1. CARH – Overview & Updates of Portfolio Management Issues Stephanie White, Director & Janet Stouder, Deputy Director Multi-Family Housing Portfolio Management Division USDA National Office - Washington DC June 15, 2015

2. Topics Management Fees IPADs RD Maturing Mortgages Rental Assistance PMD Concerns…. Current PMD Projects

4. 4 Management Fee Structure RD and Industry jointly developed a performance-based management fee structure Expected to be effective with the 2017 operating budgets. Management fee will use the then-current base fee… Plus adjustments based on project classification and application of -- Operating Cost Adjustment Factor and Applicable add-on fees

5. 5 Adjust the current base fee by: -- using the classification -- using add-ons where appropriate To the current base fee, apply….. A PropertyFull OCAF B PropertyFull OCAF C Property1/2 OCAF D PropertyNo OCAF Add-Ons… A Property$1.50 if sustained 2 years B Property$0 C Property$0 D Property$0 All Properties$1.00 - with layered financing (new add-on) Plus the Current Add-Ons… Properties with 15 un or less$2 Non-Contiguous Sites$2 Remote$2 Troubled w/Workout$2 - with new management C LASSIFICATION WILL BE WEIGHTED AVERAGE OF PRIOR 8 MONTHS I T WILL BE POSTED IN MINC A LWAYS MONITOR FINDINGS

6. IPads Roll-out began in March. Phase in – completion end of June. Used for Supervisory Visits and Physical Inspections The electronic upload to the MFH database. Saving administrative time. Revised questions. Photos are included in the report. Management Agents will be receiving the report instead of just a letter.

7. 7 RD Maturing Mortgage UL issued in April, 2015 -- Options to Borrowers to keep properties in the portfolio: Re-amortize the remaining loan balance for up to 20 years; Do the Re-am Lite process! No appraisal; no change in current year budget or current year rents; speeds the process; Apply under the MPR program – extra points! - for a debt deferral; Still no? Apply through prepayment so tenants will be protected with RD Vouchers. 2016 President’s Budget includes proposal for tenants in maturing mortgage properties to be eligible for an RD Voucher.

8. 8 FY2015 Budget included limitation on 2 nd renewal within 12 months of first renewal Budget language expected to affect about 40 properties by FYE RD will work with borrowers individually on mitigation measures Budget language not retroactive to funding prior to December 11, 2014 Rental Assistance

9. 9 Open Findings – Monitor in MINC Discuss with servicing specialist MCR Outcome – Poor Workout Plans Submit Clear and Concise Budget Narratives Follow CNAs in Reserve Use OIG issues – High cost line items flagged Additional investigation into unallowable expenses Improved data integrity in database PMD Concerns

10. 10 PMD Concerns IPIA results – 1.41% Errors are generally administrative: signed and dated documents calculation errors Customer Service?

11. Current PMD Projects RA Obligations – at project level & streamline monitoring and internal processes Vouchers Integrating Voucher Determination Summary New Tracking system Upload the Capital Needs Assessment into MFIS Electronic Files Customer Portal Provide more servicing training

12. Multi-Family Housing Programs Questions and Answers