HUD’s Rental Assistance Demonstration (RAD) program is everywhere in the news and the spotlights are on projects D3G WORKED ON! From our very own backyard in RVA (Richmond times Dispatch July 17, 2017 article on Creighton Courts); North to The Big Apple (NYCHA Plans Largest Public-Private Rehab Ever); West to the Golden Gates (Politico: How San Fran saved its Public Housing – By Getting Rid of It); and South down to the Rio Grande (ElPaso Receives LIHTC Allocation). We are proud to be working to preserve housing for those that need it most.
Dr. Ben Carson’s confirmation hearing was almost boring compared to the others!
While many in our industry were questioning Dr. Carson’s housing acumen, it is obvious that he is well advised by housing experts. I was pleased to hear him give praise to LIHTC; acknowledge the importance of the Section 8 platform; and, encourage public-private partnerships (e.g. RAD should benefit).
Also, I was enlightened by his criticism of the Affirmatively Furthering Fair Housing laws which are hindering RAD deals.
This past Friday, the last work day of the year, HUD released the long-awaited CNA e-Tool and Mortgagee Letter 2016-26. The original fall 2014 release of a beta version was followed by much radio-silence, and the fate of the tool was unknown. It appears now that HUD believes the tool ready for prime time – however, the instructions to the platform will not be ready until mid-January! Release a convoluted electronic tool without instructions - why would HUD do that? It is obvious to me the pending administration change precipitated the year-end release. It is my professional opinion that an electronic tool would be welcomed by the industry for consistency of reporting, access to portfolio wide data, and development of capital needs analytics to speed underwriting and processing.
But that only works if the tool has a dynamic user interface (UI). And that is where the tool may fail, because strong stakeholder involvement was not enlisted during development. Anyone that knows anything about software development understands the importance of stakeholder involvement to achieve buy-in. This is why I fear HUD will be using a stick and not a carrot to make all of us use the tool, despite potential limitations and bugs (mandatory use is July 1, 2017). Which is greater reason why strong multifamily industry partners and advocates like D3G must engineer methods to streamline use of the tool. Stay tuned...
RICHMOND, VA., – Dominion Due Diligence Group (D3G), a national leader in environmental and engineering due diligence, today announces an expanded senior leadership team.
“Our industry has experienced significant change in the past few years,” said Rob Hazelton, CEO and president of D3G. “We have been evolving as well, and our new leadership team positions us to manage the complex issues facing our clients, just as we have for more than 20 years.”
The senior leadership team consists of:
Rob Hazelton, CEO and President – Hazelton has served as President and CEO of D3G since founding the firm in 1994. A graduate of Bucknell University, Hazelton boasts more than 20 years of real estate due diligence inspection, account management and technical review of field projects. Rob’s passion for the preservation of our nation’s affordable housing inventory and the programs and institutions that support these housing programs is evident in D3G’s corporate vision and missionary foundation. More on Rob Hazelton.
Tim Ungerleider, COO – Ungerleider has been promoted from senior leader/program manager to COO and will focus on the firm’s growth and operations. A graduate of Rider College with advanced certifications from Rutgers University and Villanova University focusing on program development and Six Sigma process improvement, Ungerleider has been with D3G since 2013. Tim has more than 20 years of corporate management experience including Fortune 500 firms as well as the start-up of two service-based technical companies. His experience in business management includes operations, sales and corporate finance.
Mike Ferguson, VP of Technical Services – Ferguson has been promoted from Director of Engineering Services to VP of Technical Services and will lead D3G’s account management teams. A Licensed Professional Engineer and graduate of Ryerson University with an advanced engineering degree from the University of Toronto and an MBA from Averett University, Ferguson has been with D3G since 2003. Mike has a vast and thorough knowledge of FHA multifamily mortgage insurance programs, and has participated in and reviewed thousands of engineering studies for D3G’s property and capital needs assessment services.
Tim Black, CFO – Black has served as CFO since 2009. He is a graduate of the University of Richmond with an MBA from University of Virginia’s Darden School of Business and holds a CPA certification. Tim has spent the past 20 years working with emerging growth and entrepreneurial companies as an advisor, banker, accountant and owner. His passion and skills enable business owners to use financial information to make better strategic and personal decisions.
Jil Stoddard, HR Director – Stoddard joins D3G after serving as a human resources senior leader for 29 years. Stoddard is a graduate of the University of New Hampshire with an advanced degree from Virginia Tech. Jil’s extensive experience in providing internal employee and leadership development to all corporate organizational levels enables her to design and implement strategic plans that cultivate D3G’s high-performing teams.
