[Federal Register Volume 59, Number 201 (Wednesday, October 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25072]
[[Page Unknown]]
[Federal Register: October 19, 1994]
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RESOLUTION TRUST CORPORATION
12 CFR Part 1609
RIN 3205-AA03
Affordable Housing Disposition Program
AGENCY: Resolution Trust Corporation.
ACTION: Interim final rule; request for comments.
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SUMMARY: The Resolution Trust Corporation (RTC) is amending the
existing regulations governing its Affordable Housing Disposition
Program (AHDP). The amendments set forth in this interim final rule are
necessary because the Resolution Trust Corporation Refinancing,
Restructuring and Improvement Act of 1991 (Refinancing Act), the
Departments of Veterans Affairs, Housing and Urban Development and
Independent Agencies Appropriations Act of 1992 (1992 Appropriations
Act), the Housing and Community Development Act of 1992 (1992 Housing
Act) and the Resolution Trust Corporation Completion Act of 1993
(Completion Act) changed the manner in which the RTC is to identify,
market and sell certain affordable housing properties. This interim
final rule also clarifies certain policies of the RTC regarding the
disposition of assets in the AHDP and reflects certain comments
received with respect to a previously published interim final rule. By
implementing the statutory changes required by the Refinancing Act, the
1992 Appropriations Act, the 1992 Housing Act and the Completion Act,
and clarifying certain provisions of the AHDP and making the other
changes set forth herein, these regulations will enhance the
availability and affordability of residential real property for very-
low income, lower-income and moderate-income families and individuals.
DATES: This interim final rule is effective October 19, 1994. Comments
must be received by November 18, 1994.
ADDRESSES: Written comments regarding this interim final rule should be
addressed to John M. Buckley, Jr., Secretary, Resolution Trust
Corporation, 801 17th Street, NW., Washington, DC 20434-0001. Comments
may be hand delivered to room 314 on business days between 9 a.m. and 5
p.m. Comments may also be inspected in the Public Reading Room, 801
17th Street, NW., between 9 a.m. and 5 p.m. on business days. Phone
number: 202-416-6940; FAX 202-659-1460.
FOR FURTHER INFORMATION CONTACT:
Stephen S. Allen, Director, Affordable Housing Disposition Program,
(202) 416-7348, or Barry Wides, Deputy Director, Affordable Housing
Disposition Program, (202) 416-7138. (These are not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Regulatory Procedure
On August 31, 1990 (55 FR 35564), the RTC published a final rule
establishing the procedures to be followed by the RTC in connection
with the sale of eligible residential properties to qualifying
purchasers under the AHDP. Those procedures were established in
accordance with the affordable housing provisions of section 21A(c) of
the Federal Home Loan Bank Act, as amended by section 501 of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(FIRREA) (12 U.S.C. 1441a).
On May 6, 1992 (57 FR 19500), the RTC published an interim final
rule and request for comments (May 6, 1992 Interim Rule). That
publication implemented some of the statutory changes made to the AHDP
by the Refinancing Act and clarified the RTC's policies on a number of
issues relating to the disposition of assets in the AHDP.
On June 12, 1992 (57 FR 24937), the RTC published an interim
statement of policy. That publication provided that when more than one
multifamily property is purchased from the RTC under the AHDP, the RTC
will require that not less than 15 percent of the dwelling units in
each separate property purchased be made available to low or very-low
income individuals. The final statement of policy was published on
August 19, 1992 (57 FR 37581) and reflected no significant changes from
the interim statement of policy.
This interim final rule differs from the May 6, 1992 Interim Rule
in several ways:
(1) It implements several statutory changes made to the AHDP by the
Refinancing Act and not reflected in the May 6 1992 interim final rule;
(2) It implements a number of statutory changes made to the AHDP by
the enactment of the 1992 Appropriations Act, the 1992 Housing Act and
the Completion Act;
(3) It further clarifies RTC policies relating to the disposition
of assets within the AHDP.
Comments
The RTC received written comments on the May 6, 1992 Interim Rule
only from Public Citizen, Inc. Many of the recommendations have been
incorporated in this interim final rule. Descriptions of specific
comments, and several changes made in response thereto, are included in
the following discussion.
Discussion of Changes
The following are the principal changes being made to the
regulations:
(1) The definitions of eligible condominium property, eligible
multifamily property and eligible single family property are modified
to substitute specific value limits for the former references to
various sections of the National Housing Act of 1934, as amended
(National Housing Act). In order to implement section 12 of the
Completion Act, the definitions of eligible condominium property and
eligible single family property are modified to permit specific maximum
values higher than those set by the National Housing Act so long as
Congress has appropriated funds for such purpose. To implement section
601 of the Refinancing Act, the definition of eligible multifamily
property is modified to permit the inclusion of conservatorship
properties, if Congress appropriates funds for that purposes. Public
Citizen, Inc. requested that the definition of eligible multifamily
property be extended generally to include otherwise eligible
conservatorship properties. In view of section 12 of the Completion
Act, this interim final rule goes as far in that direction as the RTC
believes is permissible without a Congressional appropriation.
(2) Section 14(a) of the Completion Act is implemented in this
interim final rule by a requirement that the RTC send notices to
clearinghouses of the availability for sale of certain properties which
are ``ineligible'' under the AHDP program. ``Ineligible properties''
include (a) properties that would otherwise be eligible condominium
property or eligible single family property, but have values above the
applicable AHDP limits and within certain higher limits set forth in
the statute (if Congress has not appropriated funds to include such
properties as eligible), and (b) properties that would be eligible
multifamily property but for being owned by the RTC in its capacity as
conservator (if Congress has not appropriated funds to include such
properties as eligible). The clearinghouse is required to make such
notice available to qualifying purchasers, as well as other purchasers,
as appropriate and technical assistance advisors are permitted to
perform a similar function.
(3) Consistent with the interim and final statements of policy
discussed above, the definition of lower-income occupancy
requirement(s) applicable to eligible multifamily properties sold in a
bulk sale is revised to require that at least 15 percent of the units
in each property must be made available for low- or very low-income
families.
(4) The marketing period continues to be 97 days for eligible
single family property, but the definition permits a longer marketing
period to the extent Congress appropriates funds for such purpose.
(5) Section 14(d) of the Completion Act is being implemented to
increase participation by minority-owned and women-owned businesses in
the AHDP. The interim final rule requires that brokers and RTC staff
provide, to a wide range of minority-owned and women-owned businesses
and minority-controlled nonprofit organizations, each engaged in
providing affordable housing, information concerning the availability
of purchase money loans under section 21A(c)(6)(A)(ii) of the Federal
Home Loan Bank Act (12 U.S.C. 1441a(c)(6)(A)(ii)). Clearinghouses and
technical assistance advisors are also authorized to provide such
information to such parties. In addition to the explicit requirements,
the interim final rule includes various definitions concerning this
aspect of the AHDP.
