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HUD Releases New Regulatory Agreement


Third Quarter - 2014

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HUD has issued a new regulatory agreement for for-profit projects other than leased nursing homes. Form HUD-92466M, dated 06/14, will be used by HUD for insurance commitments entered on or after August 10, 2014. The following represents the key revisions to the regulatory agreement since the previous version released in 2011. 

  • Expands and refines definition of surplus cash. Prescribes that all sums due or required to be paid within the following calendar month under the terms of the Note and Security Instrument must be included as a liability in the calculation. This includes mortgage principal, interest, mortgage insurance premium deposits, tax and insurance escrow deposits, and deposits to the replacement reserve and such other reserves as may be required by HUD.
  • Language with respect to a limited dividend borrower has been removed and replaced by a broader definition for Borrower in the Definitions section of the agreement.
  • Section for residual receipts has been deleted from body of the agreement and replaced by a Residual Receipts Rider.
  • Significantly expanded section added for construction/refinancing.
  • New subsections added under Financial Management covering borrower advances and annual financial reports.
  • Expands requirements on what must be included in a management agreement for a HUD project.
     

Contact

For more information, please contact Marc Podnos, Partner, at 301-657-7758 or your CohnReznick professional. Visit our Affordable Housing webpage for further insights. 


This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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