Below, please find three recent updates from USDA regarding allowable expenses and reserve accounts for Multi-Family Housing properties, and reallocation of Rental Assistance units for properties no longer in the program.
The Rural Housing Service (RHS) published an Unnumbered Letter (UL) to clarify allowable expenses to be paid by project income in Rural Development-financed Section 515 and Section 514 multifamily properties. The Agency had previously agreed to provide periodic reminders to program participants regarding allowable and unallowable expenses; also, this UL addresses questions received from State and Servicing Offices. To read the Unnumbered Letter online, please click here.
RHS published an Unnumbered Letter (UL) regarding changes to policies and procedures for establishing and maintaining supervised bank accounts of Multi-Family Housing properties.
The Agency is relieving MFH borrows of certain problematic requirements within RD’s regulations governing Supervised Bank accounts that are no longer feasible in the commercial banking environment as a means of withdrawing reserve account funds, mainly due to current electronic banking operations.
The Agency is no longer required to countersign approved withdrawals from reserve accounts, and MFH employees will no longer have to present their federal government ID to the bank as they will no longer be listed as an additional signer on the commercial bank account; in addition, borrowers are no longer required to obtain a collateral pledge if the amount of funds exceeds the maximum limit covered by the Federal deposit insurance. To read the UL and the new sample deposit agreement online, please click here.
In order to assist very low-income tenants and applicants at eligible properties, RHS has published an Unnumbered Letter (UL) providing States with guidance on reallocating Rental Assistance (RA) units currently held in the Administrator’s reserve back to the State in which the units originated. The UL also allows States to use RA when properties are paid in full henceforth.
The RA units being reallocated are from properties that left the program via acceleration, foreclosure sale, natural maturity, or prepayment during fiscal years 2017 and 2018. Attachments to the UL provide the number of RA units available per State currently in the Administrator’s reserve. To read the UL and attachments online, please click here.