[Federal Register Volume 88, Number 144 (Friday, July 28, 2023)]
[Notices]
[Pages 48905-48907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15969]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6357-N-02]


Notice of HUD-Held Multifamily and Healthcare Loan Sale (MHLS 
2023-2)

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, U.S. Department of Housing and Urban Development (HUD).

ACTION: Notice of sale of one (1) multifamily and nine (9) healthcare 
mortgage loans.

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SUMMARY: This notice announces HUD's intention to sell one unsubsidized 
multifamily and nine unsubsidized healthcare mortgage loans, without 
Federal Housing Administration (FHA) insurance, in a competitive, 
sealed bid sale on or about August 30, 2023 (MHLS 2023-2 or Loan Sale). 
This notice also describes generally the bidding process for the sale 
and certain persons who are ineligible to bid.

DATES: A Bidder's Information Package (BIP) will be made available on 
or about August 2, 2023. Bids for the loans must be submitted on the 
bid date, which is currently scheduled for August 30, 2023, between 
certain specified hours. HUD anticipates that an award or awards will 
be made on or before September 6, 2023. Closing is expected to take 
place on September 20, 2023.

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 Mission Capital Advisors 
bidding system website: market.missioncap.com. This website contains 
information and links for sale registration and electronically 
completing and submitting the documents.
    Questions about bidder qualification process may be sent to: 
Transaction Specialist at 1-844-709-0763 or email 
[email protected].

FOR FURTHER INFORMATION CONTACT: John Lucey, Director, Asset Sales, 
U.S. Department of Housing and Urban Development at 
[email protected] or telephone (202) 708-2625.

SUPPLEMENTARY INFORMATION: HUD announces its intention to sell, in MHLS 
2023-2, ten (10) unsubsidized mortgage loans (Mortgage Loans), 
consisting of nine (9) first lien healthcare notes secured by skilled 
nursing and assisted living facilities located in various locations 
within Alabama, Iowa, Maine, Nebraska, New Jersey, Ohio, and 
Pennsylvania, and one (1) first lien multifamily note secured by a 
multifamily property located in Kentucky. The Healthcare Mortgage Loans 
are non-performing mortgage loans. The multifamily loan is a performing 
mortgage loan. The listing of the Mortgage Loans is included in the 
BIP. The Mortgage Loans will be sold without FHA insurance and with HUD 
servicing released. HUD will offer qualified bidders an opportunity to 
bid competitively on the Mortgage Loans.
    The Mortgage Loans will be stratified for bidding purposes into 
mortgage loan pools as appropriate. Each pool will contain Mortgage 
Loans that generally have similar performance, property

[[Page 48906]]

type, geographic location, lien position and other characteristics. 
Loans may be offered in pools of more than one loan and, or in single 
loan pools. Qualified bidders may bid on one or more pools.
    Bidder eligibility criteria is set forth in the Qualification 
Statement. As detailed in the Qualification Statement, certain 
entities/individuals may be precluded from bidding depending on their 
prior involvement with the loan(s).

The Bidding Process

    The BIP describes in detail the procedure for bidding in MHLS 2023-
2. The BIP also includes a standardized non-negotiable loan sale 
agreement (Loan Sale Agreement).
    As part of its bid, each bidder must submit a minimum deposit of 
the greater of One Hundred Thousand Dollars ($100,000) or ten percent 
(10%) of the aggregate bid prices for all of such bidder's bids. In the 
event the bidder's aggregate bid is less than One Hundred Thousand 
Dollars ($100,000), the minimum deposit shall be not less than fifty 
percent (50%) of the bidder's aggregate bid. HUD will evaluate the bids 
submitted and determine the successful bid(s) 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, with any 
amount beyond the purchase price being returned to the bidder. Deposits 
will be returned to unsuccessful bidders after notification to 
successful bidders. Closings are expected to take place on September 
20, 2023.
    The Loan Sale Agreement, which is included in the BIP, contains 
additional terms and details. To ensure a competitive auction, the 
terms of the bidding process and the Loan Sale Agreement are not 
subject to negotiation.

Due Diligence Review

    The BIP describes the due diligence process for reviewing loan 
files in MHLS 2023-2. 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 is 
provided in the BIP.