(6) The definition of nonprofit organization is modified to limit
the opportunity for for-profit individuals or entities to benefit from
such status.
(7) The definition of public agency is clarified to include
entities operating under executive, legislative or judicial authority.
(8) Consistent with current RTC directive, the interim final rule
requires that the RTC send clearinghouses notices containing
information concerning properties with appraised values or values
determined by the RTC which exceed the applicable AHDP values. These
properties (including the ``ineligible'' single family and condominium
properties discussed in paragraph (2) above) will not be marketed or
sold as a part of the AHDP, and may be sold to any purchaser if the
sales price exceeds the applicable maximum AHDP value. However, if the
sales price falls below the applicable maximum value, these ``non-AHDP
properties'' may only be sold, initially, to a qualifying purchaser.
This change is consistent with a suggestion made by Public Citizen,
Inc.
(9) The RTC's authority to issue a second Notice of Marketing
Period for unsold properties has been expanded to cover single family
properties and condominium units.
(10) The provisions concerning eligible multifamily properties are
being clarified to reflect that if a purchaser makes a commitment to
reserve a higher proportion of properties for very low income families,
that commitment must be reflected in the LURA for such property.
(11) The provisions concerning rent restrictions applicable to AHDP
properties are being clarified to reflect that family size adjustments
for purposes of determining rent will be based on unit size, rather
than household size.
(12) The provisions describing the property listing which must
accompany a Notice of Marketing Period are being revised to conform
more closely to statutory requirements.
(13) In order to implement section 609 of the Refinancing Act, the
RTC will be required to establish a net realizable market value for an
eligible multifamily property, which value will be a minimum sales
price in all cases, except for expedited sales to public agencies or
nonprofit organizations.
(14) Clarification and an addition examples are provided as to the
preference given, with respect to the bulk sale of eligible condominium
properties, to sales that will benefit the larger number of very low-
and low-income households.
(15) The provisions concerning bulk sales of eligible condomium
property and eligible multifamily property are modified to permit the
RTC, when a bulk package is being marketed, to sell individual
properties to qualifying purchasers. Public Citizen, Inc. had suggested
such a revision with respect to eligible multifamily property. This
interim final rule goes a step further by making a similar revision
with respect to eligible condominium property.
(16) The provision which specifies the information to be provided
in reports to Congress concerning the AHDP, has been revised so that it
more closely tracks the statute.
(17) The provision of Sec. 1609.11 which addresses public agencies
that acquire properties under the AHDP has been expanded to specify the
particular lower-income requirements that apply.
(18) Consistent with existing RTC policy, a new subsection
1609.9(b) has been added which provides that, with respect to eligible
multifamily property, the RTC will offer such property, initially, for
direct sale exclusively to public agencies and nonprofit organizations
for a period of 45 days. If the RTC receives no notice of serious
interest, the property will be marketed pursuant to section 1609.7.
Other stylistic changes to the regulations have also been made.
Because of the length of the interim final rule and the number of
changes from the May 6, 1992 Interim Rule, this interim final rule is
published in its entirety.
Administrative Procedure Act
The RTC is adopting this regulation as an interim final regulation.
It will be effective immediately upon publication in the Federal
Register, without the usual notice-and-comment period or delayed
effective date as provided for in the Administrative Procedure Act, 5
U.S.C. 553. These requirements may be waived for ``good cause''. The
RTC believes that good cause exists because the amendments made to the
affordable housing provisions of FIRREA by the Refinancing Act, the
1992 Appropriations Act, the 1992 Housing Act and the Completion Act
took effect immediately upon their enactment. Moreover, immediate
clarification of existing policies is necessary in order to avoid undue
delays in the disposition of affordable housing properties.
By implementing these changes immediately, the RTC is complying
with the mandate from Congress to dispose of single family, multifamily
and condominium properties expeditiously and to the benefit of low and
moderate income households. The immediate effective date of the
regulation is also desirable in order to avoid public confusion
regarding the RTC's policies and procedures in this area. Such
confusion could impede the sales of affordable housing properties and
result in deterioration of existing inventory and increased holding
costs associated with these properties. Such costs ultimately would be
borne by the taxpayer.
For these reasons, the RTC finds that the benefits to the public in
adopting an interim final rule outweigh any harm from the delay in
seeking public comment. The RTC solicits comments and will consider
those comments in the adoption of the rule as final, which will take
place within 90 days after the close of the public period.
Regulatory Flexibility Act
As required by the Regulatory Flexibility Act, 5 U.S.C. 601, et
seq., the following initial regulatory flexibility analysis is hereby
provided:
1. Reasons, objectives, and legal bases underlying the interim
final regulations. These elements have been discussed elsewhere in the
preamble.
2. Impact of the interim final regulations on small businesses:
This interim final rule is not expected to have a significant economic
impact on a substantial number of small entities. The RTC expects,
rather, that the interim final regulation will result in a benefit to
small business entities whose service will be utilized in fulfilling
the mandates of the legislation.
3. Overlapping or conflicting federal rules. There are no known
federal rules which overlap, duplicate, or conflict with the interim
final regulations.
List of Subjects in 12 CFR Part 1609
Low and moderate income housing, Reporting and recordkeeping
requirements, Savings associations.
For the reasons set out in the preamble, title 12 chapter XVI of
the Code of Federal Regulations is amended by revising part 1609 to
read as follows:
PART 1609--AFFORDABLE HOUSING DISPOSITION PROGRAM
Sec.
1609.1 Authority, purpose, and scope.
1609.2 Definitions.
1609.3 Clearinghouses.
1609.4 Technical assistance advisors.
1609.5 Brokers and other marketing specialists.
1609.6 RTC staff.
1609.7 Marketing period.
1609.8 Recapture of profits from resale.
1609.9 Suspension of marketing period for sales to nonprofit
organizations and public agencies.
1609.10 Reporting.
1609.11 Transfer of eligible properties to State housing finance
agencies, State housing agencies and local housing agencies.
1609.12 RTC notice and sale of ineligible residential properties
and non-AHDP properties.
Authority: 12 U.S.C. 1441a.
Sec. 1609.1 Authority, purpose, and scope.
