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Rob grew up in Southern Vermont and attended Bucknell University in Lewisburg, Pennsylvania. Rob founded D3G in 1994, and his passions include time with family, golf, being outdoors and reading. Personal motto: “Work is a dirty 4-letter word, so it is my job to make it more enjoyable.”

NLHA Annual Conference in DC

I'm attending the NLHA Annual Conference in Washington, DC. Ben Metcalf just showed a PowerPoint slide demonstrating the effective timely processing of loans using the single underwriter model in the Atlanta HUB. Of the four examples, D3G performed third party services on three of the success stories!

 

Kudos to CHP for the NAHMA Award

D3G would like to give a shout out to CHP for The Warwick recognition (NAHMA award here). D3G did a lot of consulting work on this, including: Capital Needs Assessment, Environmental Site Assessment, Hazardous Materials Testing (Asbestos, Lead, Mold), Indoor Air Quality analyses, Phase 2 Environmental Sampling, Technical Abatement Specifications and Scope of Work Development, as well as Construction Inspections during rehabilitation.

This work started in the fall of 2008 and concluded in 2012. Determination and patience with this converted 1928 luxury hotel has resulted in 88 single room-occupancy (SRO) housing, supporting previously homeless individuals. Kudos to CHP!

IPM No Longer Required for RAD!

Excellent News! Apparently our constant request for IPM Waivers as well as pointed conversations about IPM, and where/when it is most appropriate, has been heard and a policy change made. Today HUD officially removed IPM from the RAD Scope of Work, and a new scope of work was issued with only three (3) parts for compliance entitled RPCA SOWv2. For those with RAD RPCA’s in progress, pick up the phone and tell your consultants this wonderful news, and save some fees!

Sec. Donovan Speaks at AHF Live

Tags:RAD

I was pleased by what Jennifer Berger and I heard about RAD from our Housing Secretary at the AHF Live conference we attended in Chicago. According to Secretary Donovan, the agency has received applications for more than 90,000 units to convert public housing under RAD and expects to hit the program’s 60,000-unit limit in the early months of 2014.

“That is why we need to increase the cap to 150,000 in our 2014 budget,” Donovan said at AHF Live in Chicago. Read all about it here. With approximately 40% of the early RAD conversions utilizing the LIHTC markets, we would love to see the RAD program authority increased with the upcoming budget / continuing resolution. Fingers crossed until January 16th...

HUD's Contingency Plan for Government Shutdown

Tags:HUD

I was hoping I would not need to send this out.  But just in case the government shutdown doesn't end today, and you work with HUD, you can read the contingency plan here.

D3G Is Founding Member of NEEDA

The National Engineering and Environmental Due Diligence Association (NEEDDA) publicly announced its formation today with seven founding members. These founders, some of the nation’s largest due diligence consulting firms, include Partner Engineering and Science, Inc., EMG, Nova Consulting, IVI International, Inc., AEI Consultants, Dominion Due Diligence Group, and PM Environmental.

Clients of the member firms include national lenders, investors, brokers, attorneys, and other real estate transaction parties.

The founders met throughout 2013 to create bylaws for the non-profit organization whose mission is to “promote the common interests of engineering and environmental consulting stakeholders who provide due diligence for real estate transactions.” Members must provide both engineering and environmental due diligence services and meet the membership criteria.

Read the full press release here.

RAD On The Road

Tags:RAD

D3G has teamed up with The Bennett Group (TBG) for a few lunch-n- learn meetings about the RAD process. I will be in Independence, MO on September 25th, Alexandria, LA on October 9th and Memphis, TN on October 10th. TBG is facilitating these meetings, so for more information or to request more information about future educational seminars regarding RAD, check out TBG's website here.

Ohio Clarifies Radon Policy

Though not “news” to D3G, HUD ML2013-07, Multifamily Housing Radon Policy received some much needed clarification today from the Ohio Multifamily Hub by sending a link to this document issued by the Ohio Department of Health. Similar clarification should be provided by Illinois, which like Ohio, has radon testing requirements more onerous than the recently issued HUD standard. Also, New Jersey has similar regulations in the process of being enacted. In a nutshell, 3rd party consultants need to know the State regulations and are required to comply above and beyond the new HUD Radon Policy, as applicable. When in doubt use D3G, as we make sure our staff are up to date on Federal and State regulations that govern affordable housing due diligence. After all, we are here to reduce your risk – not create greater risk by skirting the regulations.

