HUD recently announced that the Office of Multifamily Housing will launch a centralized processing model for the majority of Section 236 preservation activity through the Office of Affordable Housing Preservation (OAHP) in HUD Headquarters. Section 236 property owners and purchasers will no longer submit applications to the Multifamily Hub or Program CenterHUD hopes that the process will streamline the processing of Section 236 prepayment applications and related. 

Applications that were sent to any Multifamily Hub, and which are under review as of July 1, 2013, will remain with the applicable Hub for completion. OAHP will only process applications that are new submissions as of July 1, 2013.

Under this reorganized framework, Section 236 property owners will be required to submit requests for applicable transactions directly to OAHP for review, approval (or denial, as applicable), and processing.  OAHP’s expanded portfolio of Section 236 transactions will include the following:

  • Requests for prepayment of FHA-insured and HUD-held Section 236 Loans
  • Interest Rate Payment (IRP) Decouplings
  • Flexible Subsidy Deferrals
  • Post-Transaction Unit Rent-Setting, Including Unit Rent Increases of Greater than 10 Percent
  • Determination of Excess Income Compliance
  • Housing Assistance Payment (HAP) Assumptions (dependent upon the approval of a modified Delegation of Authority)   
  • Issuance of Tenant Protection Vouchers and Enhanced Vouchers
  • Nonprofit Fees and Sales Proceeds
  • Modifications to LIHPRHA / ELIHPA Use Agreements
  • Unit Conversion Requests

Section 236 transaction requests that will be NOT be evaluated and processed by OAHP include:

  • FHA-Insured Refinancing Applications
  • Prepayment Requests, State Housing Finance Agency Non-Insured 236 Loans (State Agency 236 Properties) Please note: if the Owner is seeking an IRP Decoupling, a flexible subsidy deferral or another approval that requires review at HUD Headquarters, such reviews are to be submitted to OAHP.
  • Requests for 236-Related Payment of Partial Claims (PPCs), and the Modification of HUD-Held Section 236 Loans

Click here to read more.