The regulations in this part implement section 21A(c) and section
21A(b)(12) of the Federal Home Loan Bank Act, as added by section 501
of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (FIRREA) (12 U.S.C. 1441a), and as amended by the Resolution Trust
Corporation Refinancing, Restructuring, and Improvement Act of 1991, 12
U.S.C. 1441a(c)), the Department of Veterans Affairs and Housing and
Urban Development and Independent Agencies Appropriations Act of 1992,
Public Law 102-139 (105 Stat. 736), the Housing and Community
Development Act of 1992, Public Law 102-550 (106 Stat. 3672), and the
Resolution Trust Corporation Completion Act of 1993 (12 U.S.C. 1441a).
This part applies to the disposition of eligible residential properties
to qualifying purchasers to provide homeownership and rental housing
opportunities for very low-income, lower-income, and moderate-income
families. The Affordable Housing Disposition Program will be carried
out in accordance with applicable requirements of the Fair Housing Act
(42 U.S.C. 3601-3619) and other applicable civil rights authorities.
Sec. 1609.2 Definitions.
(a) Adjusted income and income shall have the meanings given such
terms in section 3(b) of the United States Housing Act of 1937 (42
U.S.C. 1437a(b)(5)).
(b) Adjustment for family size means that factor based on family
size applied by the RTC to median income to determine a family's
adjusted income for purposes of this program. For RTC purposes, 50
percent and 65 percent of area median income numbers shall be adjusted
for family size in the same manner as HUD adjusts 50 percent numbers;
and 80 percent and 115 percent numbers shall be adjusted in the same
manner as HUD adjusts 80 percent numbers.
(c) Annual income has the same meaning as such term has under 24
CFR 813.106.
(d) Bona fide offer means offer to purchase eligible multifamily
property which meets the terms and conditions set forth in the
applicable notice of readiness for sale and includes the information
set forth in Sec. 1609.7(b)(7) of this part.
(e) Bulk purchase offer means an offer to purchase in a single
transaction two or more eligible residential properties.
(f) Cash equivalent offer means an offer after application of a
cash equivalency calculation consisting of a discounted cash flow
comparison between cash offers for a property and seller financed
offers for the same property.
(g) Clearinghouse means:
(1) The State housing finance agency for the State in which an
eligible multifamily property, eligible condominium property or
eligible single family property is located;
(2) The Office of Community Investment (or other comparable
division) within the Federal Housing Finance Board in the jurisdiction
where the eligible multifamily property, eligible condominium property
or eligible single family property is located; and
(3) Any national nonprofit organization (including any nonprofit
entity under title IX of the Housing and Community Development Act of
1968) (42 U.S.C. 3931) that the RTC determines has the capacity to act
as a clearinghouse for information.
(h) Condominium project means real estate which has five or more
residential condominium units and the remaining portions of which are
designated for common ownership solely by the owners of the condominium
units, each owner having an undivided interest in the common elements;
provided however, that such condominium units are not required to be
located in the same structure, but must be part of a common condominium
regime or plan.
(i) Condominium unit means a portion of a condominium project
designated for separate ownership.
(j) Eligible condominium property means a condominium unit:
(1) To which the RTC acquires title in its corporate capacity, its
capacity as conservator, or its capacity as receiver (including its
capacity as the sole owner of a subsidiary corporation of a depository
institution under conservatorship or receivership, which subsidiary has
as its principal business the ownership of real property); and
(2) That has an appraised value or value determined by the RTC that
does not exceed $67,500 in the case of a 1-family residence, $76,000 in
the case of a 2-family residence, $92,000 in the case of a 3-family
residence, and $107,000 in the case of a 4-family residence; or
$101,250 in the case of a 1-family residence, $114,000 in the case of a
2-family residence, $138,000 in the case of a 3-family residence and
$160,500 in the case of a 4-family residence to the extent that
Congress shall have appropriated funds to cover additional costs and
losses resulting from including property with such higher maximum
values.
(k) Eligible multifamily property means a property consisting of
more than four dwelling units:
(1) To which the RTC acquires title either in its corporate
capacity or as receiver (including its capacity as the sole owner of a
subsidiary corporation of depository institution under receivership,
which subsidiary has as its principal business the ownership of real
property), but not in its capacity as an operating conservator, except
to the extent that Congress shall have appropriated funds to cover the
additional costs and losses of including property held in such
capacity; and
(2) That has an appraised value or value determined by the RTC that
does not exceed, for such part of the property as may be attributable
to dwelling use (excluding exterior land improvements), $29,500 per
family unit without a bedroom $33,816 per family unit with 1 bedroom
$41,120 per family unit with 2 bedrooms, $53,195 per family unit with 3
bedrooms, and $58,392 per family unit with 4 or more bedrooms.
(l) Eligible residential property includes eligible single family
property and eligible multifamily property.
(m) Eligible single family property means a one- to four-family
residence (including a cooperative or manufactured home permanently
attached to real estate):
(1) To which the RTC requires title in its corporate capacity, its
capacity as conservator, or its capacity as receiver (including its
capacity as the sole owner of a subsidiary corporation of a depository
institution under conservatorship or receivership, which subsidiary has
as its principal business the ownership of real property); and
(2) That has an appraised value or value determined by the RTC that
does not exceed $67,500 in the case of a 1-family residence, $76,000 in
the case of a 2-family residence, $92,000 in the case of a 3-family
residence, and $107,000 in the case of a 4-family residence, or
$101,250 in the case of a 1-family residence, $114,000 in the case of a
2-family residence, $138,000 in the case of a 3-family residence and
$160,500 in the case of a 4-family residence to the extent that
Congress shall have appropriated funds to cover additional costs and
losses resulting from including property with such higher maximum
values.
(n) HUD means the U.S. Department of Housing and Urban Development.
(o) Ineligible condominium property means a condominium unit:
(1) To which the RTC acquires title in its corporate capacity, its
capacity as conservator, or its capacity as receiver (including its
capacity as the sole owner of a subsidiary corporation of a depository
institution under conservatorship or receivership, which subsidiary
corporation has as its principal business the ownership of real
property);
(2) That has an appraised value or value determined by the RTC that
does not exceed the applicable dollar amount limitation for the
property under paragraph (j)(2)(ii) of this section; and
(3) That is not an eligible condominium property.
(p) Ineligible multifamily property means a property consisting of
more than four dwelling units:
(1) To which the RTC acquires title in its capacity as conservator
(including its capacity as the sole owner of a subsidiary corporation
of a depository institution under conservatorship, which subsidiary
corporation has as its principal business the ownership of real
property);
(2) That has an appraised value or a value determined by the RTC
that does not exceed, for such part of the property as may be
attributable to dwelling use (excluding exterior land improvements),
the dollar amount limitations under paragraph (k)(2) of this section;
and
(3) That is not an eligible multifamily property.
