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HUD Publishes Interim Rule Amending Regulations for Funding for Projection Completion

Wednesday, July 30, 2003 - 1:45AM

The U.S. Department of Housing and Urban Development (HUD) today published an interim rule amending HUD’s regulations with respect to funding for project completion. Current regulations require that funds provided by the mortgagor must be disbursed in full for project work, material, and incidental charges and expenses before any disbursement of the mortgage proceeds with the exception of federal, state or local government or instrumentality grants or loans. The interim rule adds to the exception and provides that the mortgagor’s equity from the sale of low-income housing tax credits (LIHTC) or historic tax credits, or both, need not be fully disbursed before the distribution of mortgage proceeds. HUD will accept comments through September 29, 2003, but the rule goes into effect August 29, 2003. HUD says that good cause exists to publish this interim rule for effect without first soliciting public comment because this change will result in savings in time and money for projects funded with tax credits, thereby making rents more affordable in these projects. Click here for a copy of the rule.

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