Over the past 18 months, the Department of Housing and Urban Development (HUD) has issued a series of changes within the Federal Housing Administration’s (FHA) multifamily mortgage insurance programs, allowing for greater access to capital and favorable underwriting for affordable and energy efficient properties. HUD also is streamlining its operations through its “Transformation for Tomorrow” initiative to reflect these regulatory changes and other industry best practices. D3G has responded to these new opportunities, changing dynamics and challenges by implementing process efficiencies, leveraging technology and strengthening its management team.
About Dominion Due Diligence Group (D3G):
D3G is a multi-disciplinary due diligence provider for the multifamily, senior and affordable housing markets. D3G’s environmental, engineering and energy assessments facilitates the preservation, repositioning and construction of greater than 180,000 units of housing annually. For more information about D3G, please visit www.d3g.com.
(RAD Project, Orcutt Townhomes, pictured above)
Dominion Due Diligence Group (D3G) has been a proponent of the Rental Assistance Demonstration (RAD) program since inception in 2012. During this time, RAD has gotten mixed reviews from different groups in and out of the affordable housing industry, much of which has been pessimistic. Everything from tenant protesting RAD to articles smearing RAD as a negative program out to destroy public housing. But, as the program matures, we have seen most of those views turn positive. RAD is rising above the noise and proving to skeptics that the program is successful.
On September 21, HUD released a RAD Evaluation Interim Report prepared by Econometrica. My read of the report is RAD gets an A+ in the mission and effectiveness of leveraging private capital with public funds - for the benefit of the most-worthy affordable housing in this country. The interim report concludes that for every $1 of public housing funds, RAD is leveraging $9 from sources such as LIHTC, private mortgage debt, accrued land equity, grants and other funding. On average, the closed projects studied for the report are undergoing an average of $60,877 per unit in construction costs. More on the report here.
I was pleased to see that D3G has been involved in approximately 38% of the RAD projects studied for the Econometrica report. Let us put our 3rd party affordable housing due diligence experience to work for you in your next RAD project.
Another example of Dominion Due Diligence Group (D3G) assisting a state finance agency with the FHA risk share program to bring more affordable housing into the market. Kudos to MassHousing, Rockport, and all others involved with this project.
This is what RAD is all about. Beautification and modernization of public housing, with the transformation to the multifamily housing portfolio. It was a pleasure to work with the Salisbury Housing Authority and their Executive Director, Mr. Sam Foust, on this important initiative over the past 3 years. Congratulations to all of those who put in long hours to get this done, all for the benefit of the community and residents.
(Pictured above: Dale Homes)
Congratulations to all of those involved! Dominion Due Diligence Group (D3G) was proud to have worked on New Clay House; Dale Homes; and Sun Valley Landings, contributing a combined $42.1 million to affordable housing in Virginia. Working on 3 of 5 recipients is not too shabby!
I am currently attending the Midwest Lenders' LIHTC Workshop in Chicago. The conference has been very informative so far and I have taken part in many interesting discussions. Lots of good knowledge and best practices being shared... But I'm not sure which is more lively, the conversations or the carpeting!
D3G is honored to have been involved with the Columbia Housing and Redevelopment Corporation and LHP Development, LLC with the preservation of 296 public housing apartments, participating in the HUD Rental Assistance Demonstration (RAD).
This five (5) property portfolio was successfully awarded 9% LIHTC from the Tennessee Housing Development Agency. D3G’s professional services were important with this Section 8 PBRA transformation and included a property condition assessment, energy auditing, environmental assessment, and utility allowance analysis. The development team should be commended for their commitment to energy efficiency with the proposed rehabilitation.
HUD Deputy Assistant Secretary for Multifamily Housing, Priya Jayachandran, and NEF Vice President, Catalina Vielma, provided a wonderful RAD update at NCSHA's Housing Credit Connect 2016.
A few major bullet points to take away from their update:
- 32,000 units of RAD closed to date and another 20,000 with RCC or financing plan submitted; that equates to about 52,000 units of success!
- 81,000 with active chaps with HUD involvement
- $2.2 billion in construction dollars leveraged with closed transactions.
- 53% of closings consist of 4% or 9% LIHTC
- 17% new construction
But HUD wants and needs more on the waiting list! PHAs, hear the call!
I recently got back from the SWAC meeting in Fort Worth, Texas, and the SMAC meeting in Atlanta, Georgia. Both were very informative and great events.