FAQ's Address Intrusive Studies

This week HUD posted FAQ’s to the PCNA ML 2012-25. Question #1 on “Intrusive Examinations” should help many MAP Lenders in evaluating professional 3rd party services for their next deal. After reading the FAQ, D3G can unequivocally state that “D3G IS DOING IT RIGHT”! Specifically, the FAQ states “In all cases, we want intrusive examinations conducted by experts under written obligation to the needs assessor, compensated by the needs assessor and responsible to the needs assessor.“ That is how we do it, with licensed and accredited building science experts, equipped with advanced tools, probes, and measuring devices. Don’t be fooled by other 3rd Parties who want to make mountains out of molehills, because compliance with the PCNA ML 2012-25 is made simple by the right experts.

Read all the FAQ's here.  

Have I mentioned that I am excited about RAD?

Have I mentioned that I am excited about RAD? - D3G

© 2014 Dominion Due Diligence Group

PCNA Mortgagee Letter is Issued!

A belated Happy Thanksgiving to all. Don’t know how many of you noticed that HUD issued the long-awaited PCNA Mortgagee Letter late Wednesday, right before football games and turkey time. Mortgagee Letter 2012-25, effective 120 days from November 21, 2012. Ouch. Now, I will dive into all 32-pages and try to get you all a summary of the changes. Stay tuned.

RAD Initial Application Period Ends This Week

The Rental Assistance Demonstration (RAD) Initial Application Period ends this week on October 24th. Applicants can earn 10 additional points by agreeing to achieve one of the twelve (12) Green Building and Energy Efficiency designations identified in the RAD Notice. Note, that the Green Building designation is above and beyond the mandatory energy and water saving component of the RAD requirements. Are you curious which designation is most applicable to you? D3G has over 15 accredited green building professionals on-staff, available to answer your questions on which HUD-endorsed Green Building designation may be best suited for your property or transaction. Also, our staff has years of prior experience with HUD M2M OAHP Physical Condition Assessment (PCA) Tool.

RAD Housing Notice 2012-20 Issued

On Friday, October 12th a RADblast was issued by HUD which consisted of Housing Notice 2012-20 - Underwriting Instructions for Projects Converting Assistance under the Rental Assistance Demonstration. Why is this important? For starters, it defined the Scope of Work for both property assessment and loan underwriting of a RAD transaction. In addition, the Housing Notice clarified that the RAD Physical Condition Assessment (RPCA) will be HUD Multifamily Accelerated Process (MAP) compliant if the three (3) components are completed. These include the Excel-based PCA Tool, the Statement of Work, and the Exhibits to the Statement of Work. This is important because a singular scope of work will ensure compliance with mortgage insurance under the HUD Section 221(d)(4) and 223(f) programs! As HUD put it in the transmittal “this is really good news!” Some key highlights of Housing Notice 2012-20 which I gleamed during my read of the document and exhibits are:

1. Expedited (streamlined) processing is discussed, including the use of HUD-employed “Designated Underwriters” who are instructed to not delegate portions of the application review to HUD technical staff, except in rare cases. I find that the Housing Notice description of the streamlined process places greater emphasis on the quality of the 3rd party reports, in order to facilitate a singular point-of-contact review and approval.

2. Recognition of LIHTC Pilot for Section 223(f) applications; as well as, MAP Guide Section 5.28, allowing for deferred submission of plans and specifications.

3. Davis Bacon Wage Rate applicability follows the existing rules in the MAP Mortgage Insurance process.

4. The RAD Physical Condition Assessment (RPCA) required by RAD can be submitted in lieu of the MAP Guide PCNA.

5. The Green components of the RPCA is to be supported by a USGBC LEED-AP and BPI-Building Analyst review; an Energy Audit; and, Integrated Pest Management (IPM) glue trap inspection of ALL units (100%).

6. The RPCA scope has integrated many components of HUD’s Pending PCNA Mortgagee Letter, including forensic studies, more rigorous handicap accessibility reviews, and 20-year reserve for replacement analysis.

7. The Environmental Review for RAD transactions must comply with the MAP Guide Chapter 9 requirements to include HUD Form 4128, as well as, identification of hazardous materials (asbestos and lead-based paint).