(q) Ineligble residential property includes ineligible single
family property, ineligible multifamily property and ineligible
condominium property.
(r) Ineligible single family property means a one to four family
residence (including a cooperative or manufactured home permanently
attached to real estate):
(1) To which the RTC acquires title in its corporate capacity, its
capacity as conservator, or its capacity as receiver (including its
capacity as the sole owner of a subsidiary corporation of a depository
institution under conservatorship or receivership, which subsidiary has
as its principal business the ownership of real property);
(2) That has an appraised value or value determined by the RTC that
does not exceed the applicable dollar amount limitation for the
property under paragraph (m)(2)(ii) of this section; and
(3) That is not an eligible single family property.
(s) Lower-income families means families and individuals whose
incomes do not exceed 80 percent of area median income, as defined
under 42 U.S.C. 1437a(b)(2) and as determined by the Secretary of HUD,
with adjustment for family size.
(t) Lower-income occupancy requirement(s) means:
(1) With respect to eligible multifamily property, that not less
than 35 percent of all dwelling units purchased by a qualifying
multifamily purchaser in a single transaction shall be made available
for occupancy by, and be maintained as affordable for, lower-income
families during the remaining useful life of the property in which the
units are located, provided that not less than 20 percent of all units
shall be made available for occupancy by, and be maintained as
affordable for, very low-income families during the remaining useful
life of such property. In the event that more than one eligible
multifamily property is purchased as part of a single transaction, not
less than 15 percent of the dwelling units in each separate property
shall be made available for occupancy by and maintained as affordable
for lower-income families (including very low-income families) for the
remaining useful life of the property in which the units are located.
(2) With respect to eligible single family property, that all
eligible single family property purchased by public agencies or
nonprofit organizations shall be made available for occupancy by, and
be maintained as affordable for, lower-income families for the
remaining useful life of the property, or be made available for
purchase by any such family that agrees to occupy the property as a
principal residence for at least 12 months and certifies in writing
that the family intends to occupy the property for at least 12 months.
(3) With respect to eligible condominium property, that, unless
otherwise waived by the RTC in accordance with Sec. 1609.7(c)(4)(ii) of
this part, each eligible condominium property purchased by public
agencies, nonprofit organizations, or for-profit entities shall be made
available for occupancy by, and be maintained as affordable for, lower-
income families for the remaining useful life of the property, or be
made available for purchase by any such family who agrees to occupy the
property as a principal residence for at least 12 months and who
certifies in writing that the family intends to occupy the property for
at least 12 months.
(4) Properties shall be affordable for lower-income and very low-
income families at rent levels which do not exceed those prescribed at
Sec. 1609.7(a)(6), (b)(4), or (c)(4) of this part, as applicable.
(u) LURA means a Land Use Restriction Agreement or other form of
recordable legal agreement between the RTC and the purchaser of an
eligible multifamily property, eligible condominium property or
eligible single family property, which sets forth the lower-income
occupancy requirements and other restrictions on the property.
(v) Marketing period means the period of time during which
qualifying purchasers have exclusive rights to make offers to purchase
eligible single family properties or eligible condominium properties
and to submit expressions of serious interest in purchasing eligible
multifamily properties. The marketing period begins, with respect to an
eligible multifamily property, eligible condominium property or
eligible single family property, on the date specified in the Notice of
Marketing Period issued by the RTC for the property. The marketing
period ends, with respect to an eligible single family property, three
months and one week after the date so specified in the Notice of
Marketing Period, except to the extent that Congress shall have
appropriated funds to cover the additional costs and losses of such
longer period, the marketing period shall end 180 days after the date
so specified in the Notice of Marketing Period. The marketing period
ends, with respect to an eligible multifamily property, three months
after the date so specified in the Notice of Marketing Period; however,
if the marketing period is extended in accordance with the provisions
of Sec. 1609.7(b)(12) of this part, the marketing period will end three
months after the date specified in the subsequent Notice of Marketing
Period or on an earlier date, if any, specified in the subsequent
Notice of Marketing Period. The marketing period ends, with respect to
an eligible condominium property, 180 days after the date so specified
in the Notice of Marketing Period.
(w) Median income for the area has the same meaning as the term has
under section 3(b) of the United States Housing Act of 1937 (42 U.S.C.
1437a(b)). For RTC purposes, 65 percent of area median income numbers
shall be calculated on the basis of HUD's income limits for very low-
income families and 115 percent of area median income numbers, on the
basis of HUD's income limits for lower-income families.
(x) Minority means any Black American, Native American, Hispanic
American, or Asian America.
(y) Minority-owned business means a business--
(1) more than 50 percent of the ownership or control of which is
held by 1 or more minority individuals; and
(2) more than 50 percent of the net profit or loss of which accrues
to 1 or more minority individuals.
(z) MOU means memorandum of understanding.
(aa) Moderate-income families means families and individuals whose
incomes exceed 80 percent but do not exceed 115 percent of area median
income, as determined by the Secretary of HUD, with adjustment for
family size.
(bb) National nonprofit organization means a nonprofit organization
which has membership in more than one State or operates housing and
community development programs or provides technical assistance in more
than one State.
(cc) Net realizable market value means a price below the market
value that takes into account:
(1) Any reductions in holding costs resulting from the expedited
sale of a property including, but not limited to, foregone real estate
taxes, insurance, maintenance costs, security costs, potential
diminution of value from property being held in inventory, and loss of
use of funds; and
(2) The avoidance, where applicable, of fees paid to real estate
brokers, auctioneers, or other individuals of organizations involved in
the sale of property owned by the RTC.
(dd) Non-AHDP property means a property that would constitute an
eligible multifamily property, eligible condominium property or
eligible single family property except that its appraised value or the
value determined by the RTC exceeds the applicable maximum values set
out in paragraph (j)(2) of this section with respect to condominium
units, in paragraph (k)(2) of this section with respect to multifamily
property, and in paragraph (m)(2) of this section with respect to
single family property.
(ee)(1) Nonprofit organization means a private organization
(including a limited equity cooperative):
(i) No part of the net earnings of which inures to the benefit of
any member, shareholder, founder, contributor, lender, management
company or individual and in which no equity interest or investment is
held by a lender or management company, as determined by the RTC; and
(ii) That is approved by the RTC as to financial responsibility.
(2) The determination of whether an organization qualifies as a
nonprofit organization for purposes of this part shall be made by RTC.
(ff) Principal residence means the dwelling at which a household
resides for at least a majority of each year.
(gg) Public agency means any Federal, State, local, or other
governmental entity, whether operating under executive, legislative or
judicial authority, and includes any public housing agency.