Mortgage Loan Sale Policy

    HUD reserves the right to add Mortgage Loans to or delete Mortgage 
Loans from MHLS 2023-2 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 the Mortgage Loans in a 
later sale. The Mortgage Loans will not be withdrawn after the award 
date except as is specifically provided for in the Loan Sale Agreement.
    This is a sale 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 Procedure

    HUD selected a competitive auction as the method to sell the 
Mortgage Loans. This method of sale optimizes HUD's return on the sale 
of these Mortgage Loans, affords the greatest opportunity for all 
qualified bidders to bid on the Mortgage Loans, and provides the most 
efficient vehicle for HUD to dispose of the Mortgage Loans.

Bidder Eligibility

    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. The following individuals 
and entities are among those INELIGIBLE to bid on the Mortgage Loans 
being sold in MHLS 2023-2:
    1. A mortgagor or healthcare operator, including its principals, 
affiliates, family members, and assigns, with respect to one or more of 
the Mortgage Loans being offered in the Loan Sale, or an Active 
Shareholder (as such term is defined in the Qualification Statement);
    2. With respect to any other HUD multifamily and/or healthcare 
mortgage loan not offered in the Loan Sale, any mortgagor or healthcare 
operator, including any Related Party (as such term is defined in the 
Qualification Statement) of either, that has failed to file financial 
statements or is otherwise in default under such mortgage loan or is in 
violation or noncompliance of any regulatory or business agreements 
with HUD and that fails to cure such default or violation by no later 
than August 1, 2023;
    3. Any individual or entity that is debarred, suspended, or 
excluded from doing business with HUD pursuant to Title 2 of the Code 
of Federal Regulations, Part 2424;
    4. 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 MHLS 2023-2;
    5. Any employee of HUD, a member of such employee's family, or an 
entity owned or controlled by any such employee or member of such an 
employee's family;
    6. Any individual or entity that uses the services, directly or 
indirectly, of any person or entity ineligible under provisions (3) 
through (5) above to assist in preparing its bid on any Mortgage Loan;
    7. An FHA-approved mortgagee, including any principals, affiliates, 
or assigns thereof, that has received FHA insurance benefits for one or 
more of the Mortgage Loans being offered in the Loan Sale;
    8. An FHA-approved mortgagee and/or loan servicer, including any 
principals, affiliates, or assigns thereof, that originated one or more 
of the Mortgage Loans being offered in the Loan Sale if the Mortgage 
Loan defaulted within two years of origination and resulted in the 
payment of an FHA insurance claim;
    9. Any affiliate, principal or employee of any person or entity 
that, within the two-year period prior to August 1, 2023, serviced any 
Mortgage Loan or performed other services for or on behalf of HUD in 
regard to any Mortgage Loan;
    10. Any contractor or subcontractor working for or on behalf of HUD 
that had access to information concerning any Mortgage Loan or provided 
services to any person or entity which, within the two-year period 
prior to August 1, 2023, had access to information with respect to any 
Mortgage Loan; and/or
    11. Any employee, officer, director or any other person that 
provides or will provide services to the prospective bidder with 
respect to the Mortgage Loans during any warranty period established 
for the Loan Sale, that serviced the Mortgage Loans or performed other 
services for or on behalf of HUD or within the two-year period prior to 
August 1, 2023, provided services to any person or entity which 
serviced, performed services or otherwise had access to information 
with respect to any Mortgage Loan for or on behalf of HUD.
    Other entities/individuals not described herein may also be 
restricted from bidding on the Mortgage Loans, as fully detailed in the 
Qualification Statement.
    The Qualification Statement provides further details pertaining to 
eligibility requirements. Prospective bidders should carefully review 
the Qualification Statement to determine whether they are eligible to 
submit bids on the Mortgage Loans in MHLS 2023-2.

[[Page 48907]]

Freedom of Information Act Requests

    HUD reserves the right, in its sole and absolute discretion, to 
disclose information regarding MHLS 2023-2, including, but not limited 
to, the identity of any successful bidder and its bid price or bid 
percentage for the Mortgage Loans, upon the closing of the sale of the 
Mortgage Loans. Even if HUD elects not to publicly disclose any 
information relating to MHLS 2023-2, HUD may be required to disclose 
information relating to MHLS 2023-2 pursuant to the Freedom of 
Information Act and all regulations promulgated thereunder.

Scope of Notice

    This notice applies to MHLS 2023-2 and does not establish HUD's 
policy for the sale of other mortgage loans.

Julia R. Gordon,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2023-15969 Filed 7-27-23; 8:45 am]
BILLING CODE 4210-67-P