D3G’s staff were invited to present and train on topics of engineering, environmental, and energy as they apply to the 2016 MAP Guide and the MIP Reduction Notice. A few of the things I learned from the conferences:
a. Transformation is hard to do. Fort Worth is two years removed from the process and Atlanta is currently in the midst of transformation – and when asking Lenders and HUD staff how is the process going, the four letter word most heard was not “easy”.
b. Training is needed for HUD, Lenders, and Practitioners alike. It is evident during these times of changing policies and guidebooks that quality training is needed more than ever. The Single-Underwriter Model, a keystone of the transformation, relies upon the premise of a very knowledgeable HUD representative who understands the technical due diligence subject matter, as well as multifamily underwriting.
c. The MIP Reduction Notice for Green Buildings is energizing the FHA markets in two ways. First (and best) is the blitz of conventional product that wants to achieve the reduced MIP. Second (but worst) is the misinformation in the marketplace about how easy it is. It is not that easy, and we all should be reminded of HUD’s best line of the conference when presented with the question: “What if I don’t get an energy score of 75 post-construction?” Answer: Death Star activated. HUD was very clear, a non-compliant property will be forced into compliance, or else.
d. The Georgia Accessibility Law often referenced by the Atlanta HUD office may not be enforceable.
e. Balconies, Noise, and HUD currently don’t make a good mix and compromise needs to be reached to allow for the development of vibrant urban housing and transit oriented developments.
And finally, SMAC knows how to throw an event in celebration of 15 years, and dancing to the sounds of The Brotherland was fun!
For more information regarding the above topics and others, please be on the lookout for our next newsletter, which will be distributed in early June. Until then, keep sending us your inquiries concerning all things HUD.
Congratulations to Wells Fargo and the Housing Authority of the County of San Bernardino!
Wells Fargo closed a new construction loan and provided tax credit equity for Waterman Gardens, where D3G provided inspections, third party due diligence services and reports.
D3G is proud to have been on the team for this very complex RAD and FHA Section 221(d)(4) affordable housing property.
Read the full story here.
It was great to read Pat Costigan's article in AHF, "RAD at 3".
Within the piece, he takes a far look into the Rental Assistance Demonstration (RAD) program. Touching on it's origin, initial skeptics, where we are now, how we can improve, and what the future holds for RAD.
See Pat's full article here.
(Patrick Costigan pictured below)
April 6th, 2016, I attended the RAD Collaborative event in D.C. Great topics, interactive discussion, and even a visit by the original RAD champion, former Secretary of HUD, and current Director of the Office of Management and Budget, Mr. Shaun Donovan. All of this made for a great event!
Be on the lookout for our upcoming newsletter discussing topics covered and other trends happening now in our industry. Join our newsletter list at the top of our homepage.
D3G has been assisting housing authorities all over the country, but it is finally great to help the PHA in our backyard! D3G is honored to have been selected to assist Richmond Redevelopment and Housing Authority (RRHA) with their redevelopment plans. We are excited to help our own “backyard” with the tools for redevelopment, transformation, and planning to benefit the residents of these communities.
Since 2000, the department has allowed over 80 senior facilities to receive grants to accommodate renovations for aging in place residents.
But until now, these properties could not receive FHA mortgage insurance. The Ft. Worth program office has been given the responsibility to allow Section 236, 202, and 202/8 Direct Loan senior properties with ALCP grants to use the Section 223(f) and Section 223(d4) program. This is wonderful news for seniors and the housing industry!
As we near the 3 year anniversary of the Rental Assistance Demonstration (RAD) program, I am pleased to see such articles as this:
The REITs are finally noticing RAD and the potential the program has to preserve much needed affordable housing in this country.
D3G wishes to welcome Tom Davis, formerly with Recap Real Estate Advisors, to HUD’s Office of Multifamily Housing Programs!
I was very pleased to see the announcement this morning that Tom has joined HUD as the new Director of Recapitalization. I have had the pleasure of speaking with Tom on many panels, and his passion for affordable housing and the Rental Assistance Demonstration (RAD) goes unmatched. Adding talent like Tom Davis to HUD is good news for our industry.
The MBANewslink last Friday picked up a great piece discussing the HUD Multifamily PCNA requirement for funding a future 20-year reserve for replacement (R4R) schedule, and its’ deleterious effects on affordable housing. As the author put it “The bottom line is that affordable rental housing is getting squeezed.”
We concur that a 10+2 R4R schedule is more accurate and appropriate.