(hh) Qualifying condominium purchaser means:
(1) A qualifying household, in the case of eligible condominium
property offered for sale individually; or
(2) In the case of eligible condominium property offered for sale
in bulk, a nonprofit organization, public agency or for-profit entity,
which makes a commitment to satisfy the lower-income occupancy
requirements for the eligible condominium property for which it makes a
purchase offer.
(ii) Qualifying household means a household:
(1) That intends to occupy an eligible single family property or
condominium property as a principal residence;
(2) That agrees to occupy the property as a principal residence for
at least 12 months;
(3) That certifies in writing that it intends to occupy the
property as a principal residence for at least 12 months; and
(4) Whose annual income does not exceed 115 percent of area median
income, as determined by the Secretary of HUD, with adjustment for
family size.
(jj) Qualifying multifamily purchaser means a public agency, a
nonprofit organization, or a for-profit entity which makes a commitment
(for itself or any related entity) to satisfy the lower-income
occupancy requirements for any eligible multifamily property for which
it makes a purchase offer.
(kk) Qualifying purchaser includes qualifying single family
purchasers, qualifying multifamily purchasers, and qualifying
condominium purchasers. For bulk sales transactions, qualifying
purchaser excludes qualifying households.
(ll) Qualifying single family purchaser means:
(1) A qualifying household (including qualifying households with
members who are veterans); or
(2) A public agency or nonprofit organization that agrees to
either:
(i) Make an eligible single family property available for occupancy
as affordable housing for lower-income families (including lower-income
families with members who are veterans) during the remaining useful
life of such property; or
(ii) Make the property available for purchase by any such family
that agrees to occupy the property as a principal residence for at
least 12 months and that certifies in writing that the family intends
to occupy the property for at least 12 months.
(mm) Recapture means the process by which the RTC receives a
percentage of the proceeds from the sale of properties which are
subject to recapture, as set forth in Sec. 1609.8 of this part.
(nn) RTC means the Resolution Trust Corporation.
(oo) Secretary means the Secretary of Housing and Urban
Development.
(pp) Single Transaction means the purchase of more than one
eligible multifamily property by the same qualifying multifamily
purchaser where such purchaser is the winning bidder on each such
property and the properties were listed with one or more clearinghouses
such that bids could be and were submitted contemporaneously by the
purchaser therefore, offered for sale by the RTC as part of a
designated bulk sale transaction or identified by the purchaser and
accepted by RTC as part of a bulk sale bid by the purchaser and
accepted by RTC as part of a bulk sale bid by the purchaser; provided,
however, that in any such event the RTC and the purchaser may elect to
treat such purchases as being made pursuant to separate and distinct
transactions, rather than a single transaction.
(qq) Subsidiary means an entity which is a wholly-owned subsidiary
of a depository institution under conservatorship or receivership, as
applicable, which has as its principal business the ownership of real
property, including wholly-owned subsidiaries of subsidiaries.
(rr) Technical assistance advisor (TAA) means a public agency or
nonprofit organization that is designated by the RTC to provide
assistance to potential purchasers of eligible multifamily properties,
eligible condominium properties and eligible single family properties.
(ss) Useful life means the later of forty (40) years from the date
of the LURA or fifty (50) years from the date the property was
initially occupied as housing; provided, however, that in the event of
an involuntary loss of use of the property caused by seizure,
condemnation, foreclosure, deed in lieu of foreclosure, fire or other
casualty, the useful life of the property shall terminate on the date
of such loss.
(tt) Very low-income families means families and individuals whose
incomes do not exceed 50 percent of area median income, as defined
under 42 U.S.C. 1437a(b)(2) and as determined by the Secretary of HUD,
with adjustment for family size.
(uu) Veteran means a person who served in the active military,
naval, or air service, and who was discharged or release therefrom
under conditions other than dishonorable.
(vv) Women-owned business means a business--
(1) More than 50 percent of the ownership or control of which is
held by one or more women;
(2) More than 50 percent of the net profit or loss of which accrues
to one or more women; and
(3) A significant percentage of senior management positions are
held by women.
Sec. 1609.3 Clearinghouses.
(a) Eligibility. Clearinghouses shall include:
(1) The State housing finance agency for the State in which an
eligible multifamily property, eligible condominium property or
eligible single family property is located;
(2) The Office of Community Investment (or other comparable
division) within the Federal Housing Finance Board in the jurisdiction
where the eligible multifamily property, eligible condominium property
or eligible single family property is located; and
(3) Any national nonprofit organization that the RTC determines has
the capacity to act as a clearinghouse for information.
(b) Designation. The RTC shall designate one or more eligible
clearinghouses to act in that capacity in each State.
(1) State housing finance agencies. The RTC may ask the Governor of
each State to confirm the designation of the State housing finance
agency to serve as a clearinghouse. At the Governor's discretion, the
clearinghouse function may be supported, in part, by a State agency,
which is not a State housing finance agency, serving as a technical
assistance advisor.
(2) Office of Community Investment. The RTC may ask the Federal
Housing Finance Board (FHFB) to designate the Office of Housing Finance
Programs or other comparable division to serve as a clearinghouse. At
the FHFB's discretion, the clearinghouse function may be delegated to,
or supplemented in whole or in part by, its District Banks.
(3) National nonprofit organizations. The RTC may ask national
nonprofit organizations to submit a written request for designation as
a clearinghouse. The request should take the form of a written
expression of interest in serving as a clearinghouse; evidence of
Internal Revenue Service determination of nonprofit status pursuant to
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) or
other appropriate sections, where applicable; a list of cities and
States in which the organization is operating; a description of
experience in promoting low- and moderate-income housing; the latest
annual report; and a description of means by which the organization
will disseminate property information. The RTC may, in its discretion,
accept or reject such a request in writing.
(c) Functions. (1) Under the terms of the MOU's to be entered into
between the RTC and the clearinghouses, the clearinghouses shall
perform the following functions:
(i) Serve as repository of property listings and Notices of
Marketing Period from the RTC for public inspection;
(ii) Make information available upon request during the marketing
period to qualifying purchasers concerning eligible residential
properties for which the clearinghouse has received a Notice of
Marketing Period; and
(iii) Following receipt of a notice required under Sec. 1609.12 of
this part concerning ineligible residential properties or non-AHDP
properties, make the information contained in such notice available,
upon request, to public agencies, nonprofit organizations, qualifying
households, qualifying multifamily purchasers and other purchasers, as
applicable.
