HUD’s Office of Multifamily has recently published the amended and restated use agreement for projects subject to the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (LIHPRHA). The notice does two things: firstly, it details circumstances under which HUD may consider amended and restated use agreements regarding LIHPRHA, and secondly, it provides implementation guidance for recent changes which allow for, under certain circumstances, unlimited distributions of surplus cash from the project and for the release of all monies accumulated in a residual receipts account to an owner upon request.
To allow for these distributions, owners must be in material compliance with their HUD business agreements (i.e., receiving a REAC score above 60, a satisfactory or higher on their most recent Management and Occupancy Review, etc.).
To allow for distribution of a residual receipts account, owners will be required to submit a PCNA report showing they are current on all capital needs.
Previously, owners were limited to an 8% distribution in both circumstances.
