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Department of Housing and Urban Development News Briefs - April 2011

Sen. Jack Reed, D-R.I., introduced legislation that would contribute $1 billion to the National Housing Trust Fund for the creation, preservation and rehabilitation of affordable housing. S. 489, the Preserving Homes and Communities Act of 2011, would provide the funds through proceeds from the sale of bank warrants provided to the Treasury in exchange for receiving Troubled Asset Relief Program funds. Sen. Reed says the bill would also protect consumers by increasing the transparency of the foreclosure process. S. 489 is based on similar legislation introduced in 2009 and was referred to the Committee on Banking, Housing and Urban Affairs. Read the full text of the bill at www.hudresourcecenter.com.

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The U.S. Department of Housing and Urban Development (HUD) issued in Notice H 2011-05 new guidance for deferring repayment of operating assistance flexible subsidy loans. Law firm Nixon Peabody LLP reports that the notice affirms that HUD regulations require repayment of all such loans upon mortgage prepayment, expiration, sale or mortgage insurance termination, but the agency will allow repayment deferral in situations in which the owner can demonstrate that recapitalization is necessary and there are inadequate resources in the transaction to pay the flexible subsidy loan in full. To qualify for deferral, the owner must, among meeting other requirements, demonstrate that the property is functioning well, present its case as to how deferring payment will assist the project, and agree to extend affordability for 20 years from the latter of the original mortgage maturity date or repayment of the fully amortized flexible subsidy loan. The notice clarified that while deferred repayment is an option, in no case will HUD forgive flexible subsidy loans. For more details on the transaction terms and the procedure for requesting a deferral, refer to the notice posted on www.hudresourcecenter.com.

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President Barack Obama selected Barbara Fields to serve as HUD's regional administrator for the six states in HUD's New England region, which includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. In her new position, Fields will serve as HUD's liaison to local officials, elected representatives, developers and stakeholders. She most recently served as the executive director of Local Initiatives Support Corporation's (LISC's) Rhode Island office. Under Fields' leadership, a LISC office was established as a single-person operation in 1991; since then, Rhode Island LISC has invested more than $280 million to support nearly $1 billion of development across the state. Prior to her service with LISC, Fields worked for the Massachusetts Government Land Bank and the Boston Redevelopment Agency.

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In an effort to inform housing and community development industry participants and policymakers on new approaches to housing and community development issues, HUD launched Evidence Matters, a quarterly publication intended to update readers on future policy directions that are based on research and data. The first issue focuses on neighborhood revitalization strategies including the HOPE VI program. The publication notes that HOPE VI has been inconsistent in improving residents' problems despite its significant positive impacts on housing conditions and surrounding communities. Read the full inaugural issue at www.huduser.org.

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HUD awarded nearly $50 million to generate approximately 8,000 affordable housing units and more than $1 billion in total development investment. The agency selected three national groups – LISC, Enterprise Community Partners Inc. and Habitat for Humanity – to distribute the capacity-building funds to local initiatives that support affordable housing and community development. The funds were awarded under HUD's Section 4 Capacity Building for Community Development and Affordable Housing Program, which encourages competition among larger not-for-profit groups. In an effort to speed the delivery of critical funds for community revitalization, HUD selected this year's recipients 33 days after the application deadline; in contrast to last year's 124 days. The program requires a minimum three-to-one private/public match; the grants are expected to drive nearly $150 million in investments and more than $1 billion in total development costs channeled to low- and moderate-income families.

Journal Category:

Department of Housing and Urban Development

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