Ohio Hub Connector Keeping HUD Partners Connected
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Ohio Hub Connector Keeping HUD Partners Connected DIRECTOR’S CORNER Summer 2012 “Breaking Ground – effectively and efficiently deal Columbus office, we ask for your with the dramatic increase in FHA patience. We anticipate that the Inside this issue: Delivering Results.” insured applications. impact on processing times for By Randolph Wilson “Breaking Ground – Delivering applications already in the queue Reducing Regula- 2 As many of our active FHA multi- Results” has been rolled out na- will be nominal and we believe tory Burden family lenders know, the Depart- tionally in “Waves”. Wave One that the long term benefit will far ment took a critical look at its un- was rolled out in the San Antonio, outweigh any short term inconven- Energy Efficient 2 derwriting process last year and in Denver, and Greensboro, Balti- ience. late FY 2011 and early FY 2012 more and Chicago offices in late Finally, for our industry partners Hopeton Village 3 rolled out new initiative known as FY 2011 and early FY 2012. Our that operate on the Department’s “Breaking Ground – Delivering Cleveland Program Center was servicing side, do not feel left out. St. Paul Village 3 Results.” included in Wave 4 and completed Similar to the efforts occurring on “Breaking Ground – Delivering the process earlier this our Production side, the Depart- Cleveland Grant Results” is a national redesigning month. Wave 5, which includes ment has begun the initial roll out Opportunities 4 of the Department’s underwriting the Columbus office, began on of a companion initiative to retool process to better meet the needs of th Paperwork Monday, May 14 . our Asset Management process and our customers and the public. The Breaking Ground is essentially a 4- procedures. That initiative, known Pitfalls 4 end goal being to provide faster 6 week process during which our as “Sustaining Our Investments”, turnaround times and higher pro- New Guidance Production staff is required to is currently being piloted in a cou- 5 ductivity, fully engage our staff spend intensive time learning, de- ple of HUD offices and is sched- 202 Prepayment and strengthen our risk manage- signing and implementing process uled to be rolled out in Columbus ment capacity. changes. Unfortunately, they are in September. We’ll have more PSH for the 5 Effectively, the purpose of this unable to devote the normal information for you on “Sustaining Homeless new initiative is to assist the De- amount of time to their everyday Our Investments” in our next edi- partment’s 17 Multifamily Hubs COAM Corner work items during this time. tion. 6 and 34 Program Centers to more So for those lenders active with the Development 6 Cleveland Production Hits the “Wave” Personnel 7 By Pamela Ashby Development team in the process transition and moving forward the Cleveland HR 7 The Cleveland Multifamily Pro- of establishing protocols for their office has increased communica- gram Center recently completed its respective Breaking Ground initia- tion with customers and is making HUD Mailing roll-out of the HQ-driven Housing tives. Each Design Council fo- more definitive decisions earlier Lists 8 Production Breaking Ground ini- cused on a separate area. These and more timely in the review tiative which initiated in 2011. included White Board Design, process. Also, we are focused on New Regulations The objective of the initiative, which will track the underwriting meeting mandated timeframes Final Rule 77 8 which is being introduced across review process from receipt to firm which is extremely important in FR5662 the country in “waves”, is to meet commitment issuance, Staging, the timing of negotiating mortgage the needs of our lending customers which establishes the various ar- terms. Excess Income and the public through faster turn- eas for application storage during Cleveland’s final product was re- 9 Section 236 around times and higher productiv- the review phases, Standard cently presented to Associate DAS ity in our underwriting processes. Works, which is a living document Janet Golrick who visited the of- Upcoming Event 9 In addition, HUD is optimistic that that depicts each step in the devel- fice to see the implementation of this improved, streamlined ap- opment review process and is a Breaking Ground. Cleveland looks proach will minimize risk to the useful tool for training as well, and forward to improved successes in taxpayer and to the FHA insurance finally Early Warning System the Development pipeline because Letters to the 10 fund. Cleveland, selected to par- (EWS), which allows the under- of this initiative. Editor ticipate in wave four, completed writing team to input certain appli- the majority of the transition by the cation data into a template for a Recent Issuances 10 end of April. snapshot of underwriting risk at the The initiative is a specialized pro- early stage of the review process. gram uniquely designed for HUD. As with every evolution in work Recent HUD 10 To ensure a smooth