81 FR 30495 - Retrospective Review-Improving the Previous Participation Reviews of Prospective Multifamily Housing and Healthcare Programs Participants; Supplemental Notice of Proposed Rulemaking
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Federal Register Volume 81, Issue 95 (May 17, 2016)
Federal Register Volume 81, Issue 95 (May 17, 2016)
| Page Range | 30495-30503 | |
| FR Document | 2016-11346 |
[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)] [Proposed Rules] [Pages 30495-30503] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-11346] ======================================================================== Proposed Rules Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. ======================================================================== Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Proposed Rules [[Page 30495]] DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Part 200 [Docket No. FR-5850-N-03] RIN 2502-AJ28 Retrospective Review--Improving the Previous Participation Reviews of Prospective Multifamily Housing and Healthcare Programs Participants; Supplemental Notice of Proposed Rulemaking AGENCY: Office of the Assistant Secretary for Housing, HUD. ACTION: Supplemental notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: On August 10, 2015, HUD published in the Federal Register, a proposed rule that would revise HUD's regulations for reviewing the previous participation of Federal programs of certain participants seeking to take part in multifamily housing and healthcare programs administered by HUD's Office of Housing. Specifically, the rulemaking proposed to clarify and simplify the process by which HUD reviews the previous participation of participants that have decision-making authority over their projects as one component of HUD's responsibility to assess financial and operational risk to the projects in these programs. The approach offered by the proposed rule was to not only bring greater certainty and clarity to the process but greater flexibility, avoiding a one-size fits all approach. This document opens the public comment period solely for the provisions addressed in this document to address concerns that while the proposed rule provided greater flexibility, it lacked the greater certainty to which HUD committed, and how HUD would provide such certainty. DATES: Comment Due Date: June 16, 2016. ADDRESSES: Interested persons are invited to submit comments regarding this notice to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Communications must refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title. 1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0001. 2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically. Note: To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the document. No Facsimile Comments. Facsimile (FAX) comments are not acceptable. Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the toll-free Federal Relay Service at 800-877-8339. Copies of all comments submitted are available for inspection and downloading at www.regulations.gov. FOR FURTHER INFORMATION CONTACT: Aaron Hutchinson, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 6178, Washington, DC 20410; telephone number 202-708-3994 (this is not a toll- free number). Individuals with speech or hearing impairments may access this number through TTY by calling the toll- free Federal Relay Service at 800-877- 8339 (this is not a toll-free number). SUPPLEMENTARY INFORMATION: I. Background On August 10, 2015, at 80 FR 47874, HUD published a document that proposed to amend its regulations, at 24 CFR part 200, subpart H, that govern the process by which HUD reviews the previous participation and performance of applicants seeking to participate in HUD's multifamily and healthcare programs. Currently, all principals seeking to participate in HUD's multifamily housing and healthcare programs must certify that all principals involved in a proposed project have acted responsibly and have honored their legal, financial, and contractual obligations in their previous participation in HUD programs, in certain programs administered by the U.S. Department of Agriculture, and in projects assisted or insured by state and local government housing finance agencies. HUD's regulations require applicants to complete a very detailed and lengthy certification form (HUD Form 2530) \1\ of participants that have decision-making authority over their projects as one component of HUD's responsibility to assess financial and operational risk to the projects in these programs. --------------------------------------------------------------------------- \1\ See http://portal.hud.gov/hudportal/documents/huddoc?id=2530.pdf. --------------------------------------------------------------------------- The August 10, 2015, proposed rule proposed to clarify which individuals and entities will be reviewed, the purpose of the review, and the review to be undertaken. HUD proposed by targeting more closely the individuals and actions that would be subject to prior participation review, HUD would not only bring greater certainty and clarity to the process but would provide HUD with flexibility as to the necessary previous participation review for entities and individuals that is not possible in a one-size fits all approach. The public comment period on the proposed rule closed on October 9, [[Page 30496]] 2015, and HUD received 33 sets of public comments. The commenters were from real estate organizations, affordable housing nonprofit organizations, consulting firms, non-profit organizations, and law firms. Overall the commenters were very supportive and appreciative of HUD's efforts to reform the regulations. Commenters stated that, in addition to reforms to the regulations, reforms to the review process, additional guidance and training materials were also needed. Several comments expressed concern that the proposed regulations were overly broad and therefore would be open to various interpretations, which would complicate the review process for applicants and participants rather than simplify the process. The commenters suggested that in order to obtain flexibility in the review process, which the commenters supported, the approach in the proposed rule sacrificed specificity and certainty. Commenters suggested that HUD revise the proposed regulations to provide the greater certainty and specificity they need. Other commenters suggested that HUD issue guidance when HUD issues the final regulations to provide the specificity and certainty that the proposed regulations lack according to the commenters. II. Proposed Approach To Provide Certainty and Specificity and Retain Flexibility Through this document, HUD proposes to use an approach that HUD has taken in certain of its other regulations and that is to provide regulations that clearly document the regulatory requirements imposed, but provide in a supplemental document, a document referenced in the regulations, that will address the specific procedures to be followed.\2\ When HUD has taken this approach, HUD commits to provide notice and opportunity for comment for any significant changes made to the document. HUD submits that this approach is particularly suitable for the 2530 process. --------------------------------------------------------------------------- \2\ See 24 CFR 207.254, pertaining to mortgage insurance premiums; 24 CFR 203.605, pertaining to tier ranking systems and methodology applicable to loss mitigation performance; 24 CFR 290.9, pertaining to setting rental rates for certain multifamily housing projects; 24 CFR 570.712(b) pertaining to setting a fee for the Section 108 Loan Guarantee Program; and 24 CFR part 902, pertaining to scoring notices for HUD's Public Housing Assessment System. --------------------------------------------------------------------------- For the previous participation review process, HUD proposes to issue with its final regulations a ``Processing Guide for Previous Participation Reviews of Prospective Multifamily Housing and Healthcare Programs' Participants'' (Guide). This Guide, which will be posted on HUD's Web site, will provide the details on procedures which commenters are seeking and which HUD submits is more appropriate for a process guide than for regulatory text. The Guide will provide applicants for and participants in HUD's multifamily housing and healthcare programs the detailed information desired on the previous participation review process, and provide HUD with the ability to make changes as may be needed to address specific circumstances that may arise in the previous participation process and to keep up-to-date with changes that may arise in the housing market. One of the longstanding complaints about HUD's previous participation review process is that the process and the regulations that govern the process are very outdated and do not keep up with the times. HUD submits that a lean set of regulations supplemented by a detailed processing Guide that is subject to notice and comment for any significant changes is the best approach for this process and one that will endure successfully for some time. The appendix to this document provides the proposed Guide for which HUD is seeking public comment for a period of 30 days. The Guide, in addition to elaborating upon terms and provisions in the proposed rule, also addresses ``flags,'' which are not addressed in either the existing regulations or proposed regulations. Flags refer to an issue or issues in a prospective participant's application for which further review is necessary. The Guide also includes certain information collection requirements but those requirements are ones which are already included in HUD's 2530 form and which already have an approval number assigned by the Office of Management and Budget under the Paperwork Reduction Act. For example, the Guide requires organizational information to be presented in an organizational chart instead of merely listed. However, the Guide makes clear that not every entity identified in the organizational chart will be considered a Controlling Participant, as defined in the regulation. In addition to publication in the Federal Register, this document and Guide can be found at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh. III. Description of Proposed Revisions to Regulations In addition to issuance of the proposed Guide