract when no SLR was initially
required because the project had not received and did not anticipate
receiving governmental assistance, then an SLR is required to be
requested by the PHA at the time of the owner's report.
III. Housing Credit Agency Participation and Certification
An HCA is ordinarily established for the purpose of allocating and
administering the LIHTC program under
[[Page 12005]]
section 42 of the Internal Revenue Code (IRC). With HUD approval, HCAs
may perform SLRs for proposed PBV projects that include LIHTCs as part
of the proposed financial assistance. If there are no LIHTCs, HCAs
cannot conduct the SLR. SLRs without LIHTCs will only be conducted by
HUD. Currently 29 states have a HUD-approved HCA; the remaining 21
states may seek HUD approval to conduct SLRs for PBV projects, by
submitting a letter to HUD notifying HUD of their intent to
participate. Appendix B is sample letter.
Pursuant to the requirements outlined herein, as well as the
Memorandum Of Understanding (MOU) between participating HCAs and HUD,
HCAs are required to provide notification to the FMD through the FMD
mailbox of any SLRs approved on HUD's behalf by no later than 30 days
from the date of authorization. Notifications of approval must contain
the following documentation:
Copy of the Signed HCA Certification as shown in Appendix C
The HCA's Internal Recommendation and Sign-off
The Developer's Disclosure of Sources and Uses of Funds
The Developer's Operating Pro Forma Considered
Copy of the PBV Commitment/Award Letter
HUD Form 2880, and
Rent Information and Project Summary
a. Project Name and Address
b. PHA name and code
c. Field Office name and code
d. HCA Name
e. PBV Type: Rental Assistance Demonstration (RAD), Veterans
Assistance and Supportive Housing (VASH), and/or Regular
f. Elderly, Disabled, Homeless, Non-Elderly Disabled, Low-Income,
and/or Veteran.
g. Is the Project New Construction or Rehabilitation?
h. Amount Per Dollar of Syndication Proceed
i. Number of PBV Units Approved by Bedroom Size
j. Debt Coverage Ratio: ____
k. Project meets Cash Flow Criteria (Y/N)
IV. Overview Chart
The following chart summarizes the types of projects that require
an SLR, the entity authorized to perform the SLR and the required
certification. 102 (d) Certification is the owner's certification of no
additional government funding using form HUD 2880.
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102 (d)
Type of project and scenarios SLR reviewer certification
required?
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PBV subsidy without LIHTC. HUD............... Yes.
However, project is new
construction or rehabilitation,
as defined in 24 CFR Sec.
983.3, with 2 or more forms of
government assistance.
PBV existing housing, as defined No SLR required... No.
in 24 CFR 983.3.
PBV new construction or No SLR required... No.
rehabilitated housing, but PBV
is the only form of government
assistance.
PBV subsidy with LIHTC, new HCA or HUD........ If by HCA,
construction or rehabilitated certification not
project. required.
Otherwise, HUD
certifies.
Mixed-finance projects, with or HUD............... Yes.
without LIHTC, with or without
PBV, with or with other forms
of government assistance.
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V. Monitoring
HUD performs quality control reviews of SLRs performed by
participating HCAs by examining the following:
If all required document and materials are available to the
reviewer
If values are correctly determined within the approvable range
If values are above safe harbor standards
If documentation was provided to justify higher costs
If the subsidy was reduced correctly (if applicable)
If any required documentation is not provided, or any portion of
the review is performed incorrectly, HUD requires appropriate
corrective action. When an SLR is performed by an HCA, subsequent
approval of the SLR by HUD is not required.
VI. Paperwork Reduction Act
The information collection requirements contained in this notice
are currently approved by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and
assigned OMB control numbers 2577-0169. An agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless the collection displays a currently valid control
number.
Dated: February 21, 2020.
R. Hunter Kurtz,
Assistant Secretary for Public and Indian Housing.
Appendix A: PHA Submissions
PHAs are responsible for collecting information from project
owners and assembling it in an SLR request submitted to the local
HUD Public Housing Field Office or HCA. SLR requests must contain
the following information. Assembly using a binder is recommended.
