Public Housing Mortgage Program (PHMP) - Proposed Notice for Comment

Comments requested by January 31, 2010

A proposed Notice on the Public Housing Mortgage Program (PHMP) is available on this website by clicking on the link Proposed Public Housing Mortgage Program Notice. Through the PHMP, Public Housing Authorities can undertake the development and rehabilitationof low income housing by mortgaging their public housing real estate assets to secure financing with HUD approval. Unlike the Capital Fund Fianncing Program (CFFP) and the Operating Fund Financing Program (OFFP), the PHMP does not involve the use of public housing funds to repay the financing. Since that time HUD has approved six transactions involving approximately $30 million in financing. The proposed PHMP Notice is intended to advise housing authorities of the framework of the program essentially as it exists today, as well as to solicit public commetn on the proposed notice.

HUD is seeking comments on the proposed PHMP Notice from interested parties to inform its effort to structure a program that is useful to Public Housing Authorities (PHAs) but at the same time is mindful of the long term federal interest in the Public Housing portfolio. The structure of the program is intended to balance requirements of the financial marketplace with those of Public Housing, including restrictive use requirements that can limit the economic value of public housing properties. Toward this end the proposed Notice describes a program that would permit mortgages to be placed in first position on non-dwelling units. In the event of default, this would permit a lender to foreclose on a property and extinguish any HUD interest. For dwelling units, while foreclosure would be permitted, similar to the mixed finance program a Declararation of Restrictive Covenants would be in first position and the Public Housing units would be required to continue to be operated in accordance with Public Housing requirements. When submitting comments on the proposed Notice, HUD requests that interested parties specifically comment on these aspects of the PHMP.

While HUD is implementing the PHMP on a case-by-case basis, proposals requesting HUD to permit foreclosure on dwelling units will receive additional scrutiny and a higher level of review as HUD has not approved transaction utilizing this aspect of the program and is mindful the risks involved.

Addresses

Interested Parties should submit comments by January 31, 2010 to:

Via Mail

PHMP Comments
C/O Dominique Blom
Deputy Assistant Secretary
U.S. Dept. of HUD
Office of Public Housing Investments
451 7th Street SW Room 4130
Washington, D.C. 20410

Via email

PHMP_Notice_Comments@hud.gov

Public Inspection of Public Comments

All properly submitted comments and communications submitted to HUD will be available for public inspection and copying in Room 4134 at HUD Headquarters. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the contact person listed below.

FOR FURTHER INFORMATION CONTACT: Kevin Gallagher, Capital Program Division, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street, SW, Washington, DC 20410-8000; telephone number 202-402-4192 (this is not a toll-free number).