for comment, HUD also seeks comment on the following additional provisions that are proposed to be included or revised in the regulation. A. Inclusion of Applicability of Processing Guide in Regulations HUD proposes to revise Sec. 200.210 (Policy) to clarify that it is HUD's policy, in accordance with the intent of the National Housing Act, and with other applicable federal statutes, participants in HUD's housing and healthcare programs be responsible individuals and organizations who will honor their legal, financial and contractual obligations. HUD would further clarify that it will review the prior participation of Controlling Participants, as defined in the August 10, 2015, proposed rule, as a prerequisite to participation in HUD's multifamily housing and healthcare programs listed in Sec. 200.214. HUD would further revise the policy language in Sec. 200.210 to advise that the regulations in 24 CFR part 200, subpart H, as proposed to be amended by the August 10, 2015, proposed rule would be supplemented by the Processing Guide for Previous Participation Reviews of Prospective Multifamily Housing and Healthcare Programs' Participants (Guide), which would be made available on HUD's Web site at www.hud.gov. HUD would advise that the Guide elaborates on the basic procedures involved in the previous participation review process. HUD would also advise that for any significant changes made to the Guide, HUD would provide advance notice and the opportunity to comment, providing a comment period of no less than 30 days. B. Description of Definition of ``Risk'' In Sec. 200.212, the Definition section, HUD proposes to include a definition of ``Risk.'' While Sec. 200.220 of the proposed rule addresses ``risk,'' HUD is proposing to add a definition of this term that would clarify that in order to determine whether a Controlling Participant's participation in a project would constitute an unacceptable risk, HUD's FHA Commissioner must determine whether the Controlling Participant could be expected to participate in the Covered Project (as defined in the August 10, 2015, proposed rule) in a manner consistent with furthering HUD's purpose of supporting and providing decent, safe and affordable housing for the public. The Commissioner's review of Previous Participation shall consider compliance with applicable statutes, regulations and program requirements. HUD would clarify that the FHA Commissioner must consider the Controlling Participant's [[Page 30497]] previous financial and operational performance in HUD programs that may indicate a financial or operating risk in approving the Controlling Participant's participation in the subject Triggering Event. HUD would further provide that at the FHA Commissioner's discretion, as necessary to determine financial or operating risk and to the extent the FHA Commissioner determines such information to be reliably available, the FHA Commissioner may consider the Controlling Participant's participation and performance in any federal, state or local government program. In addition, HUD would provide that the FHA Commissioner may exclude any previous participation the FHA Commissioner determines to be irrelevant in evaluating risk and/or any previous participation in which the Controlling Participant did not exercise, actually or constructively, control. Finally, the definition would provide that any information collection in connection with review of previous participation must follow all applicable requirements for information collection. Dated: May 9, 2016. Edward L. Golding, Principal Deputy Assistant Secretary for Housing. Appendix Processing Guide for Previous Participation Reviews of Prospective Multifamily Housing and Healthcare Programs' Participants Purpose This Processing Guide (Guide) supplements HUD's Previous Participation Review regulations in 24 CFR part 200, subpart H. The Guide defines controlling participants for previous participation review, new flag approval, and rejection guidance and flag protocols in federal programs of certain participants seeking to take part in multifamily housing and healthcare programs administered by HUD's Office of Housing. The Guide aids in clarifying and simplifying the process by which HUD reviews previous participation of participants that have decision making authority over their projects as one component of HUD's responsibility to assess financial and operational risk to projects in these programs. This Guide updates and clarifies previous procedures and supersedes outstanding policy and guidance concerning previous participation review found in the following: Multifamily Accelerated Processing (MAP) Guide Handbook 4430.G, Multifamily Asset Management and Project Servicing Handbook 4350.1, Healthcare Mortgage Insurance Program Handbook 4232.1, and Mortgage Insurance for Hospitals 4615.1. HUD will incorporate elements of this Guide into these handbooks. In addition, the Guide supersedes the Previous Participation (HUD-2530) Handbook 4065.1. Applicability of the Previous Participation Review This Guide applies to Covered Projects administered by the Office of Multifamily Housing, the Office of Grant Administration and the Office of Healthcare Programs, as listed in HUD's regulations in 24 CFR part 200 subpart H. The Covered Projects are those that are insured under the following sections of the National Housing Act: Sections 213, 220, 231, 223(d), 221(d)(4), 241(a), 223(f), 232/223(f), 242/223(f), 223(a)(7), 232, 232(i), 242, 542(b) and 542(c). The Guide also applies to non-insured projects that include Section 202 or Section 811 Capital Advances or Direct Loans, Section 236 loans, or Subsidized Projects in which 20 percent or more of the units now receive or will receive a subsidy in the form of:Interest reduction payments under section 236 of the National Housing Act (12 U.S.C. 1715z-1); Rental Assistance Payments under section 236 of the National Housing Act (12 U.S.C. 1715z-1); Rent Supplement payments under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s); or Project based rental assistance pursuant to housing assistance payment contracts under Section 8 of the Housing Act of 1937 (but not including project-based assistance provided under the Housing Choice Voucher program administered by HUD's Office of Public and Indian Housing). For the Sections 223(a)(7), 223(f), 241(a), 232(i) and 223(d) programs Controlling Participants are only subject to previous participation review if they were not previously approved to participate in that project. Change in Controlling Participants Any new Controlling Participant of a Covered Project requires consent by HUD. Waiver Authority Program offices may waive any portion of this Guide that is not regulatory subject, however, to a good cause justification as required by HUD for all waivers. HUD expects waivers to be rare and in response to unique circumstances meeting the intent of HUD's Previous Participation Review regulations. Program Requirements The below sections outline who is subject to a previous participation review, submission requirements, review procedures, approval and rejection processes as well as participant flagging. A. Controlling Participants for Previous Participation Review Purposes Previous Participation Review is required for Controlling Participants. In connection with each Triggering Event, Mortgagees in insured projects and entities serving in the Specified Capacities listed below in non-insured projects shall provide to HUD a list of all Controlling Participants. Controlling Participants are those entities and individuals (i) serving as a Specified Capacity with respect to a Covered Project and (ii) the entities and individuals in control of the Specified Capacities. At least one natural person must be identified as a Controlling Participant for each Specified Capacity. The chart below shows the Specified Capacities for the listed programs. Specified Capacities ---------------------------------------------------------------------------------------------------------------- Office of Office of Multifamily residential care hospital housing facilities facilities ---------------------------------------------------------------------------------------------------------------- Borrower or Owner................................... X X X Management Agent.................................... X X .................. Operator............................................ .................. X X General Contractor.................................. X X X Construction Manager................................ .................. .................. X Master Tenant/Landlord.............................. .................. X .................. ---------------------------------------------------------------------------------------------------------------- Controlling Participants. The entities serving as a Specified Capacity are Controlling Participants of the Covered Project for the programs listed. In addition, the individuals and entities determined by HUD to exercise financial or operational control over these entities are also Controlling Participants. Controlling Participants require Previous Participation Review and must complete Previous Participation Review submissions. Any individual or entity who exercises financial or operational control of a Specified Capacity is considered to be a Controlling Participant and required to complete a Previous Participation Review submission, unless excluded below. Controlling Participants include both entities and natural persons. If a Controlling Participant is an entity, the submission must include the people who exercise the day-to-day control for that entity. [[Page 30498]] Notwithstanding the foregoing or anything else in this Guide, if HUD determines that an individual or entity does not actually exercise financial or operational control of a Covered Project or Specified Capacity, such individual or entity shall not be considered a Controlling Participant. List of Controlling Participants: For purposes of Previous Participation Review, unless excluded below or otherwise determined by HUD not to be a Controlling Participant, the following shall be considered Controlling Participants: 1. Entities and individuals owning, directly or indirectly, 25% or more of a Specified Capacity. 2. Any officers and other executive management (including Executive Director and other similar capacities) of the Specified Capacity. 