Incomplete submissions will be returned.
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Required elements of an SLR application &
checklist Check
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1. Subsidy Layering Review request memorandum:
Clearly identify the PHA, the PHA number, the
Field Office number, the project's name, the
project's total number of units, and the
number of PBV units requested. For a sample
memorandum see Attachment 1 of PIH Notice
2013-11 or newer version superseding it.
2. Project Description: Short narrative
identifying ownership, type of activity
(rehabilitation or new construction),
location (including county), total units,
requested PBV units, PBV type (RAD, VASH,
regular), utility allowances, bedroom
distributions, supportive services (if
applicable) and residential population
(homeless, veteran, elderly, low-income
families) The narrative should also identify
any exceptions applicable to the project
(e.g., number of PBV exceeding the Project
Cap).
[[Page 12006]]
3. Accounting Statement of Sources and Uses of
Funds: Identifying each source and indicate
type (loan, grant, syndication proceeds,
contributed equity). Sources generally
include only permanent financing and grants.
If interim financing or a construction loan
is proposed, provide details in project
description. Separately identify detailed
uses, avoiding broad categories such as
``soft costs.'' Under acquisition costs,
identify purchase price separately from
related costs such as appraisal, survey,
title, recording and legal fees. Include
separate line items representing construction
contract amount, builder's profit, builder's
overhead and total project costs. [Complete
HUD Form 50156]
4. Description of funding sources: Loans
including principal, interest rate,
amortization, term, and any accrual,
deferral, balloon or forgiveness provisions.
Describe any lender, grantor, or syndicator
requirements for reserves or escrows
requirements. Describe if a lender receives a
portion of the net cash-flow, either as
additional debt service or in addition to
debt service. Identify the amount of LIHTC
and include IRS form 8609.
5. Commitment Letters: Lenders and other
funding sources evidence their commitment to
provide funding and disclose significant
terms. Signed loan agreements and grant
agreements meet this requirement. However,
proposal letters and letters of intent do not
meet this requirement.
6. Developer's Commitment Letter: Delineating
any arrangements, contributions, donations,
significant terms or transfer of funds from
the developer and/or participating partners
such as deferred developer's fees, cash
contributions, and equity investments.
7. HOME Commitment Letter: (When applicable)
Signed document clearly identifying
requirements of the HOME designated units and
intended rents.
8. Supportive Service Commitment: (When
applicable) A signed Memorandum of
Understanding that describes the type of
services to be provided, frequency, terms of
service and resident eligibility.
9. Appraisal Report: Based on the ``as is''
value of the property, before construction or
rehabilitation, and without consideration of
any financial implications of tax credits or
project-based voucher assistance. An
appraisal establishing value after the
property is built or rehabilitated is not
acceptable unless it also includes an ``as
is'' valuation. The date of the appraisal to
be within six months of date of submission.
10. Stabilized Operating Pro Forma: Including
projected rental, commercial, and
miscellaneous gross income, vacancy loss,
operating expenses, debt service, reserve
contributions, with cash-flow projections,
and debt service ratios; income and expenses
trended at a consistent percent. [Complete
HUD Form 50156]
11. Low-Income Housing Tax Credit Allocation
Letter: Issued by the authorized tax credit
allocation agency, identifying the amount of
LIHTCs reserved for the project.
12. Historic Tax Credit Letter: Issued by an
authorized historic credit agency, disclosing
the estimated historic tax credit amount
awarded to a project located in a designated
historical area.
13. Equity Contribution Schedule: If equity
contributed to the project is paid in
installments over time, provide a schedule
showing the amount and timing of planned
contributions.
14. Bridge Loans: Providing details if the
financing plan includes a bridge loan where
equity contributions proceeds planned over an
extended time can be paid upfront.
15. Disclosure, perjury and identity of
interest statement (Form HUD-2880) completed
by the owner.
