Transfer and Assumption. Basic Revitalization Concepts. 3560 regulations, subpart I Section 3560.406 MFH ownership transfers or sales Section 3560.409 and 3560.410 Servicing Handbook #3, Chapter 7. Guiding Principles. The community needs the housing
3) Lender agrees to extend at rates and terms that keep rents within CRCU
4) When calculating equity payout: - Rents at/below CRCU
- Budget reasonable vacancy & bad debt
- Budget reasonable O&M expenses - Resize the reserve deposit to meet 20 year inflated needs of the property
Equity, rehab, Agency & non Agency debt service, reserve deposits, operating costs & return to owner cannot exceed CRCU
Transfer Chapter/Rules apply :
90 days - 2 to 10 properties
120 days - 11 or more properties
income, rent, DCR, reserves
Buyer provides overview, deadlines to meet, concessions by RD, funding sources, proposed equity, etc.
CRCU, CNA requirements, appraisal requirements, RD requirements for subordination, equity, application requirements, processing guidelines & timeframes
appraiser completes value using data for conventional properties, vacancy rates, etc.
–Historical O&M expenses for property
–annual deposit to replacement reserve (ADRR)
• Don’t know ADRR???
–Use estimate based on similar properties in your area.
–MPR transactions, recent transfers with or w/o rehab
(no expectation of repayment)
3) No 3rd party debt included with transaction
4) UWT (Transfer Analysis) will highlight this issue in red
STOP. Cash to seller >max equity allowed
For Transfer, hide all sheets except:Deal Summary, Rents & Rent Loss, Inc & Exp, Cap Needs (include all 4 M&C Sheets), Transaction Variables, Transfer Input, Transfer S&U, Transfer Analysis