RAD PIH Notice 2012-32 (.pdf, 1 MB) - National Low Income ...

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Section I: Public Housing Projectsmaterials (e.g., inducement resolution for tax-exempt bonds) described in theapplicable QAPA date by which the RAD applicant must notify HUD of the decision of the creditissuingauthority, 10 days after the Notification of award described in the applicableQAP.A PHA that fails to meet a contractual milestone will cause the CHAP to be revoked unless it hassubmitted, and HUD has approved, a request for extension of the contractual deadline. Theextension request must include a justification and explain why failure to meet the milestoneshould not jeopardize the PHA’s ability to complete the RAD conversion. Approval ofextensions is at HUD’s sole discretion. Extensions will not be approved if the delays resultedfrom factors that are within the PHA’s control.1.13 ClosingThe closing is a concurrent event that must include:1. Release of the Public Housing Declaration of Trust (DOT);2. Removal from the public housing ACC;3. The execution of the new PBRA or PBV HAP contract and RAD Use Agreement;4. Recordation of the RAD Use Agreement,5. Closing of any bridge, construction, or permanent debt or equity financing; 586. Closing of the terms and conditions of the RCC.When the closing escrow agent confirms that all documents have been properly executed andhave been received into escrow, that all funds have been received into escrow, and that allpreconditions to closing have been fully satisfied, the closing will take place.At the closing, the closing escrow agent will distribute the proceeds of any new loan, any othersources of funds, and executed documents (including the HAP), and will deliver appropriatedocuments for recordation in the local land records. The lien of the new first mortgage loan (ifany) shall be subject to the encumbrance of the RAD Use Agreement.Closing preparations will include:Selection by the primary lender or other financing source of a closing escrow agentacceptable to HUD;58 In the event that construction or bridge financing will be used as part of the financing, HUD will require evidenceat closing of firm commitment of take-out or permanent financing conditional only to the completion of constructionor term of the bridge financing.PIH-2012-32 (HA) Rental Assistance Demonstration – Final Implementation 62
Section I: Public Housing ProjectsReceipt by the closing escrow agent of the requisite number of copies of all closingdocuments, un-executed;Preparation of the settlement statement, by the closing escrow agent, to the satisfaction ofall parties; andReceipt by the closing escrow agent of an opinion of counsel to the owner. This opinionassures that the owner signatory was authorized to sign, the closing documents do notconflict with any other agreements of the owner, the closing documents are effective, theowner entity is in good standing, and that all Closing Documents are valid andenforceable as against the owner.Development proceeds will be placed into the account of the closing escrow agent. If the loanwill be funded in draws or the equity funded in installments, the first draw or installment must befunded into the closing escrow and the closing escrow agent must determine that sources anduses are in balance at the Closing.If the project is being financed with an FHA-insured loan, the closing requirements listed underthe MAP guide will apply.Following the closing, counsel to the lender will deliver an opinion to HUD, to include, at aminimum, that the closing took place in accordance with this Notice and with all other applicableHUD requirements.1.14 PHA RAD Developer FeeHUD recognizes that in order to secure and administer debt and equity sources, and oversee thesuccessful completion of significant rehabilitation, PHAs will have to either dedicateexperienced staff, if such experience currently exists on staff, or hire or contract for the expertisenecessary to successfully complete rehabilitation on schedule and on budget.The PHA may earn a RAD Developer Fee to address these costs as permitted by the fundingsource(s):A. For non-LIHTC transactions, the RAD Developer Fee may be up to 10 percent of the totaldevelopment budget (all hard costs and reasonable soft costs), less developer fee andreserves and less any acquisition costs in non arms-length acquisitions, e.g., transfers ofproperty title to related or wholly-owned entities for the purpose of meeting single assetentity ownership requirements. The release of the RAD Developer Fee will be made uponachievement of the following milestones:\1. At initial closing, up to 33 percent of the total RAD Developer Fee;2. At 50 percent completion of rehabilitation, as certified by HUD’s inspector, another 33percent of the total RAD Developer Fee;PIH-2012-32 (HA) Rental Assistance Demonstration – Final Implementation 63
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Section II: Moderate Rehabilitation
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Attachment 2A - Sample Notification
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Section III: Rent Supplement and Re
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Attachment 3A - Sample Notification
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Appendix I - 24 CFR Part 880 Regula
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Appendix III- PBRA Site and Neighbo
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