8. HUD’s goal is to issue a Firm Commitment within 60 calendar days of submission of a complete application.

In summary, the RAD Physical Condition Assessment (RPCA) is a HUD Multifamily Accelerated Process (MAP) Guide Property Capital Needs Assessment (PCNA) on steroids! The good news for our clients and the affordable housing markets is that Dominion Due Diligence Group (D3G) has all of the required technical expertise, experience and licenses IN-HOUSE, without the need for sub-contractor delays and inferior workmanship. If you need an RPCA for a HUD Mortgage Insurance application, we have you covered.

RAD Q&A

On Monday, HUD published “Frequently Asked Questions” to the RAD Resource Desk. (link: http://portal.hud.gov/hudportal/documents/huddoc?id=RADFAQ_Sep24.pdf). It is a good read, but I found the “Benefits of RAD” question and answers on page 4 wonderful!

The question was “If there is no new Federal funding available with RAD, what are the financial benefits of participating in the program?” to which the RAD Resource Desk provided eleven (11!) great reasons to pursue the program, including (verbatim):

(1) Ability to leverage private debt and equity to meet rehabilitation needs. RAD creates an opportunity to convert existing rent subsidy and capital funds to a Section 8 Housing Assistance Payments (HAP) contract. PHAs can borrow against the HAP income stream and/or leverage 4% or 9% LIHTC equity investments against it.

(2) Historically low rates on permanent financing. In the case of FHA financing, for example, current rates are at about 3%, with .45% added for mortgage insurance premium (MIP). These extremely low rates increase project borrowing potential dramatically.

(3) More secure funding stream. While also subject to annual appropriations, project-based Section 8 contracts have not been subject to the same “proration” issues of the public housing Operating Fund Program or the large swings in the Capital Fund Program.

(4) Fee potential. Similar to other affordable housing developers and managers, under RAD, PHAs can earn development, property management, asset management and/or guarantee fees depending upon the financial structure of a transaction.

(5) Additional income potential. Depending upon the financial structure, PHAs may also be able to generate additional income or receipts from RAD transactions via project cash flow, debt-service on PHA-supplied financing and seller take-back notes, ground-lease payments, etc.

(6) Long-term preservation. Unlike traditional public housing, the contract rents will support an annual contribution for replacement reserves so that the project has funds to address the timely replacement of systems of components.

(7) Operational stability. Contract rents will be adjusted annually by an operating cost adjustment factor, which should facilitate long-term project planning. Further, all of the following potential sources of PHA income in a RAD transaction constitute unrestricted, non-Federal funds

(8) Developer fees (10% in debt-only deals; up to 15% in LIHTC)

(9) Land-lease payments

(10)Sellertake-back financing on appraised value of existing units in a rehabilitation transaction (this is not available in the case of demolition and new construction)

(11) Cash flow

So, if you or a client needs help with the Green Capital Needs Assessment (GCNA) to submit to your lender and HUD, please consider D3G. We know housing, we know HUD.”

Let the RAD Competition Begin!

The initial application period for the competitive First Component of RAD begins Monday, September 24th! As a primer, HUD held webcasts last Friday which have been posted to YouTube. For our MAP Lender clients, note that at the 5:35 minute mark of the “RAD First Component” video, HUD discusses the FHA mortgage insurance programs. Most encouraging is the indication that the Department will soon be issuing a Multifamily Mortgagee Letter, specifically about how the Section 223(f) and 221(d4) programs can work for RAD and expedited processing and approval of RAD applications. We look forward to this pending Mortgagee Letter to assist with future RAD applications and trying to intertwine the processes of MAP, OAHP and Public Housing together in the name of preservation.

LIHTC and Year 15 - What Now?

The newly released HUD study about forecasting potential problems for the LIHTC/Affordable Housing stock is a good read for those wishing to gain some more insight into the history of the LIHTC markets, the dilemmas presented by Year 15, and where we should go from here. Pages 1 through 89 provide a good refresher for the seasoned professional, but is also an introduction for novices wishing to know more about affordable housing. But beware, it does make some sleepy bedtime reading (which in my case was good medicine!)

HUD Updates RAD Site & Hosts Live Webcast

HUD recently sent out an email blast touting two updates to the resources listed on the site.  The newly released resources include: the RAD Conversion Guide for Public Housing Agencies (Guide) and an accompanying RAD Inventory Assessment Tool (Tool).

Today (Thursday, August 23rd) at 2 pm, you can join the live RAD Forum webcast via the same site...but if you miss it, don't worry, I can fill you in on what you missed.

 
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