Section 236 Preservation

Effective July 1, 2013, Multifamily Housing will launch a centralized processing model for the majority of Section 236 preservation activity through the Office of Recapitalization (Recap) in HUD Headquarters. Section 236 property owners and purchasers will no longer submit applications to the Multifamily Hub or Program Center. This modification of HUD’s current Section 236 transaction procedures is designed to streamline how Section 236 prepayment applications and related requests are processed, and to assign dedicated staff to oversee the complex work involved in these transactions. Under this reorganized framework, Section 236 property owners will be required to submit requests for applicable transactions directly to Recap for review, approval (or denial, as applicable), and processing. Recap is well positioned to take on these transactions, building on the experience of the Mark to Market program and the new Rental Assistance Demonstration, among other programs. While HUD is implementing improved, streamlined procedures to manage Section 236 transactions, HUD has not made nor requested any change in current statutes, regulations, or policies governing how these transactions are evaluated and approved.


Recap’s portfolio of Section 236 transactions will include the following: Section 236 transaction requests that will be NOT be evaluated and processed by Recap include:

Requests for prepayment of FHA-insured and HUD-held Section 236 Loans

FHA-Insured Refinancing Applications