Exhibit B-1 to Subpart C of Part 1930 - Management Plan Requirements for Farmers Home Administration or Its Successor Agency Under Public Law 103-354 Financed Multiple Family Housing (MFH) Projects

The objective of a management plan is to describe the property owner's expectations and standards for performance, timing, and results of management of all aspects of the various components of property operation, maintenance, and compliance with applicable laws and regulations. This exhibit is intended to guide the owner in identifying the various components of property management in an organized manner. The listing of discussion items under each component is intended as further guidance. Items should be added if needed; likewise, those items listed and not applicable to a given property situation need not be addressed.

FmHA or its successor agency under Public Law 103-354 requires management of FmHA or its successor agency under Public Law 103-354 financed MFH projects to be in compliance with applicable Federal, State, and local laws and this regulation. Exhibit B-4 of this subpart will be used by a prospective management agent to provide a resume of management background and/or experience. Exhibit B-5 of this subpart will be used by an owner who proposes to provide direct project management. In rural cooperative housing (RCH), a cooperative's board of directors will manage the business of the cooperative with the assistance of the adviser to the board. If the board is unable, in the adviser's opinion, to manage the cooperative after an adequate period of training, then FmHA or its successor agency under Public Law 103-354 will make the determination of whether the cooperative will hire professional management.

FmHA or its successor agency under Public Law 103-354 will review the management plan to evaluate the borrower's standards for project management. The management plan and any subsequent revisions must be signed by the borrower, and then approved and signed by the authorized FmHA or its successor agency under Public Law 103-354 official. No loan will be closed or construction started, or loan transfer completed, without a properly approved and signed management plan. Management plans should be reviewed annually and updated at least triannually by the borrower. Any updated or modified management plan will need to be reviewed and approved by the Servicing Official at the time of annual review. When only a few changes are needed, use of an addendum to the plan is acceptable to FmHA or its successor agency under Public Law 103-354.

A management plan will reflect understanding of FmHA or its successor agency under Public Law 103-354 program requirements for the project and address each of the following areas:

1The role and responsibility of the owner and the relationship and delegations of authority to the management agent. A management agreement must be provided where a management agent is to be used. If there is no management agent, the management plan should supply the equivalent information concerning the management staff assigned to day-to-day operation of the project even when the owner provides direct management.

aDescribe and fully justify any identity of interest as described in paragraph V B of exhibit B of this subpart.

bIdentify the supervisory relationships, and to whom the incumbent of the position responsible for the day-to-day operation of the project is accountable.

cDescribe the conditions when the management agent must consult the owner before taking any action.

dIdentify the person or position in the owner's organization that is the key contact for the management agency. Describe the type of decisions to be made by this contact person.

eDescribe the fundamental responsibilities and duties of the owner and the managing agent. Identify any areas of overlap and describe how the overlap will be handled.

fDescribe any pro rata divisions of singularly incurred operating expense that is common to the management agent and the owner (project) (i.e., fidelity coverage that may be divided between both).

2Personnel policy and staffing arrangements.

aDescribe hiring practices of management and their conformance with equal employment opportunity requirements.

bInclude a staffing plan for the project.

cDescribe the lines of authority, responsibility, and accountability (internal controls) within the management entity.

dDescribe the standards and plans for training and familiarizing employees with their job related responsibilities and applicable FmHA or its successor agency under Public Law 103-354 program requirements. Describe how such training will generally be achieved.

3Plans and procedures for marketing units, achieving and maintaining full occupancy, and meeting HUD Form 935.2, “Affirmative Fair Housing Marketing Plan,” requirements.

aDescribe how affirmative marketing practices will be used. Describe the outreach and marketing efforts that will be used to reach those low-income and minority persons who are least likely to apply for such housing without special outreach efforts.

bDescribe the methods that will be used to achieve and maintain the highest possible level of occupancy. When applicable, indicate any additional compensation or incentives that may be allowed management agents for early initial rent-up. (If this area is not covered in the management plan, it will usually not be allowed by FmHA or its successor agency under Public Law 103-354 at a later date.)

cDescribe how the units will be advertised. Indicate minimum levels planned regardless of occupancy levels.

dDescribe the appropriate communication system, auxiliary aids, or other assistance that will be used to ensure effective communication with applicants, tenants or members, and members of the public that have sight or hearing impairments.

eDescribe the kinds of reasonable accommodation the project can readily provide such as changing water faucets, kitchen equipment, door knobs, assigning handicap parking spaces, etc.

fDescribe the process management will follow in reviewing and determining whether structural modification of an apartment unit is practical and feasible to reasonably accommodate a tenant or household member who has a handicap or disability.

