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 postM2M@hud.gov.