(2) Clearinghouses are encouraged to perform the following
functions:
(i) Disseminate RTC property inventories as well as listings of
properties for which they have received Notices of Marketing Period for
sale on a regular basis to State and local government agencies,
nonprofit housing organizations, for-profit entities, organizations
representing special population groups such as the homeless, and
disabled, handicapped, and elderly persons, and members of minority
groups;
(ii) Publicize the availability of eligible residential properties
through various media, including newspapers and other media serving
minority groups; and
(iii) Periodically provide to a wide range of minority-owned
businesses and women-owned businesses engaged in providing affordable
housing, and to nonprofit organizations more than 50 percent of the
control of which is held by 1 or more minority individuals, that are
engaged in providing affordable housing, information that is sufficient
to inform such businesses and organizations of the availability and
terms of financing under section 21A(c)(6)(A)(ii) of the Federal Home
Loan Bank Act (12 U.S.C. 1441a(c)(6)(A)(ii)) concerning purchase loans,
such information to be provided directly, by notices published in
periodicals and other publications that regularly provide information
to such businesses or organizations, or through persons and
organizations that regularly provide information or services to such
businesses or organizations.
(3) A clearinghouse shall not be subject to suit for its failure to
comply with the requirements of this section.
Sec. 1609.4 Technical assistance advisors.
(a) Eligibility. Technical assistance advisors (TAA) may include
clearinghouses, State and local public agencies, and nonprofit
organizations.
(b) Designation. An eligible entity may submit a written request to
the RTC regional and national office for designation as a TAA. Such
request shall include: evidence of Internal Revenue Service
determination of nonprofit status pursuant to section 501(c)(3) of the
Internal Revenue Code (26 U.S.C. 501(c)(3)) or other appropriate
sections, where applicable; a description of experience in promoting
low- and moderate-income housing; and a description of the functions
that the entity proposes to perform, identifying staffing capability to
perform such functions. The RTC may, in its discretion, accept or
reject such a request in writing.
(c) Functions. A TAA may assist a purchaser of an eligible
multifamily property, eligible condominium property or eligible single
family property. It may perform one or more of the following functions:
(1) Qualifying potential purchasers of eligible single family
properties or eligible condominium properties;
(2) Assisting qualifying households to identify suitable properties
and secure financing;
(3) Assisting qualifying multifamily purchasers and qualifying
condominium purchasers to identify suitable properties and secure
financing;
(4) Assisting sponsors of housing for special populations, such as
homeless, disabled, handicapped, and elderly persons, to identify
suitable properties and secure financing;
(5) Providing specialized assistance to qualifying purchasers,
including, but not limited to, families with members who are members of
minority groups and those with members who are veterans;
(6) Providing to minority-owned businesses and women-owned
businesses engaged in providing affordable housing, and to nonprofit
organizations more than 50 percent of the control of which is held by 1
or more minority individuals, that are engaged in providing affordable
housing, information about the availability and terms of financing for
purchase loans, as further described at Sec. 1609.3(c)(2)(iii) of this
part; and
(7) Assisting in other promotional services as needed by the RTC
such as information dissemination, identification of qualifying
purchasers, and other promotional activities as needed.
(d) Compensation. (1) The RTC shall enter into an MOU with each TAA
which will specify the services that the TAA will perform.
(2) The MOU may provide that the RTC shall compensate the TAA for
its services on a basis agreed upon between the RTC and TAA.
Compensation arrangements may include special compensation for services
which lead to the purchase of eligible residential properties by lower-
income families and other groups targeted for assistance.
Sec. 1609.5 Brokers and other marketing specialists.
(a) Designation. The RTC shall involve brokers, auctioneers, and
other marketing specialists in the marketing of eligible residential
properties that it offers for sale.
(b) Functions. The broker, auctioneer, or other marketing
specialists shall:
(1) Actively market the eligible residential properties on its
listing, including using multi-listing services, as appropriate, and
advertising in local media and media targeted to low- and moderate-
income families (including families with one or more members who are
members of minority groups and those with members who are veterans);
(2) Provide to minority-owned businesses and women-owned businesses
engaged in providing affordable housing, and to nonprofit organizations
more than 50 percent of the control of which is held by 1 or more
minority individuals, that are engaged in providing affordable housing,
information about the availability and terms of financing for purchase
loans, as further described at Sec. 1609.3(c)(2)(iii) of this part;
(3) Pre-qualify and counsel prospective purchasers, as prescribed
by the RTC;
(4) Provide an opportunity for prospective purchasers to inspect
the property and to review property records, including purchasers
identified by TAA's, without regard to race, color, religion, sex,
national origin, handicap, and familial status;
(5) Certify that they--
(i) Will not decline to show properties, or discriminate in the
marketing or sale of properties because of race, color, religion, sex,
national origin, handicap, or familial status;
(ii) Will prominently display the Fair Housing Poster in all
offices where brokering and sales activities take place;
(iii) Will use the Equal Housing Opportunity logo, slogan, or
statement in advertising; and
(iv) Will use any available minority media (in addition to other
media that are used) when advertising properties;
(6) Present offers or contracts from qualifying purchasers to the
RTC for acceptance, rejection, or counteroffer, along with
certifications of eligibility from the qualifying purchasers; and
(7) Perform all other responsibilities incident to the sale and
closing.
(c) Compensation. The RTC shall enter into a listing agreement with
each broker or, at its discretion, utilize open listing agreements
which specify the mutual responsibilities of the RTC and the broker and
which provide for compensation as a percentage of the sales price of a
property sold with the broker's services. The RTC shall compensate the
auctioneers and other marketing specialists for their services on the
basis of a contract which specifies the services to be provided and
rate of compensation. Compensation arrangements may include incentives
for the sale of properties to lower-income families and individuals
(including lower-income veterans and lower-income families with members
who are veterans).
Sec. 1609.6 RTC staff.
(a) Designation. The RTC shall designate affordable housing
disposition specialists on the staff of field offices.
(b) Functions. (1) The affordable housing disposition specialists
generally shall perform the following functions:
(i) Coordinate sales of eligible residential properties in each
office and serve as an advocate for the program;
(ii) Review and approve written requests from eligible entities to
serve as TAA's;
(iii) Negotiate an MOU with each TAA regarding the services to be
performed and the method and amount of compensation;
(iv) Negotiate an MOU with the clearinghouses regarding the
services to be performed;
(v) Within a reasonable time after acquisition of title to eligible
residential properties, send a list of eligible residential properties
to clearinghouses with a Notice of Marketing Period, and coordinate the
sale of properties to nonprofit organizations or public agencies;
(vi) Monitor marketing efforts of clearinghouses, TAA's, and
brokers or other marketing specialists, giving particular attention to
marketing of eligible single family properties and eligible condominium
properties for sale to lower-income families, and marketing of
properties to special needs populations, veterans and minority groups;
(vii) Identify potential sources of financing for eligible
residential properties through coordination with Federal, State, and
local agencies and private lenders and investors;
(viii) Coordinate with other Federal agencies that are selling
residential properties in the same market areas;
(ix) Provide to minority-owned businesses and women-owned
businesses engaged in providing affordable housing, and to nonprofit
organizations more than 50 percent of the control of which is held by 1
or more minority individuals, that are engaged in providing affordable
housing, information about the availability and terms of financing for
purchase loans, as further described at Sec. 1609.3(c)(2)(iii) of this
part; and
(x) Carry out all other necessary activities for the program.
