Project Preservation and Suitability RRHA June 2019 Nicki Whitley Project Preservation and Suitability RRHA June 2019

Project Preservation/Prepayment Borrowers must obtain approval before prepaying their loans Borrowers eligible to request prepayment: December 15, 1989 Must be a written request Evaluate need of the property Incentives, subject to the availability of funding Pay in full or sell, with restrictions or without UL dated 4/28/15 Management of Loan Payoffs in MFH Vouchers To protect the supply of affordable housing and to ensure that tenants of multi-family housing properties do not suffer from rent overburden or the loss of their units All loans approved prior to December 15, 1989, are subject to prepayment regulations and must file a prepayment application to request payoff of the loan(s). Loans made on or after December 15, 1989, to build or acquire new multi-family housing units are prohibited from prepayment. 180 days before payoff date allows the Agency time to review the request, complete the application analyses, and offer incentives, if appropriate, If all required procedures can be completed in fewer than 180 days, prepayment may occur at an earlier date

Project Suitability Handbook 3, Chapter 6 – rewritten in 2018 Review classification, property and marketing factors and assess need (see table next slide) Look at ownership, management, health and safety issues, physical findings, transition events, cost to rehab, market demand, vacancy rates, economic viability, and environmental influences. End result: protect the tenants, ensure government funds (RA) are used effectively and efficiently To protect the supply of affordable housing and to ensure that tenants of multi-family housing properties do not suffer from rent overburden or the loss of their units All loans approved prior to December 15, 1989, are subject to prepayment regulations and must file a prepayment application to request payoff of the loan(s). Loans made on or after December 15, 1989, to build or acquire new multi-family housing units are prohibited from prepayment. 180 days before payoff date allows the Agency time to review the request, complete the application analyses, and offer incentives, if appropriate, If all required procedures can be completed in fewer than 180 days, prepayment may occur at an earlier date

Nicki Whitley Rural Development Multi-Family Housing Specialist Illinois State Office Office: 217.403.6223 nicki.whitley@usda.gov www.rurdev.usda.gov/il