3. The controlling owners (entities and/or individuals) of the entity that controls the Specified Capacity. 4. Managers or managing members of Limited Liability Companies (LLCs). 5. General partners of limited partnerships, including ``administrative'' general partners or other general partners if they exercise day-to-day control over the entity. 6. Partners in a general partnership. 7. Executive Director (or equivalent position) of a non-profit sponsor of a Specified Capacity. 8. With respect to non-profit Borrowers under the Section 242 program, the executive management of the Borrower and the members of the Board of Directors that HUD determines have control over the finances or operation of the hospital. 9. Officers of a for-profit corporation's Board of Directors. 10. Controlling stockholders of a corporation. 11. Trustees of a trust. 12. For real estate investment trusts (REITs), the REIT itself, the chief executive officer (or equivalent position) and all company officers (except those officers determined by HUD not to exercise day-to-day control over the REIT, the Specified Capacity or the Covered Project) must file. 13. For insured projects, if applicable, the person (people) and/or entity (entities) to be listed on the Regulatory Agreement Non-Recourse Debt section. 14. Any other person or entity determined by HUD to exercise day-to-day control over a Specified Capacity. This may include any officers, directors or members of an executive management team (even of excluded entities) who would otherwise not be required to make a submission if they are exercising control over the Specified Capacity. If the applicant or Mortgagee has any reason to believe that any Controlling Participant is not of sound mind or body or is otherwise incapacitated, such information must be disclosed to HUD to review and determine whether another individual is acting as a Controlling Participant. List of Exclusions: Except that any Specified Capacity is a Controlling Participant, and unless otherwise determined in writing by HUD in a specific transaction to exercise day-to-day control of a Covered Project or Specified Capacity, Controlling Participants do not include the following: 1. Wholly-owned entities. Any entity that is 100% owned or controlled by one individual or entity is excluded. Such entities are not exercising control; the individual or entity that wholly owns them is exercising control. An organizational chart may include one or more tiers of wholly-owned entities. All wholly-owned entities in all tiers are excluded. 2. Shell entities. Entities that do not take actions themselves but only serve as legal vehicles through which the partners, members or owners of such entity take actions are excluded. These entities are not exercising control, the partners, members or owners of such entity are controlling. The ``middle tiers'' of an organizational chart are often shell entities. For example, if a Borrower LLC's managing member (``MM A'') is a joint venture partnership (``JV B'') of two entities (``P 1'' and ``P 2'') and that joint venture's organizational documents indicate that the day-to-day control of the joint venture is exercised by one of the two partners (P 1), then all of those entities, except P 1 is excluded. None of MM A, JV B or P 2 are Controlling Participants of the Borrower. 3. Tax credit investors. Syndicator and direct investor entities in Low-Income Housing Tax Credits, Historic Tax Credits, New Markets Tax Credits or other tax credits (if HUD determines such credits are substantially similar to the listed tax credits) are excluded unless such entities exercise day-to-day control or seek other involvement that would trigger the need for previous participation review. HUD may still require a so-called ``LLCI certification,'' an ``Identification and Certification of Eligible Limited Liability Investor Entities,'' ``Passive Investor Certification'' or any other such certification. 4. Passive participants. If an entity's organizational documents specify which members, partners or owners are authorized to exercise day-to-day control of that entity, then any other members, partners or owners who are not authorized to exercise state day-to-day control of an entity are excluded. 5. Minor officers. If HUD determines that an officer of a corporation or other entity does not have significant involvement in a Covered Project, such officers are excluded. If all the officers of the entity certify as to who have significant and insignificant involvement, this certification shall be evidence of the significant and insignificant involvement. 6. Members of a Board of Directors. Members of a non-profit or for-profit corporation's board of directors who do not exercise control over the corporation in another capacity (for example, as Executive Director or other manager or officer of the non-profit corporation) are excluded. This exclusion does not apply to the members of boards of directors of hospitals, the rule for which is specified in the Regulation and captured in #8 within the Listing of Controlling Participants above. 7. Less than 25% ownership interest. Unless exercising control through another capacity, members, partners, stakeholders and owners of entities with less than a 25% interest in an entity are excluded. This exclusion does not apply to any such member, partner, stakeholder or other owner of an entity (``Proposed Excluded Member'') who would have an interest greater than 25% if the combined percentages of all other members, partners, stakeholders or other owners (including beneficial interests in trusts) with whom the Proposed Excluded Member has an ``Identity of Interest'' or other conflict of interest because of familial relation or common financial interest exceeds 25%. Whether an Identity of Interest or other conflict of interest exists is determined by HUD. If the program requirements of the applicable program in which the Covered Project is participating speak to Identify of Interest or other conflict of interest, those program requirements control. 8. Nursing Homes and Assisted Living Facilities. With respect to projects under the Section 232 program, the nursing home administrator of nursing homes and equivalent positions in assisted living facilities are excluded. 9. Publicly Held Companies. For publicly held companies, the chief executive officer (or equivalent position), the controlling shareholder (if any), and project manager(s) or other individual(s), if any, identified as must having day-to-day control over a Specified Capacity or Covered Project must file but the publicly held company shall otherwise treated as an individual without need for other individual shareholders to file certifications in their individual capacity or identify their social security or tax identification numbers. 10. No Exercise of Financial or Operational Control. Any individual or entity determined by HUD not to exercise financial or operational control of a Covered Project or Specified Capacity shall not be considered a Controlling Participant. B. Organization Charts An organization chart must be submitted for each Specified Capacity and for any entity within the organization chart if requested by HUD. Organization charts are visual representations of the ownership structure of an organization. All organization charts submitted in connection with a Triggering Event are considered part of the application for HUD review and subject to the certifications stating that the application is true and complete. The organization chart must be clear enough so that a person unfamiliar with the Covered Project and the entities involved can understand the ownership and control structure. The organization chart must include the following: 1. Clearly show all tiers of the ownership structure, including the members or owners of the entities listed. 2. Show all participants, not just those who the Lender or Applicant considers to be principals or Controlling Participants. To the extent ownership interests are identified as widely held, the Applicant must provide any information requested by HUD regarding such interests. 3. Shows percentages of ownership and role in the entity (e.g. Limited Partner, General Partner, Managing Member, Tax Credit Syndicator/Investor, etc.). [[Page 30499]] 4. At least one natural person, and not just entities. 5. Each Specified Capacity must be shown on a separate organization chart (e.g. Borrower, Operator, Management Agent, Master Tenant, etc.). 6. Anyone on an organizational chart that is debarred, suspended, or is subject to a Limited Denial of Participation (LDP), a voluntary abstention or a voluntary exclusion may not participate in the Covered Project. 7. With respect to each entity on the organization chart, the executive management teams (for example, all officers such as CEO, CFO, President, Executive Director, etc., but not department heads or lower level management) and any members of a Board of Directors must be disclosed to HUD even if such individuals are not considered to be Controlling Participants and do not need to file Previous Participation Review submissions. C. Filing the Previous Participation Certification To fulfill the Previous Participation Review requirements, applicable controlling participants must file a Previous Participation Certification. Participants may utilize either the electronic Active Partners Performance System (APPS) or a paper alternative. Participants should not file both an APPS submission and a paper form. HUD strongly encourages participants to utilize the APPS system. As part of the Previous Participation Certification, participants are only required to list all projects which they have participated in over the previous 10 year period. However, HUD reserves the right to review and consider a participant's previous participation in a federal project beyond the 10 year period when determining whether to approve participation in the project associated with an application. The following chart indicates which filing options are available for which programs. --------------------------------------------------------------------------- \3\ Consolidated Certifications are the following forms: HUD 90013-ORCF, Consolidated Certification-Borrower, HUD 90014-ORCF, Consolidated Certification-Principal of the Borrower, HUD 90015- ORCF, Consolidated