Revised M2M Debt Subordination-Qualified Nonprofit Purchasers Notice

HUD released a draft notice on ‘‘Guidelines for Certain HUD Approvals Regarding Properties Encumbered by HUD-Held Mark-to-Market Program Debt and Portfolio Reengineering Demonstration Program Debt.” The draft notice is intended to replace Housing Notice 2012–10, “Guidelines for Assumption, Subordination or Assignment of Mark-to-Market (M2M) Loans in Transfer of Physical Assets (TPA) and Refinance Transactions” in its entirety and provide new instructions for the acquisition and/or refinancing of projects after they have been through a M2M debt restructuring or a Portfolio Reengineering Demonstration Program (Demo Program) restructuring and are encumbered by HUD-held debt (collectively referred to as Post-M2M activities).

In addition, Section 3 of the draft notice would replace Appendix C of the Mark-to-Market Operating Procedures Guide regarding transfers of assets to qualified nonprofits, Section 4 covers matured and outstanding M2M or Demo Program debt, and Section 5 contains guidance that supplements HUD’s previously issued 8(bb) Notice (H-2015-03), and this supplemental guidance may also be relied upon by owners of projects with satisfied M2M subordinate debt obligation(s) that remain encumbered by a M2M Use Agreement and continue to benefit from a full M2M Renewal contract. Comments are due to HUD within 30 days of official publication in the Federal Register. Comments should be submitted via this comment form and sent to