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HUD Mortgagee Letter Details Change to Frequency of Surplus Cash Distributions for Multifamily Developers

Thursday, September 15, 2022 - 2:45PM

The U.S. Department of Housing and Urban Development (HUD) issued a mortgagee letter Sept. 7 concerning changes in the timing of surplus cash distribution from multifamily developments for nonassisted, HUD-insured properties from twice per year to as frequently as once per month. The changes in Mortgagee Letter 2022-16 only relate to properties with Federal Housing Administration (FHA)-insured mortgages, specifically excluding those receiving tenant rental assistance or HUD-held notes. The letter is only applicable to properties closing under new regulatory agreements. The owner must request that the applicable language (whereby the owner elects monthly surplus cash distributions) be included in the regulatory agreement. The new policy is available only to developments with loans endorsed after the letter’s date and is subject to eligibility conditions detailed in HUD’s letter. The new policy will be incorporated in the next revision of the Form HUD-92466M (Regulatory Agreement).

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