HUD has issued Notice H 2012-18 and H 2012-19 extending an original Notice H 2010-26 which established policy and procedures for the review of requests to subordinate Section 202 direct loans in cases where refinancing these loans is not feasible. The subordination of a Section 202 direct loan is a tool that may prove advantageous to Section 202 owners and developers using Low Income Housing Tax Credits (LIHTCs) for substantial rehabilitation. Under this Notice, owners with projects with Section 202 direct loans that have immediate needs for rehabilitation, significant or emergency repairs, and cannot refinance using outstanding 202 refinance procedures are able to propose a transaction to fund rehabilitation in which the existing 202 debt is subordinated to a new mortgage. HUD Notice H 2010-26 has been extended for one year.
Click here to read Notice H 2012-19.
Click here to read Notice H 2010-26.