integration, process, there will be a learning Notices developers of the initiative spent curve, and we ask for your pa- the better part of almost two years tience. While going through the studying the HUD Multifamily process the lenders were advised underwriting process. Design that the development pipeline Councils comprised of staff mem- would be stalled during orienta- bers were formed to engage the tion. However, throughout the Reducing Regulatory Burden on Affordable Housing Developers and Owners Page 2 By Vera Howard ties with multiple funding sources were -up on any compliance issues with subse- An interagency Rental Policy Working being subjected to duplicative physical in- quent agency-specific inspections or ac- Group (RPWG) consisting of the White spections each with its own unique physical tions, as permitted by loan or business House Domestic Policy Council, the Na- inspection standards. In an effort to reduce agreements and Federal regulations. tional Economic Council, the Office of the redundancy and administrative burden It is the belief of the RPWG that having one Management and Budget, the Department of and protect ever dwindling Federal re- periodically scheduled physical inspection Housing and Urban Development, the De- sources, an alignment team was formed to performed by one agency for the benefit of partment of Agriculture and the Department see if the various Federal funding sources all Federal agencies with a vested financial of the Treasury is carrying out an initiative could reduce the frequency and number of interest in the property will create efficien- for coordinating efforts to reduce regulatory inspections to no more than one federally- cies for the government, for property own- burden on affordable housing developers sponsored visit to each property per year. ers, and for residents of affordable housing and owners. The RPWG also includes Ohio was chosen as one of only six states in whose apartments are subject to inspection. State, local, and private-sector stakeholders the nation to participate in a pilot program The pilot program is expected to run for one all working together on administrative solu- for this purpose. Other states participating year at which time results will be compiled tions to improve coordination of Federal in the pilot program are Michigan, Minne- from each agency for a decision on moving rental policy. sota, Oregon, Washington and Wisconsin. forward. Many factors will be used to de- The Department of Housing and Urban De- A Memorandum of Understanding (MOU) termine if a permanent program is feasible velopment, the Department of Agriculture was drafted outlining the expectations of the such as: and the Department of Treasury all have pilot program. Each agency chose a list of - Is the use of the UPCS protocol appropri- Congressional authority to award funds to properties based on the date of their last ate for all properties? finance the development of and provide inspection for participation in the pilot pro- - Is there a statistically valid sample size subsidy for affordable housing. Developers gram and at the end of November 2011, the that would work for all assisted units in a and owners of affordable housing frequently MOU was executed. The MOU allowed for building on aligned properties? find it necessary to tap into funds from more any of the agencies performing an inspec- - Is an inspection once every one to three than one agency to obtain sufficient re- tion to share copies of the inspection results years an appropriate schedule for all proper- sources to complete a project. However, with the other participating agencies that ties? such multi-layered financing can create a had a common funding interest in the prop- - Are there sufficient costs savings and burden when having to deal with overlap- erty. HUD is the lead agency in Ohio so the reductions in administrative burdens to sup- ping administrative requirements associated majority of inspections are being performed port a permanent change? with the different federal housing programs. by HUD’s Real Estate Assessment Center in - Is there a standard approach for curing The programs have not always been de- accordance with Uniform Physical Condi- inspection related issues that would satisfy signed to work well with each other. tion Standards (UPCS) protocol. Each the various agency requirements? One of the overlapping requirements that agency continues to maintain different en- The Ohio Multifamily Hub contact for the initially appeared appropriate for a pilot forcement standards based on physical in- physical inspection pilot is Vera Howard. program designed to reduce administrative spection findings, and enforcement stan- Questions and/or concerns can be addressed burden and redundancy was the requirement dardization is not part of the pilot program. to Ms. Howard at (614) 469-5737, extension for multiple physical inspections. Proper- Each agency will retain the ability to follow 8043. Energy Efficient Multifamily Housing Roundtable By Phyllis Mitchell strategy or plans.