(2) The functions performed by the affordable housing disposition
specialists may be amended or expanded from time to time at the
discretion of the RTC.
Sec. 1609.7 Marketing period.
(a) Eligible single family property--(1) Notice of Marketing
Period. (i) Subject to exercise by the RTC of its authority under
Secs. 1609.9 and 1609.11 of this part, when an eligible single family
property is ready for marketing, the RTC shall send a Notice of
Marketing Period to the clearinghouse serving the area in which the
property is located. The Notice shall be transmitted by certified mail
or any other means of communication with date and time confirmation.
(ii) The property listing accompanying the Notice shall contain
basic information about the property, including location, condition and
information relating to the estimated fair market value of the
property, and such other information as the RTC may determine to be
useful.
(iii) The Notice shall specify a date that begins the start of the
Marketing Period and state that the Marketing Period ends 3 months and
one week, or such longer time period as may be applicable, after such
date.
(2) Qualifying single family purchases--(i) Households. To qualify
to purchase an eligible single family property, a household must
certify in writing to the RTC that its annual income does not exceed
115 percent of area median income, with adjustment for family size, and
that it intends to occupy the property as a principal residence for at
least 12 months.
(ii) Public agencies and nonprofit organizations. To qualify to
purchase one or more eligible single family properties, a public agency
or nonprofit organization must certify to the RTC that it will make the
property available for occupancy by, and maintain it as affordable for,
lower-income families (including lower-income families with members who
are veterans) for the remaining useful life of such property; or make
the property available for purchase by any such family that agrees to
occupy the property as a principal residence for at least 12 months and
certifies in writing that the family intends to occupy the property for
at least 12 months.
(iii) Penalty for false certifications. A household that provides
false or incomplete information regarding its income or that falsely
certifies that it intends to occupy the property as its principal
residence can be fined or imprisoned pursuant to 18 U.S.C. 1001 and 31
U.S.C. 3802. A household that sells the property within 12 months of
acquisition will be subject to the recapture provisions set forth in
Sec. 1609.8 of this part.
(3) Offer and sale. The RTC may sell eligible single family
property to qualifying households, nonprofit organizations, and public
agencies without regard to any minimum sale price. The RTC may, before
the end of the marketing period, accept purchase offers on eligible
single family property from qualifying single family purchasers.
(4) Preference for sales that benefit lower income groups--(i)
Purchase offers from qualifying households. In choosing among equal
purchase offers from qualifying households for eligible single family
property, the RTC will give preference to bids from households in the
lower or lowest income group (e.g. very low-income over lower-income);.
(ii) Purchase offers from nonprofit organizations and public
agencies. In choosing among bulk purchase offers from nonprofit
organizations and public agencies, the RTC will give preference to the
offer that would reserve the highest percentage of single family
properties for occupancy or purchase by very low-income families and
would retain such affordability for the longest term (not exceeding the
term of the applicable LURA). The preference will be calculated in
accordance with the following formula:
Add to the cash equivalent offer, 0.25% of that cash equivalent
offer for each 1% of the properties set aside for occupancy or
purchase by very low-income families.
Example: Nonprofit organization X offers to purchase 10 eligible
single family properties for $300,000 and agrees to reserve 5 of
those properties for occupancy or purchase by very low-income
families. Nonprofit organization Y offers to purchase the same 10
eligible single family properties for $325,000 and intends to
reserve all of the properties for occupancy and purchase by lower-
income families (but not very low-income families). Although Y has
offered more for the properties, the properties should be sold to
nonprofit organization X for $300,000.
X's offer=$300,000.
X's preference price=$300,000+
($300,000 x 50 x 0.0025)=$300,000+
$37,500=$337,500
Y's offer=$325,000. Y does not receive a preference because Y did
not set aside any of the properties for occupancy or purchase by
very low-income families.
(5) Deed restrictions--(i) Qualifying households. An eligible
single family property purchased by a qualifying household which is
subject to recapture pursuant to Sec. 1609.8 of this part must be so
restricted by a LURA or other recorded instrument for the recapture
period.
(ii) Nonprofit organizations and public agencies. Eligible single
family properties purchased by a public agency or nonprofit
organization for rental or resale to lower-income families must be so
restricted by a LURA or other recorded instrument which is binding upon
successors in interest, with the provision that the property may
subsequently be sold to a lower-income family without further deed
restrictions (except applicable recapture restrictions). The LURA or
other recorded legal instrument shall also require the property owner
to rent such properties at affordable rates, to cooperate with periodic
compliance reviews and to pay a reasonable fee to cover the cost of the
reviews. The LURA or other recorded instrument shall reflect any
commitment, made in accordance with a purchase offer pursuant to
paragraph (a)(4)(ii) of this section, to reserve a percentage of single
family properties for occupancy or purchase by very low-income families
and retain such affordability for the longest term.
(iii) Lower-income occupancy requirements shall be judicially
enforceable against purchasers of eligible single family property or
their successors in interest by affected very low- and lower-income
families, State housing finance agencies, and any agency, corporation,
or authority of the United States Government.
(6) Restrictions on the rental of single family properties. (i) In
the event that a public agency or nonprofit organization purchases one
or more eligible single family properties for rental purposes, the
rents charged to very low-income families may not exceed 30 percent of
the adjusted income of a family whose income equals 50 percent of area
median income, with adjustment for family size; and the rents charged
to lower-income families may not exceed 30 percent of the adjusted
income of a family whose income equals 65 percent of area median
income, with adjustment for family size. Adjustments for family size
for purposes of determining the maximum rent that may be charged with
respect to a particular eligible single family property shall be
calculated on the basis of the size of household anticipated to occupy
a unit with the particular number of bedrooms as follows:
Unit Size
0-Bedroom 1-BR 2-BR 3-BR 4-BR 5-BR
Household Size
1 Person 2 Pers. 3 Pers. 5 Pers. 7 Pers. 8 Pers.
Example. Thus, for example, rent for a 3-bedroom unit occupied
by a very low-income family will be based upon the HUD-determined
income for a household at 50% of area median income which has 5
members. The rent for a 2-bedroom unit occupied by a lower-income
household will be based upon the HUD figure for a household at 65%
of median income which has 3 members.