16. PBV award letter: Identifying the housing
authority's approval of project-based voucher
assistance for the project by number of units
and bedroom distribution.
17. PHA rent certification letter: Documenting
proposed contract rents, utility allowances,
and gross rental amounts for assisted units.
Include rent reasonableness documentation or
comparability analysis as evidence of rent
determination and certification.
18. Environmental Clearance: Completion of the
environmental review and environmental
approval is required before AHAP approval can
be granted. At the time of initial submission
of the SLR request, submit evidence that a
request for a part 58 review is submitted to
the responsible entity or a part 50 review is
submitted to the Field Office.
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Appendix B: HCA Notice of Intent To Participate
U.S. Department of Housing and Urban Development
PIH Financial Management Division, Room 4232
451 Seventh Street SW
Washington, DC 20410
By: Email: pih.financial.management.[email protected]
Re: Intent to Participate on Subsidy Layering Reviews
To Whom It May Concern:
The undersigned is a qualified Housing Credit Agency (HCA) as
defined under Section 42 of the Internal Revenue Code of 1986 and
hereby notifies the United States Department of Housing and Urban
Development (HUD) of our intention to conduct subsidy layering
reviews (SLRs) pursuant to HUD's requirements for the purpose of
ensuring the combination of assistance under the Section 8 Project-
Based Voucher (PBV) Program with other federal, state, or local
assistance does not result in excessive compensation. By signifying
this notice, the undersigned hereby certifies that:
Required personnel reviewed the statutes identified in Federal
Register Notice (Insert new reference) Contracts and Mixed-Finance
Development, and 24 CFR 983.55.
The undersigned understands its HCA responsibilities and
certifies it will perform SLRs in accordance with all present and
future statutory, regulatory and HUD requirements. The undersign
acknowledges participation continues unless and until HUD revokes
this notice or the undersigned informs HUD, in writing with a 30-
day-notice, of its decision to withdraw. Upon HUD approval, the
undersigned shall immediately assume the responsibility of
performing SLRs.
Name of agency and address:
Name, title and address if authorized official
Phone, FAX, and email:
Date of execution:
Transmit signed and dated notice of Intent to Participate as a
PDF attachment to Miguel Fontanez at pih.financial.management
.[email protected] with subject line identified ``Submission of
Notice of Intent to Participate.'' For questions concerning the
submission and receipt of the email, call the Financial Management
Division at (202) 402-4212.
Appendix C: HCA Certification
U.S. Department of Housing and Urban Development
PIH Financial Management Division, Room 4232
451 Seventh Street SW
Washington, DC 20410
By: Email: pih.financial.management.[email protected]
Re: Certification of Subsidy Layering Review
To Whom It May Concern:
For purposes of providing of Section 8 Project-Based Voucher
(PBV) Assistance authorized pursuant to 42 U.S.C. 8(o)(13), section
2835(a)(1)(M)(i) of the Housing and Economic Recovery Act of 2008
(HERA), section 102 of the Department of Housing and Urban
Development Reform Act of 1989, and in accordance with HUD
requirements, all of which address the prevention of excess
governmental subsidy, I hereby certify that
[[Page 12007]]
the PBV assistance is not more than is necessary to provide
affordable housing after taking into account other government
assistance for the following project:
Name, address of project:
Name, address of PHA:
Phone, FAX, and email:
Name, address of HCA:
Date of HUD's approval of HCA's intent to participate:
Name of Authorized HCA Certifying Official:
Signature of Authorized HCA Certifying Official:
Date:
Transmit signed and dated SLR certification as PDF attachments
to Miguel A. Fontanez at pih.financial.management.[email protected],
with a copy to the Director of the local HUD Office of Public
Housing: https://www.hud.gov/program_offices/public_indian_housing/about/field_office, with subject line identified ``SLR
Certification--Project Name, City, State'' For questions concerning
the submission and receipt of the email, call the Financial
Management Division at (202) 402-4212.
[FR Doc. 2020-04147 Filed 2-27-20; 8:45 am]
BILLING CODE 4210-67-P