Certification-Operator, HUD 90017-ORCF, Consolidated Certification-Management Agent, and HUD 90018-ORCF, Consolidated Certification-General Contractor. ---------------------------------------------------------------------------------------------------------------- Multifamily housing & grant Office of Office of Filing method administration residential care hospital projects facilities facilities ---------------------------------------------------------------------------------------------------------------- Active Partners Performance System (APPS) Submission X X X ---------------------------------------------------------------------------------------------------------------- OR ---------------------------------------------------------------------------------------------------------------- Form HUD-2530 (paper)............................... X .................. X ---------------------------------------------------------------------------------------------------------------- Consolidated Certification \3\ Previous .................. X .................. Participation Section (paper)...................... ---------------------------------------------------------------------------------------------------------------- Active Partners Performance System (APPS) Submission Instructions ------------------------------------------------------------------------ ------------------------------------------------------------------------ HUD has made several upgrades to the system to improve the applicant submission process. For example, HUD now allows for electronic signatures of APPS submissions, ability to upload submission packages, and has improved the baseline submission to allow for edits. HUD encourages participants to utilize the APPS system when filing the Previous Participation Certification as it saves a substantial amount of time and allows for faster review of submissions by HUD reviewers. Here is a link to the APPS resources: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/apps/appsmfhm. ------------------------------------------------------------------------ For questions about the APPS system contact the Multifamily Housing Systems Help Desk by phone at (800) 767-7588 or [email protected]. ------------------------------------------------------------------------ Step 1: System Registration....... This step registers Controlling Participants in the APPS system. See the APPS Quick Tips for detailed instructions on the registration process: http://portal.hud.gov/hudportal/documents/huddoc?id=appsquicktips.pdf. Step 2: Create a Baseline......... This step establishes the organization structure and previous participation of Controlling Participants. See Chapter 2 of the APPS Userguide for specific instructions and screen shots: http://portal.hud.gov/hudportal/documents/huddoc?id=chapter2.pdf. Step 3: Create a Property This step creates a submission for a Submission. Controlling Participant's role in a specific project. See Chapter 3 of the APPS Userguide for specific instructions and screen shots: http://portal.hud.gov/hudportal/documents/huddoc?id=chapter3.pdf. Step 4: Complete the Certification In this step Controlling and Submit to HUD. Participants electronically certify to previous participation certifications and send the submission to HUD for review. See Chapter 7 of the APPS Userguide for specific instructions and screen shots: http://portal.hud.gov/hudportal/documents/huddoc?id=CHAPTER7.PDF. Step 5: Upload the Organization The user uploads the Organization Chart with the Signature Pages. Chart and Signature Pages into the APPS system. See Section B for a description of what the organization chart must include. ------------------------------------------------------------------------ Form HUD-2530 Completion Instructions \4\ [It is the participant's responsibility to assure that the Form HUD-2530 is correct, complete and accurate.] ------------------------------------------------------------------------ Form section Instructions ------------------------------------------------------------------------ Review certification language..... The participant should assure that compliance with the certification is met. If there is a certification that a controlling participant cannot certify to, the participant must strikethrough that particular certification, initial the strikethrough and attach a signed letter of explanation. This situation should be rare. Block 2........................... List Project Name and Number. Block 7........................... Controlling Participants on the organization chart must match Block 7. Blocks 8 and 9.................... Write ``See Organization Chart.'' Block 10.......................... Insert Social Security Number or Tax ID Number for each Controlling Participant. Bottom of Page 1.................. The Controlling Participants listed in Block 7 must also be listed in the signature block at the bottom of Page 1. [[Page 30500]] The Controlling Participants must sign and date the submission. Authorized person(s) may sign on behalf of other person(s) or entities. It is the signer's responsibility to assure that they are authorized to sign on behalf of others. Each signature block must include a signature. Schedule A........................ All principals listed in Block 7 must be listed in Column 1 Column 2 must include all previous participation from the past 10 years in: (a) Covered Projects, (b) housing projects with current flags under the U.S. Department of Agriculture's previous participation review system and (c) any other housing project participating in a federal, state or local or government program if during the Controlling Participant's participation in the housing project (i) the housing project was foreclosed upon; (ii) the housing project was transferred by a deed in lieu of foreclosure; or (iii) an event of default, or similarly termed event, was declared against the housing project or the Controlling Participant pursuant to the government program's project documents. Controlling Participants with No Previous Participation should write ``No Previous Participation, First Experience.'' Principal roles must be included in Column 3 The Status of the Loan must be listed in Column 4. Note: This section is not applicable for General Contractors that did not have ownership interest in the project. Identify (checkbox) whether the project was ever in default during the participant's participation in Column 5. If the ``yes'' box is checked a detailed explanation of the circumstances (including mitigating factors) must be provided. Note: This section is not applicable for General Contractors that did not have ownership interest in the project. List the latest Management Review and Physical Inspection dates and scores in Column 6. If there are no scores, write ``None.'' Note: This section is not applicable for General Contractors that did not have ownership interest in the project. Business Partner Registration Each Controlling Participant must be System (BPRS) Registration. registered in the BPRS System. Here is a link: https://hudapps2.hud.gov/apps/part_reg/apps040.cfm Organization Chart................ Attach an organization chart. See Section B for a description of what the organization chart must include. ------------------------------------------------------------------------ Consolidated Certification Completion Instructions [It is the participant's responsibility to assure that the Consolidated Certification is correct, complete and accurate.] ------------------------------------------------------------------------ Form Section Instructions ------------------------------------------------------------------------ Review certification language in The participant should assure that the Consolidated Certification compliance with the certification \5\. is met. Attachment 1...................... Participants with Previous Participation must complete Attachment 1 of the Consolidated Certification for projects participated in over the past 10 years. Include all previous participation from the past 10 years in: (a) Covered Projects, (b) housing projects with current flags under the U.S. Department of Agriculture's previous participation review system and (c) any other housing project participating in a federal, state or local or government program if during the Controlling Participant's participation in the housing project (i) the housing project was foreclosed upon; (ii) the housing project was transferred by a deed in lieu of foreclosure; or (iii) an event of default, or similarly termed event, was declared against the housing project or the Controlling Participant pursuant to the government program's project documents. Business Partner Registration Each Controlling Participant must be System (BPRS) Registration. registered in the BPRS System. Here is a link: https://hudapps2.hud.gov/apps/part_reg/apps040.cfm. Organization Chart................ Attach an organization chart with Social Security Numbers or Tax ID numbers for Controlling Participants. See Section B for a description of additional items the organization chart must include. ------------------------------------------------------------------------ D. Approval of Participants If there are no flags in the system and the applicant is able to make all the certifications or HUD has approved any reason why a certification cannot be made, the Previous Participation Review is considered complete and the submission will be approved. --------------------------------------------------------------------------- \4\ Until further notice, if using the paper Form HUD-2530, use these instructions. \5\ If there is a certification that a controlling participant cannot certify to, the participant must strikethrough that particular certification, initial the strikethrough and attach a signed letter of explanation. This situation should be rare. --------------------------------------------------------------------------- If there are current flags in the system, HUD staff will review: The comments in the system related to the flag The lender or participant's explanation of the flag and any mitigation of risk associated with the flag. Whether flags need to be resolved. The flag history in the system to assess patterns of misconduct and risk to the Department. Based upon this review, including review of the certifications, HUD will determine whether or not the Controlling Participant poses an unacceptable Risk to the Covered Project, in accordance with the definition in 24 CFR 200.212, namely whether the Controlling Participant could be expected to participate in the Covered Project in a manner consistent with furthering the Department's purpose of supporting and providing decent, safe and affordable housing for the public. Based on this determination, HUD may approve, disapprove, limit, or otherwise condition the continued participation of the Controlling Participant in the Triggering Event. HUD will disapprove a Controlling Participant if the Controlling Participant is suspended, debarred or subject to other restriction pursuant to 2 CFR part 180 or 2 CFR part 2424. HUD may disapprove a Controlling Participant if HUD determines: (i) The Controlling Participant is materially restricted, including voluntarily, from doing business with HUD (other than the restrictions listed above) or any other [[Page 30501]] department or agency of the federal government if the Commissioner determines that such restriction demonstrates a significant risk to proceeding with the Triggering Event; or (ii) HUD determines that the Controlling Participant's record of Previous Participation reveals significant risk to proceeding with the Triggering Event. In lieu of disapproval, HUD may (1) condition or limit the Controlling Participant's participation; (2) temporarily withhold issuing a determination in order to gather more necessary information; or (3) require the Controlling Participant to remedy or mitigate outstanding violations of HUD requirements to the Commissioner's satisfaction in order to participate in the Triggering Event. A remedy or mitigation may include resolving any underlying issues that caused the existing flags or other measures that demonstrate to HUD's satisfaction that that the Controlling Participant could be expected to participate in the Covered Project in a manner consistent with furthering the Department's purpose of supporting and providing decent, safe and affordable housing for the public. Approval of Participants With Flags ---------------------------------------------------------------------------------------------------------------- Office of Multifamily Housing & Assisted Housing Oversight Division, Office of 220, 221(d)(4), 223(a)(7), 223(f), Residential Office of Hospital 231, 241(a) Programs Healthcare Facilities ---------------------------------------- Facilities Production Asset management ---------------------------------------------------------------------------------------------------------------- Participants with Tier 1 Flags.. Director of Director of Asset Director, Office Director, Office Multifamily Management of Residential of Hospital Housing Division (HQ). Care Facilities Facilities. Production (HQ). or Delegate. Participants with Tier 2 Flags.. Production Asset Management Supervisory Director, Office Division Director. Division Director. Account Executive. of Hospital Facilities. ---------------------------------------- Participants with Tier 3 Flags.. Branch Chief Supervisory Director, Office Account Executive. of Hospital Facilities. ---------------------------------------------------------------------------------------------------------------- E. Rejection of Participants If a recommendation for rejection is proposed, HUD staff will notify the participant, or lender, if applicable, in advance of the recommendation. This notification will allow an opportunity for the participant to provide additional arguments for HUD's consideration to preserve processing efficiency and cut down on requests for reconsideration. Rejection of Participants With Flags ---------------------------------------------------------------------------------------------------------------- Office of Multifamily Housing & Assisted Housing Oversight Division, Office of 220, 221(d)(4), 223(a)(7), 223(f), Residential Office of Hospital 231, 241(a) Programs Healthcare Facilities ---------------------------------------- Facilities Production Asset management ---------------------------------------------------------------------------------------------------------------- Participants with Tier 1, Tier 2 Regional Director or Delegate Division Director, Division Director, or Tier 3 Flags. Office of Office of Residential Care Hospital Facilities or Facilities. Delegate. ---------------------------------------------------------------------------------------------------------------- F. Reconsideration of a Rejection Participants have the right to request a reconsideration of HUD decisions rejecting participants. Requests for reconsideration must be filed in writing. Participants may provide support for their reconsideration or additional information that was not previously provided. Please see the below table for the officials responsible for rendering reconsideration decisions applicable to each program area. The decision rendered by the officials below is final agency action. Reconsideration of a Rejection ------------------------------------------------------------------------ Office of Healthcare Programs --------------------------------------- Office of Multifamily Housing & Office of Assisted Housing Oversight Residential Office of Hospital Division Healthcare Facilities Facilities ------------------------------------------------------------------------ Director, Office of Asset Director, Office Director, Office Management and Portfolio of Residential of Hospital Oversight or Delegate. Care Facilities Facilities or or Delegate. Delegate. ------------------------------------------------------------------------ G. Flag Placement and Resolution HUD utilizes flags in the APPS system as a way to assess risk associated with participants in Office of Multifamily Housing and Office of Healthcare Programs projects. A flag does not automatically exclude an applicant from participation in HUD's programs; however, flags are considered risk factors that require appropriate mitigation, where possible. Flags are to be a meaningful representation of risk, and therefore, they should not be placed for minor infractions that do not pose a risk to HUD. HUD will notify participants in writing when flags are placed. H. Types of Flags HUD has developed three flag tiers, which provide for varying levels of risk to HUD. Tier 1 flags are elevated risk to HUD. HUD considers Tier 1 flags to be a significant long-term risk to HUD and warrant significant mitigation in new transactions. Tier 2 flags are considered an ongoing risk to HUD. For Tier 2 flags that have a resolution date (as listed in the chart below), flags will not be removed until the time period has expired even if the action has been resolved earlier. This is considered a risk factor in production and asset management transactions. Tier 3 flags are considered a single risk to HUD and will be removed when the reason for the flag is corrected. [[Page 30502]] Tier 1 Flags: Elevated Risk to the Department Tier 1 flags warrant permanent consideration when reviewing Controlling Participants for their participation in triggering events. ---------------------------------------------------------------------------------------------------------------- Flag type Reason Duration of flag ---------------------------------------------------------------------------------------------------------------- Mortgage Assignment/Conveyance of Mortgage assigned title or Permanent flag. * Title. conveyed property to HUD. FHA Claim............................. Claim payment by HUD.......... Permanent flag. * HUD Property Disposition.............. Foreclosure, loan sale, or Permanent flag. * other property disposition effort by HUD. Mortgagee in Possession (MIP)......... HUD becomes the MIP........... Permanent flag. * Deed in Lieu of Foreclosure........... HUD receives a deed in lieu of Permanent flag. * foreclosure. Limited Denial of Participation (LDP)-- Participant is currently or Permanent flag. Current or Past. has previously been placed on the LDP list. Suspension or Debarment--Current or Participant is currently or Permanent flag. Past. has previously been placed on the Debarment list or the participant is or was temporarily suspended from participation in HUD programs. Voluntary Abstention or Exclusion-- Participant is currently or Permanent flag. Current or Past. has previously been subject to a voluntary abstention. Conviction for fraud or embezzlement Participant has been convicted Permanent flag. of funds. of fraud or embezzlement of funds. ---------------------------------------------------------------------------------------------------------------- * Unless otherwise determined by HUD due to mitigating circumstances. Tier 2 Flags: Ongoing Risk to the Department Tier 2 flags warrant consideration for an extended period of time when reviewing Controlling Participants for their participation in Triggering Events, even after the underlying reason for the flag is resolved. A ``Repeated'' Offense means there are three or more occurrences. ------------------------------------------------------------------------ Flag type Reason Duration of flag ------------------------------------------------------------------------ Violation of Business Repeated incidents Retained for five Agreements-Unauthorized of Unauthorized (5) years after the Distributions. Distributions. placement date of the flag. Violation of Business Below 30 Real Estate Retained for five Agreements-Unacceptable Assessment Center (5) years after Physical Condition. (REAC) score, two placement of the consecutive REAC flag, so long as scores below 60, the most recent Repeated REAC REAC score is scores below 60, or greater than 59 or other Repeated the failure to failures to maintain decent, maintain decent, safe and sanitary safe and sanitary housing is deemed conditions. cured by HUD. Violation of Business Repeated Failure to Retained for five Agreements-Repeated Failure File Financial (5) years after the to File Financial Statements for placement date of Statements. three or more the flag. occurrences. Violation of Business Project was Retained for five Agreements-Conversion to converted to a use (5) years after the Unapproved Use. that is not placement date of permitted under the the flag. program obligations. Violation of Business Project or part of Retained for five Agreements-Unauthorized the project (5) years after the Alteration to Facility. completed a placement date of significant the flag. addition/alteration/ construction/ licensure status without prior approval. Violation of Business Repeated Unresolved Retained for five Agreements-Repeated Audit Findings. (5) years after the Unresolved Audit Findings. placement date of the flag provided that audit findings have been resolved. Violation of Business Repeated violations Retained for five Agreements-Miscellaneous. of business (5) years after the agreements (e.g., placement date of breaking use the flag. agreement or affordability restrictions, non- compliance with program requirements, non- responsive to HUD requests). Default-Financial........... 