gIndicate whether the FmHA or its successor agency under Public Law 103-354 sample waiting list (exhibit B-14 of this subpart) or some other waiting list will be used. If another waiting list is used, indicate how its use will otherwise comply with FmHA or its successor agency under Public Law 103-354 guidelines.

hAttach copies of sample forms that will be used to record unit condition, and indicate who will receive copies of the inspection forms.

iDescribe any orientation services to be provided tenants or members to acquaint them with the project and care of the units. Indicate what printed project information will be given to applicants.

jIdentify the person or staff position responsible for determining tenant or member eligibility and their location on the waiting list.

kIn projects receiving tax credits, describe how special waiting lists will be established and when eligible tenants with incomes higher than tax credit limits will be considered for occupancy.

4Procedures for determining eligibility and for certifying and recertifying incomes.

aDescribe how applications and other records relevant to this function will be kept. If application fees are used, describe them.

bDescribe the level of knowledge, skill, and ability that management official(s) will be expected to possess before assuming rental related duties such as application processing, eligibility determination, selection, unit assignment, certification, recertification, rent or occupancy charge collection, and recordkeeping. This discussion should mention training and testing to be provided or obtained to achieve and maintain the level expected.

cIdentify whether project funds or the management agent will pay overage when overage is due through no fault of the tenant or member.

5Leasing and occupancy policies.

aDescribe the occupancy standards for the project. (This could be shown as an annex to the management plan.)

bDescribe the project admissions and leasing/occupancy policies and procedures, and criteria for selecting tenants/members for occupancy. (This could be shown as an annex to the management plan.)

cDescribe the level of knowledge, skill, and ability that management official(s) will be expected to understand and apply regarding project lease provisions and prohibitions, occupancy standards, and admissions policies.

dDescribe special procedures that will be used where the marketing area includes non-English speaking or reading persons to assure that such persons will understand leases or occupancy agreements and established rules.

6Rent and occupancy charge collection policies and procedures.

aDescribe the project rent/occupancy charge collection policy and procedure, covering such matters as where the collection point is, which staff position handles the collection, provisions for collection after normal office hours, recording, and safeguarding of collections.

bDescribe the project security deposit/membership fee policy and procedure covering matters similar to the preceding item. Include discussion on handling of any interest earned on such deposits.

7Procedures for requesting and implementing a rent or occupancy charge change.

aDescribe the process to be followed for preparation and request of a change of rents/occupancy charges and/or utility allowances, and to notify tenants of such change, to meet FmHA or its successor agency under Public Law 103-354 requirements.

bIdentify which staff position or person will process change requests.

cDescribe when such change requests will normally be made in terms of economic need and timing within a fiscal year of operation.

8Plans and procedures for carrying out an effective maintenance, repair, and replacement program.

aDescribe the project objective and general plan for preventive maintenance.

bDescribe where the project's as-built plans and specifications will be located and identify the staff position responsible for updating it as modifications occur.

cDescribe the general maintenance procedures and schedules or cycles to: (this list could be attached as an addendum)

(1) Check and service appliances and mechanical equipment.

(2) Perform safety checks of smoke/fire alarms, fire extinguishers, outside lighting, and ice removal, etc.

(3) Inspect and perform maintenance and redecoration incident to tenant/member move-out and move-in.

(4) Perform major interior and exterior painting and redecorating.

(5) Perform major repairs and grounds maintenance.

(6) Remove garbage and trash.

(7) Perform common areas cleanup (parking lot, entryways, hallways, community room, etc.)

dDescribe the project policy and procedure for tenants/members to prepare and submit maintenance requests.

eDescribe the general timing for handling purchase orders and payments.

fDescribe the project policy for budgeting for and/or requesting use of reserve funds for funding major maintenance or replacement items.

gIn migrant or seasonally occupied labor housing (LH), describe the above items in terms of season opening and closing dates.

9Plans and procedures for providing supplemental services.

aDescribe the types of supplemental services such as laundry and vending machines that will be provided to benefit occupants.

bExplain whether this equipment will be owned and operated by the owner or a consignee (vendor).

cDescribe the safekeeping and recording practices (internal control) of any cash collections from use of the equipment.

dDescribe who will be responsible for maintaining the equipment and stocking any vending machines.

eWhen a consignee will operate the equipment, describe the general terms of the consignment contract.

