CARH – Overview & Updates of Portfolio Management Issues Stephanie White, Director & Janet Stouder, Deputy Director Multi-Family Housing Portfolio Management.

CARH – Overview & Updates of Portfolio Management Issues

Stephanie White, Director &Janet Stouder, Deputy Director

Multi-Family HousingPortfolio Management Division

USDA National Office - Washington DC

June 15, 2015

Topics

• Management Fees• IPADs• RD Maturing

Mortgages• Rental Assistance• PMD Concerns….• Current PMD

Projects

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Management Fee Structure

• RD and Industry jointly developed a performance-based management fee structure

• Expected to be effective with the 2017 operating budgets.

• Management fee will use the then-current base fee…

• Plus adjustments based on project classification and application of --

• Operating Cost Adjustment Factor and • Applicable add-on fees

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Adjust the current base fee by: -- using the classification -- using add-ons where appropriate

To the current base fee, apply…..

A Property Full OCAFB Property Full OCAFC Property 1/2 OCAFD Property No OCAF

Add-Ons…

A Property $1.50 if sustained 2 years B Property $0 C Property $0 D Property $0

All Properties $1.00 - with layered financing

(new add-on)

Plus the Current Add-Ons…Properties with 15 un or less $2

Non-Contiguous Sites $2 Remote $2

Troubled w/Workout $2 - with new management

CLASSIFICATION WILL BE WEIGHTED

AVERAGE OF PRIOR 8 MONTHS

IT WILL BE POSTED IN

MINC

ALWAYS MONITOR FINDINGS

IPads• Roll-out began in March.

Phase in – completion end of June.

• Used for Supervisory Visits and Physical Inspections

• The electronic upload to the MFH database. Saving administrative time.

• Revised questions.• Photos are included in the

report.• Management Agents will be

receiving the report instead of just a letter.

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RD Maturing Mortgage

UL issued in April, 2015 --

Options to Borrowers to keep properties in the portfolio:

• Re-amortize the remaining loan balance for up to 20 years;• Do the Re-am Lite process! No appraisal; no change in current

year budget or current year rents; speeds the process;• Apply under the MPR program – extra points! - for a debt

deferral;• Still no? Apply through prepayment so tenants will be

protected with RD Vouchers.

2016 President’s Budget includes proposal for tenants in maturing mortgage properties to be eligible for an RD Voucher.

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• FY2015 Budget included limitation on 2nd renewal within 12 months of first renewal

• Budget language expected to affect about 40 properties by FYE

• RD will work with borrowers individually on mitigation measures

• Budget language not retroactive to funding prior to December 11, 2014

Rental Assistance

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• Open Findings – Monitor in MINC Discuss with servicing specialist

• MCR Outcome –Poor Workout PlansSubmit Clear and Concise Budget NarrativesFollow CNAs in Reserve Use

• OIG issues – High cost line items flaggedAdditional investigation into unallowable expensesImproved data integrity in database

PMD Concerns

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PMD ConcernsIPIA results – 1.41%

Errors are generally administrative: • signed and dated documents • calculation errors

Customer Service?2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

Current PMD Projects• RA Obligations – at project level & streamline monitoring and

internal processes

• Vouchers• Integrating Voucher Determination Summary• New Tracking system

• Upload the Capital Needs Assessment into MFIS

• Electronic Files

• Customer Portal

• Provide more servicing training

Multi-Family Housing Programs

Questions and Answers