60 days or more Retained for five behind on loan (5) years after the payments. placement date of the flag. Unauthorized Transfer of When a TPA is Retained for five Physical Assets (TPA). completed without (5) years after the prior HUD approval. placement date of the flag. Suspension/Termination of When HUD suspends Retained for five Payments. subsidy payments (5) years after the due to non- placement date of compliance with the flag. Program Obligations. Unauthorized Secondary When Secondary Retained for five Financing. Financing is (5) years after the utilized without placement date of prior HUD approval. the flag. General Contractor Material failure to Retained for five Performance--Construction build project in (5) years after the Compliance. accordance with placement date of approved Plans and the flag provided Specifications that noncompliance (During has been cured to Construction HUD's satisfaction. Period). General Contractor Failure to correct Retained for five Performance--One Year material warranty (5) years after the Warranty. issues identified placement date of in HUD's Nine-Month the flag provided and 12-Month that noncompliance Warranty has been cured to Inspections (After HUD's satisfaction. Construction Period). ------------------------------------------------------------------------ [[Page 30503]] Tier 3 Flags: Temporary Risk to the Department Tier 3 flags relate to a single and/or less serious incident of non-compliance and can be resolved and removed. ------------------------------------------------------------------------ Flag type Reason Duration of flag ------------------------------------------------------------------------ Failure to File Financial Automatically Removed when the Statements. Flagged when the missing Annual Annual Financial Financial Statements are Statements are overdue. filed or five (5) years after the placement date of the flag, whichever is sooner. Delinquent three or more Flagged when Removed when there times in the last year. borrower fails to is a one-year remit mortgage period of time in payment by the which borrower has fifteenth of the made all mortgage month, three or payments by the more times in a fifteenth of each given one-year respective month, period. or five (5) years after the placement date of the flag, whichever is sooner. Unacceptable Physical Most recent REAC Removed when the Condition. score is below 60, most recent REAC and additional score is above 59. (does not need to be consecutive) REAC score(s) below 60 over the past five years.. Unsatisfactory Management Flagged when there Removed when there Review. is an is a Satisfactory Unsatisfactory Management Review, Management Review. or five (5) years after the placement date of the flag whichever is sooner. Violation of Business One incident of Removed when the Agreements-Unauthorized Unauthorized unauthorized Distributions. Distributions. distribution is repaid or five (5) years after the placement date of the flag whichever is sooner. Violation of Business Material Unresolved Removed when the Agreements-Material Audit Findings. finding is resolved Unresolved Audit Findings. or five (5) years after the placement date of the flag whichever is sooner. Failure to Provide or Comply Failure to provide Removed when the with Action Plan. or comply with a action plan is HUD required action received and in plan and/or good standing or certification in a five (5) years timely manner.. after the placement date of the flag whichever is sooner. ------------------------------------------------------------------------ Significant Changes to the Guide HUD will not make any significant changes to the Guide without first offering advance notice and the opportunity for comment for a period of not less than 30 days. [FR Doc. 2016-11346 Filed 5-16-16; 8:45 am] BILLING CODE 4210-67-P
![30495
Proposed Rules Federal Register
Vol. 81, No. 95
Tuesday, May 17, 2016
This section of the FEDERAL REGISTER Office of General Counsel, Department FOR FURTHER INFORMATION CONTACT:
contains notices to the public of the proposed of Housing and Urban Development, Aaron Hutchinson, Office of Housing,
issuance of rules and regulations. The 451 7th Street SW., Room 10276, Department of Housing and Urban
purpose of these notices is to give interested Washington, DC 20410–0500. Development, 451 7th Street SW., Room
persons an opportunity to participate in the Communications must refer to the above 6178, Washington, DC 20410; telephone
rule making prior to the adoption of the final
docket number and title. There are two number 202–708–3994 (this is not a toll-
rules.
methods for submitting public free number). Individuals with speech
comments. All submissions must refer or hearing impairments may access this
DEPARTMENT OF HOUSING AND to the above docket number and title. number through TTY by calling the toll-
URBAN DEVELOPMENT 1. Submission of Comments by Mail. free Federal Relay Service at 800–877–
Comments may be submitted by mail to 8339 (this is not a toll-free number).
24 CFR Part 200 the Regulations Division, Office of SUPPLEMENTARY INFORMATION:
General Counsel, Department of
[Docket No. FR–5850–N–03] I. Background
Housing and Urban Development, 451
RIN 2502–AJ28 7th Street SW., Room 10276, On August 10, 2015, at 80 FR 47874,
Washington, DC 20410–0001. HUD published a document that
Retrospective Review—Improving the 2. Electronic Submission of proposed to amend its regulations, at 24
Previous Participation Reviews of Comments. Interested persons may CFR part 200, subpart H, that govern the
Prospective Multifamily Housing and submit comments electronically through process by which HUD reviews the
Healthcare Programs Participants; the Federal eRulemaking Portal at previous participation and performance
Supplemental Notice of Proposed www.regulations.gov. HUD strongly of applicants seeking to participate in
Rulemaking encourages commenters to submit HUD’s multifamily and healthcare
comments electronically. Electronic programs. Currently, all principals
AGENCY: Office of the Assistant seeking to participate in HUD’s
submission of comments allows the
Secretary for Housing, HUD. multifamily housing and healthcare
commenter maximum time to prepare
ACTION: Supplemental notice of and submit a comment, ensures timely programs must certify that all principals
proposed rulemaking. receipt by HUD, and enables HUD to involved in a proposed project have
make them immediately available to the acted responsibly and have honored
SUMMARY: On August 10, 2015, HUD their legal, financial, and contractual
public. Comments submitted
published in the Federal Register, a obligations in their previous
electronically through the
proposed rule that would revise HUD’s participation in HUD programs, in
www.regulations.gov Web site can be
regulations for reviewing the previous certain programs administered by the
viewed by other commenters and
participation of Federal programs of U.S. Department of Agriculture, and in
interested members of the public.
certain participants seeking to take part projects assisted or insured by state and
Commenters should follow the
in multifamily housing and healthcare local government housing finance
instructions provided on that site to
programs administered by HUD’s Office agencies. HUD’s regulations require
submit comments electronically.
of Housing. Specifically, the rulemaking applicants to complete a very detailed
proposed to clarify and simplify the Note: To receive consideration as public and lengthy certification form (HUD
process by which HUD reviews the comments, comments must be submitted
Form 2530) 1 of participants that have
previous participation of participants through one of the two methods specified
above. Again, all submissions must refer to decision-making authority over their
that have decision-making authority the docket number and title of the document. projects as one component of HUD’s
over their projects as one component of No Facsimile Comments. Facsimile (FAX) responsibility to assess financial and
HUD’s responsibility to assess financial comments are not acceptable. operational risk to the projects in these
and operational risk to the projects in programs.
these programs. The approach offered Public Inspection of Public The August 10, 2015, proposed rule
by the proposed rule was to not only Comments. All properly submitted proposed to clarify which individuals
bring greater certainty and clarity to the comments and communications and entities will be reviewed, the
process but greater flexibility, avoiding submitted to HUD will be available for purpose of the review, and the review
a one-size fits all approach. public inspection and copying between to be undertaken. HUD proposed by
This document opens the public 8 a.m. and 5 p.m. weekdays at the above targeting more closely the individuals
comment period solely for the address. Due to security measures at the and actions that would be subject to
provisions addressed in this document HUD Headquarters building, an advance prior participation review, HUD would
to address concerns that while the appointment to review the public not only bring greater certainty and
proposed rule provided greater comments must be scheduled by calling clarity to the process but would provide
flexibility, it lacked the greater certainty the Regulations Division at 202–708– HUD with flexibility as to the necessary
3055 (this is not a toll-free number).
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to which HUD committed, and how previous participation review for
HUD would provide such certainty. Individuals with speech or hearing entities and individuals that is not
impairments may access this number possible in a one-size fits all approach.