10Plans for accounting, recordkeeping, and meeting FmHA or its successor agency under Public Law 103-354 reporting requirements.

aBriefly describe the type of project accounting methods (i.e., cash or accrual) and records that will be used, how will they be maintained, and which staff position will prepare and maintain them.

bDescribe how interest earned on project reserve funds will be prorated and accounted “separately” if such funds are deposited jointly with funds of another project owned by the same borrower.

cDescribe whether the project bookkeeping chart of accounts and bank accounts is compatible with Form FmHA or its successor agency under Public Law 103-354 1930-7, “Multiple Family Housing Project Budget,” requirements, and if not, what adjustments will be made when reporting actuals on the form.

dIdentify which staff member or position will be responsible for the preparation and submission of the quarterly and annual reports required by FmHA or its successor agency under Public Law 103-354.

eProvide assurance or explanation that the person or firm who will perform and prepare the annual audit, or verification of review, is not associated with the project, other than to perform the audit or review.

fDiscuss the proposed tenant or member record maintenance system including retention of records and identify which person/position will handle and maintain the records.

gIdentify where records subject to FmHA or its successor agency under Public Law 103-354 review will be kept and which person/position FmHA or its successor agency under Public Law 103-354 will contract to review the records.

11 Energy conservation measures and practices.

aDescribe the plan to inform and encourage tenants/members in use of energy conservation practices they can use in their unit to save utility expense (and thus minimize utility allowances and conserve rental assistance).

bDescribe the plan to utilize energy conservation practices in the common areas of the project (to conserve operating expense and help minimize rent/occupancy charge levels).

cDescribe the project objective in implementing energy conservation measures, if any, as they are identified in an energy audit.

12Plans for tenant participation in rural rental housing (RRH) project operations and tenant's relationship with management.

aDecribe any plans for a tenant organization and how management and staff will work with the organization.

bDescribe where the Tenant Grievance and Appeals Procedure (subpart L of part 1944 of this chapter) will be posted in the project and otherwise made available to tenants. Identify which person or staff position will be responsible for responses to and consideration of a tenant/member grievance.

13Plans for member participation in RCH project operations.

aDecribe who will explain to the members the types of committees the cooperative will be using.

bDescribe what the cooperative will do to attract member participation on committees.

cDescribe how the board members will participate with the committee.

dDescribe where the cooperative will post, and otherwise make available to members, the Tenant Grievance and Appeals Procedure (subpart L of part 1944 of this chapter). Identify which person or staff position will be responsible for response to and consideration of a member grievance.

14Plan for carrying out management training programs.

aDescribe the standards of training and proficiency that management or board members will be expected to attain and maintain to perform their duties and responsibilities in carrying out project objectives, including compliance with applicable Federal, State, and local laws.

bDescribe the plan to conduct internal training and to otherwise use external training sources to maintain levels of attained proficiency.

cFor RCH, describe the actions the board will take if a board member(s) does not participate in training.

dFor RCH, describe the role the board will assume in making sure the RCH membership as a whole understands its role and functions in the cooperative.

15Termination of leases or occupancy agreements and eviction.

aIdentify which person or staff position is responsible for knowing and administering State and local laws and FmHA or its successor agency under Public Law 103-354's requirements regarding termination of leases or occupancy agreement and evictions.

bIdentify which person or staff position is responsible for knowing and administering State and local laws and FmHA or its successor agency under Public Law 103-354's requirements regarding the notification that must be given to a tenant or member when termination of lease or occupancy agreement is proposed and subsequent eviction procedures through the State or local judicial process.

16Security servicing.

aIdentify which person or staff position is responsible for knowing and complying with FmHA or its successor agency under Public Law 103-354 requirements for fidelity coverage and acquiring such coverage.

bIdentify which person or staff position is responsible for knowing and complying with FmHA or its successor agency under Public Law 103-354's insurance coverage requirements and acquiring such coverage.

17Management agreement. Attach a copy of the management agreement, when applicable. (If an initial loan, attach a copy of the proposed management agreement, when applicable.) See exhibit B-2 of this subpart for requirements for management agreements.

18RCH board of director/adviser relationship. Discuss the relationship of the adviser and its effect on decisions made by the board.

19Management compensation.

aIf management is provided directly by the owner, describe the amount of management fee, how it will be determined, and how it will be paid.

bIn the case of a cooperative, describe the amount of compensation to be paid to the adviser by the board.

20On-site management.

aDescribe who (owner, site manager, caretaker, board) will perform on-site management duties and responsibilities.

bDescribe the duties and responsibilities of the on-site management staff.

cIdentify whether the site manager will live in the project in a rent-free unit or pay rent, or live off-site.

dDescribe established office hours and indicate where they will be posted.

21Validity of the management plan. The plan must provide space at the end for the following:

aDate, title, and signature of borrower or borrower's authorized representative.

bDate, title, and signature of the FmHA or its successor agency under Public Law 103-354 official approving the plan.