DATES: Comment Due Date: June 16,
via TTY by calling the toll-free Federal The public comment period on the
2016. Relay Service at 800–877–8339. Copies proposed rule closed on October 9,
ADDRESSES: Interested persons are of all comments submitted are available
invited to submit comments regarding for inspection and downloading at 1 See http://portal.hud.gov/hudportal/documents/
this notice to the Regulations Division, www.regulations.gov. huddoc?id=2530.pdf.
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4. At least one natural person, and not just Director, etc., but not department heads or alternative. Participants should not file both
entities. lower level management) and any members an APPS submission and a paper form. HUD
5. Each Specified Capacity must be shown of a Board of Directors must be disclosed to strongly encourages participants to utilize the
on a separate organization chart (e.g. HUD even if such individuals are not APPS system. As part of the Previous
Borrower, Operator, Management Agent, considered to be Controlling Participants and Participation Certification, participants are
Master Tenant, etc.). do not need to file Previous Participation only required to list all projects which they
6. Anyone on an organizational chart that Review submissions. have participated in over the previous 10
is debarred, suspended, or is subject to a C. Filing the Previous Participation year period. However, HUD reserves the right
Limited Denial of Participation (LDP), a Certification to review and consider a participant’s
voluntary abstention or a voluntary exclusion To fulfill the Previous Participation Review previous participation in a federal project
may not participate in the Covered Project. requirements, applicable controlling beyond the 10 year period when determining
7. With respect to each entity on the participants must file a Previous whether to approve participation in the
organization chart, the executive Participation Certification. Participants may project associated with an application.
management teams (for example, all officers utilize either the electronic Active Partners The following chart indicates which filing
such as CEO, CFO, President, Executive Performance System (APPS) or a paper options are available for which programs.
Multifamily Office of Office of
housing & grant
Filing method residential care hospital
administration facilities facilities
projects
Active Partners Performance System (APPS) Submission ...................................... X X X
OR
Form HUD–2530 (paper) ........................................................................................... X .............................. X
Consolidated Certification 3 Previous Participation Section (paper) ......................... .............................. X ..............................
ACTIVE PARTNERS PERFORMANCE SYSTEM (APPS) SUBMISSION INSTRUCTIONS
HUD has made several upgrades to the system to improve the applicant submission process. For example, HUD now allows for electronic sig-
natures of APPS submissions, ability to upload submission packages, and has improved the baseline submission to allow for edits. HUD en-
courages participants to utilize the APPS system when filing the Previous Participation Certification as it saves a substantial amount of time
and allows for faster review of submissions by HUD reviewers.
Here is a link to the APPS resources: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/apps/appsmfhm.
For questions about the APPS system contact the Multifamily Housing Systems Help Desk by phone at (800) 767–7588 or Apps-
F24p@hud.gov.
Step 1: System Registration ........... This step registers Controlling Participants in the APPS system. See the APPS Quick Tips for detailed in-
structions on the registration process: http://portal.hud.gov/hudportal/documents/
huddoc?id=appsquicktips.pdf.
Step 2: Create a Baseline .............. This step establishes the organization structure and previous participation of Controlling Participants. See
Chapter 2 of the APPS Userguide for specific instructions and screen shots: http://portal.hud.gov/
hudportal/documents/huddoc?id=chapter2.pdf.
Step 3: Create a Property Submis- This step creates a submission for a Controlling Participant’s role in a specific project. See Chapter 3 of
sion. the APPS Userguide for specific instructions and screen shots: http://portal.hud.gov/hudportal/docu-
ments/huddoc?id=chapter3.pdf.
Step 4: Complete the Certification In this step Controlling Participants electronically certify to previous participation certifications and send the
and Submit to HUD. submission to HUD for review. See Chapter 7 of the APPS Userguide for specific instructions and
screen shots: http://portal.hud.gov/hudportal/documents/huddoc?id=CHAPTER7.PDF.
Step 5: Upload the Organization The user uploads the Organization Chart and Signature Pages into the APPS system. See Section B for a
Chart with the Signature Pages. description of what the organization chart must include.
FORM HUD–2530 COMPLETION INSTRUCTIONS 4
[It is the participant’s responsibility to assure that the Form HUD–2530 is correct, complete and accurate.]
Form section Instructions
Review certification language ......... The participant should assure that compliance with the certification is met. If there is a certification that a
controlling participant cannot certify to, the participant must strikethrough that particular certification, ini-
tial the strikethrough and attach a signed letter of explanation. This situation should be rare.
Block 2 ............................................ List Project Name and Number.
Block 7 ............................................ Controlling Participants on the organization chart must match Block 7.
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Blocks 8 and 9 ................................ Write ‘‘See Organization Chart.’’
Block 10 .......................................... Insert Social Security Number or Tax ID Number for each Controlling Participant.
Bottom of Page 1 ............................ The Controlling Participants listed in Block 7 must also be listed in the signature block at the bottom of
Page 1.
3 Consolidated Certifications are the following Consolidated Certification-Principal of the Consolidated Certification-Management Agent, and
forms: HUD 90013–ORCF, Consolidated Borrower, HUD 90015–ORCF, Consolidated HUD 90018–ORCF, Consolidated Certification-
Certification-Borrower, HUD 90014–ORCF, Certification-Operator, HUD 90017–ORCF, General Contractor.
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FORM HUD–2530 COMPLETION INSTRUCTIONS 4—Continued
[It is the participant’s responsibility to assure that the Form HUD–2530 is correct, complete and accurate.]
Form section Instructions
The Controlling Participants must sign and date the submission.
Authorized person(s) may sign on behalf of other person(s) or entities. It is the signer’s responsibility to as-
sure that they are authorized to sign on behalf of others. Each signature block must include a signature.
Schedule A ...................................... All principals listed in Block 7 must be listed in Column 1
Column 2 must include all previous participation from the past 10 years in: (a) Covered Projects, (b) hous-
ing projects with current flags under the U.S. Department of Agriculture’s previous participation review
system and (c) any other housing project participating in a federal, state or local or government program
if during the Controlling Participant’s participation in the housing project (i) the housing project was fore-
closed upon; (ii) the housing project was transferred by a deed in lieu of foreclosure; or (iii) an event of
default, or similarly termed event, was declared against the housing project or the Controlling Participant
pursuant to the government program’s project documents.
Controlling Participants with No Previous Participation should write ‘‘No Previous Participation, First Experi-
ence.’’
Principal roles must be included in Column 3
The Status of the Loan must be listed in Column 4.
Note: This section is not applicable for General Contractors that did not have ownership interest in the
project.
Identify (checkbox) whether the project was ever in default during the participant’s participation in Column
5. If the ‘‘yes’’ box is checked a detailed explanation of the circumstances (including mitigating factors)
must be provided.
Note: This section is not applicable for General Contractors that did not have ownership interest in the
project.
List the latest Management Review and Physical Inspection dates and scores in Column 6. If there are no
scores, write ‘‘None.’’
Note: This section is not applicable for General Contractors that did not have ownership interest in the
project.
Business Partner Registration Sys- Each Controlling Participant must be registered in the BPRS System. Here is a link: https://
tem (BPRS) Registration. hudapps2.hud.gov/apps/part_reg/apps040.cfm
Organization Chart .......................... Attach an organization chart. See Section B for a description of what the organization chart must include.
CONSOLIDATED CERTIFICATION COMPLETION INSTRUCTIONS
[It is the participant’s responsibility to assure that the Consolidated Certification is correct, complete and accurate.]
Form Section Instructions
Review certification language in the The participant should assure that compliance with the certification is met.
Consolidated Certification 5.
Attachment 1 ................................... Participants with Previous Participation must complete Attachment 1 of the Consolidated Certification for
projects participated in over the past 10 years. Include all previous participation from the past 10 years
in: (a) Covered Projects, (b) housing projects with current flags under the U.S. Department of Agri-
culture’s previous participation review system and (c) any other housing project participating in a federal,
state or local or government program if during the Controlling Participant’s participation in the housing
project (i) the housing project was foreclosed upon; (ii) the housing project was transferred by a deed in
lieu of foreclosure; or (iii) an event of default, or similarly termed event, was declared against the hous-
ing project or the Controlling Participant pursuant to the government program’s project documents.
Business Partner Registration Sys- Each Controlling Participant must be registered in the BPRS System. Here is a link: https://
tem (BPRS) Registration. hudapps2.hud.gov/apps/part_reg/apps040.cfm.
Organization Chart .......................... Attach an organization chart with Social Security Numbers or Tax ID numbers for Controlling Participants.
See Section B for a description of additional items the organization chart must include.
D. Approval of Participants • The comments in the system related to manner consistent with furthering the
If there are no flags in the system and the the flag Department’s purpose of supporting and
applicant is able to make all the certifications • The lender or participant’s explanation providing decent, safe and affordable housing
or HUD has approved any reason why a of the flag and any mitigation of risk for the public. Based on this determination,
certification cannot be made, the Previous associated with the flag. HUD may approve, disapprove, limit, or
Participation Review is considered complete • Whether flags need to be resolved. otherwise condition the continued
and the submission will be approved. • The flag history in the system to assess participation of the Controlling Participant in
If there are current flags in the system, patterns of misconduct and risk to the the Triggering Event. HUD will disapprove a
HUD staff will review: Department. Controlling Participant if the Controlling
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Based upon this review, including review Participant is suspended, debarred or subject
of the certifications, HUD will determine to other restriction pursuant to 2 CFR part
4 Until further notice, if using the paper Form
whether or not the Controlling Participant 180 or 2 CFR part 2424. HUD may disapprove
HUD–2530, use these instructions.
5 If there is a certification that a controlling
poses an unacceptable Risk to the Covered a Controlling Participant if HUD determines:
participant cannot certify to, the participant must Project, in accordance with the definition in (i) The Controlling Participant is materially
strikethrough that particular certification, initial the 24 CFR 200.212, namely whether the restricted, including voluntarily, from doing
strikethrough and attach a signed letter of Controlling Participant could be expected to business with HUD (other than the
explanation. This situation should be rare. participate in the Covered Project in a restrictions listed above) or any other
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Tier 3 Flags: Temporary Risk to the
Department
Tier 3 flags relate to a single and/or less
serious incident of non-compliance and can
be resolved and removed.
Flag type Reason Duration of flag
Failure to File Financial Statements ................... Automatically Flagged when the Annual Fi- Removed when the missing Annual Financial
nancial Statements are overdue. Statements are filed or five (5) years after
the placement date of the flag, whichever is
sooner.
Delinquent three or more times in the last year Flagged when borrower fails to remit mort- Removed when there is a one-year period of
gage payment by the fifteenth of the month, time in which borrower has made all mort-
three or more times in a given one-year pe- gage payments by the fifteenth of each re-
riod. spective month, or five (5) years after the
placement date of the flag, whichever is
sooner.
Unacceptable Physical Condition ....................... Most recent REAC score is below 60, and ad- Removed when the most recent REAC score
ditional (does not need to be consecutive) is above 59.
REAC score(s) below 60 over the past five
years..
Unsatisfactory Management Review .................. Flagged when there is an Unsatisfactory Man- Removed when there is a Satisfactory Man-
agement Review. agement Review, or five (5) years after the
placement date of the flag whichever is
sooner.
Violation of Business Agreements-Unauthorized One incident of Unauthorized Distributions ..... Removed when the unauthorized distribution
Distributions. is repaid or five (5) years after the place-
ment date of the flag whichever is sooner.
Violation of Business Agreements-Material Un- Material Unresolved Audit Findings ................. Removed when the finding is resolved or five
resolved Audit Findings. (5) years after the placement date of the
flag whichever is sooner.
Failure to Provide or Comply with Action Plan .. Failure to provide or comply with a HUD re- Removed when the action plan is received
quired action plan and/or certification in a and in good standing or five (5) years after
timely manner.. the placement date of the flag whichever is
sooner.
Significant Changes to the Guide zone unless authorized by the Sector U.S.C. United States Code
HUD will not make any significant changes Columbia River Captain of the Port or a II. Background, Purpose, and Legal
to the Guide without first offering advance designated representative. We invite Basis
notice and the opportunity for comment for your comments on this proposed
a period of not less than 30 days. rulemaking. The Roy Webster Cross-Channel
[FR Doc. 2016–11346 Filed 5–16–16; 8:45 am] DATES: Comments and related material Swim is an annual event that has been
BILLING CODE 4210–67–P must be received by the Coast Guard on occuring for the last 74 years on the
or before June 16, 2016. Columbia River in the vicinity of Hood
River, OR. Registered participants
ADDRESSES: You may submit comments
DEPARTMENT OF HOMELAND identified by docket number USCG– attend the event on Labor Day each year
SECURITY 2016–0370 using the Federal and are ferried across the Columbia
eRulemaking Portal at http:// River from the Hood River Marina to the
Coast Guard www.regulations.gov. See the ‘‘Public Washington shore to start the event.
Participation and Request for From there the swimmers jump off the
33 CFR Part 165 Comments’’ portion of the ferry and swim back across the river,
SUPPLEMENTARY INFORMATION section for
following a swim lane that is lined with
[Docket Number USCG–2016–0370]
further instructions on submitting volunteers in sailboats, kayaks and
RIN 1625–AA00
comments. paddleboards. Approximately 300
swimmers participate in this event
Safety Zone; Annual Roy Webster FOR FURTHER INFORMATION CONTACT: If annually.
Cross-Channel Swim, Columbia River, you have questions about this proposed The Captain of the Port, Columbia
Hood River, OR rulemaking, call or email Ken River (COTP) has determined that
Lawrenson, Waterways Management potential hazards associated with cross-
AGENCY: Coast Guard, DHS. Division, Marine Safety Unit Portland,
ACTION: Notice of proposed rulemaking. channel swims could be a safety
Coast Guard; telephone 503–240–9319, concern for the event participants, any
email msupdxwwm@uscg.mil. other mariners transiting the area during
SUMMARY: The Coast Guard proposes to
Lhorne on DSK30JT082PROD with PROPOSALS
SUPPLEMENTARY INFORMATION: the event hours, and a potential threat
establish a safety zone on the Columbia
River in Hood River, OR. This action is I. Table of Abbreviations to the marine environment.
necessary to help ensure the safety of The purpose of this rulemaking is to
CFR Code of Federal Regulations
the maritime public during a cross- DHS Department of Homeland Security ensure the safety of event participants,
channel swimming event and would do FR Federal Register the marine environment and the
so by prohibiting unauthorized persons NPRM Notice of proposed rulemaking protection of the navigable waterway
and vessels from entering the safety § Section during the scheduled event. The Coast
VerDate Sep<11>2014 15:05 May 16, 2016 Jkt 238001 PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 E:\FR\FM\17MYP1.SGM 17MYP1](https://thefederalregister.org/doc/81_FR_30590/page/9.svg)
Document Created: 2018-02-07 15:06:00
Document Modified: 2018-02-07 15:06:00
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Supplemental notice of proposed rulemaking. | |
| Dates | Comment Due Date: June 16, 2016. | |
| Contact | Aaron Hutchinson, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 6178, Washington, DC 20410; telephone number 202-708-3994 (this is not a toll- free number). Individuals with speech or hearing impairments may access this number through TTY by calling the toll- free Federal Relay Service at 800-877- 8339 (this is not a toll-free number). | |
| FR Citation | 81 FR 30495 | |
| RIN Number | 2502-AJ28 |
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