(ii) Where a property is occupied by a family receiving housing
assistance payments, pursuant to section 8 of the United States Housing
Act of 1937 (42 U.S.C. 1437f), as amended, the family's contribution
toward rent may not exceed 30 percent of the family's adjusted income.
(7) Continued occupancy of current residents. No public agency or
nonprofit organization which purchases one or more eligible single
family properties may terminate the occupancy of any person residing in
the property on the date of purchase for purposes of meeting the lower-
income occupancy requirement. The purchaser shall be in compliance with
the requirement if each newly vacant dwelling unit in the property is
reserved for lower-income occupancy until the lower-income occupancy
requirement is met.
(8) Property offered for resale. If the RTC receives a purchase
offer, but fails to close on an eligible single family property, the
RTC may accept an alternative contract offer or notify the appropriate
clearinghouses so that the property can be re-offered for sale for an
appropriate interval determined by the RTC, provided, however, that the
appropriate interval shall not exceed 97 days, or such other period as
may be applicable pursuant to paragraph (a)(1) of this section.
(9) Sales after the marketing period. If the RTC does not receive a
purchase offer for an eligible single family property within the
applicable marketing period, the RTC may sell the property to any
purchaser.
(10) Avoidance of displacement. Prior to or during the marketing
period, the RTC may sell an eligible single family property to the
household residing in the property without regard to the income of the
household, provided that:
(i) The household was residing in the property at the earlier of
the time of sale or the time the Notice of Marketing Period was
provided to the clearinghouse;
(ii) The sale was necessary to avoid the displacement of, and
unnecessary hardship to, the resident household;
(iii) The resident household intends to occupy the property as its
principal residence for at least 12 months; and
(iv) The resident household certifies in writing that the household
intends to occupy the property for at least 12 months and acknowledges
that it is subject to the penalties described in paragraph (a)(2)(iii)
of this section if the household fails to comply with the residency
requirement.
(b) Eligible multifamily property--(1) Notice of Marketing Period.
(i) Subject to exercise by the RTC of its authority under Secs. 1609.9
and 1609.11 of this part, the RTC shall send a Notice of Marketing
Period to clearinghouses when an eligible multifamily property is ready
for marketing to qualifying multifamily purchasers. The RTC shall send
a second Notice of Marketing Period to the clearinghouse if it
determines, in accordance with paragraph (b)(12) of this section, to
extend the marketing period for an eligible multifamily property. The
Notice shall be transmitted by certified mail or any other means of
communication with date and time confirmation.
(ii) The property listing accompanying the Notice shall contain
basic information about the property, including location, number of
units (identified by number of bedrooms) and information relating to
the estimated fair market value of the property, and such other
information as the RTC may determine to be useful.
(iii) The Notice shall specify a date that begins the start of the
marketing period and state that the Marketing Period ends 3 months, or
such other time period as may be applicable, after such date.
(iv) During the marketing period, the RTC shall offer an eligible
multifamily property exclusively to qualifying multifamily purchasers.
(v) The RTC shall allow qualifying multifamily purchasers
reasonable access to eligible properties for purposes of inspection.
(2) Qualifying multifamily purchasers. Prior to receiving access to
an eligible multifamily property, a public agency, nonprofit
organization, or for-profit entity must make a written commitment (for
itself or any related entity) to the listing broker or other marketing
specialist that it is a qualifying multifamily purchaser which will
satisfy the lower-income occupancy requirements in any eligible
multifamilly property for which it requests access, if and when it
makes an offer to purchaser that property. The written commitment
should acknowledge the terms and conditions governing the sale of
eligible multifamily properties. This commitment will be included as a
part of the bid package.
(3) Determination of market value. The RTC shall establish a market
value and estimate a net realizable market value for each eligible
multifamily property, giving consideration to the lower-income
occupancy requirements and the related rent limitations. The RTC shall
sell each eligible multifamily property at a price no less than the
estimated net realizable market value unless sale at a lower price is
necessary to facilitate an expedited sale of such property and to
enable a public agency or nonprofit organization to comply with the
applicable lower-income occupancy requirements. If the RTC receives an
offer higher than its estimate of the net realizable market value, the
amount of such offer shall be deemed to be the net realizable market
value.
(4) Lower-income occupancy requirements--(i) Rent limitations. (A)
To comply with lower-income occupancy requirements, the rents charged
to very low-income families may not exceed 30 percent of the adjusted
income of a family whose income equals 50 percent of area median
income, with adjustment for family size; and the rents charged to
lower-income families may not exceed 30 percent of the adjusted income
of a family whose income equals 65 percent of area median income, with
adjustment for family size. Adjustments for family size for purposes of
determining the maximum rent that may be charged shall be made as shown
at paragraph (a)(6) of this section.
(B) Where a unit is occupied by a family receiving housing
assistance payments, pursuant to section 8 of the United States Housing
Act of 1937 (42 U.S.C. 1437f), as amended, the family's contribution
toward rent may not exceed 30 percent of the family's adjusted income.
(ii) Continued occupancy of current residents. No purchaser of an
eligible multifamily property may terminate the occupancy of any person
residing in the property on the date of purchase for purposes of
meeting the lower-income occupancy requirements. The purchaser shall be
in compliance with the requirement if each newly vacant dwelling unit
is reserved for lower-income occupancy until the lower-income occupancy
requirements are met.
(iii) Financial infeasibility. The Secretary, the RTC or its
successor, or the State housing finance agency for the State in which
the property is located may temporarily reduce the lower-income
occupancy requirements applicable to a property sold under this program
if the Secretary or the applicable State housing finance agency
determines that an owner's compliance with such requirements is no
longer financially feasible. The owner of the property shall make a
good-faith effort to return lower-income occupancy to the level
required by the property's LURA, and the Secretary or the agency, as
appropriate, shall review the reduction annually to determine whether
financial infeasibility continues to exist.
(5) Expression of serious interest. Before the end of the marketing
period, a qualifying multifamily purchaser may express serious interest
in purchasing an eligible multifamily property from the RTC. The
expression of serious interest shall be submitted to the listing broker
or other marketing specialist and shall provide evidence that the
purchaser intends to prepare a bona fide offer and has the ability to
purchase the property. At a minimum, the documentation supporting the
expression of serious interest would include:
(i) Confirmation of public, nonprofit, or for-profit status;
(ii) A financial statement and evidence of a source of equity
funds; and
(iii) Certification of no prior exclusion from Federal procurement
or non-procurement programs.
(6) Notice of Readiness for Sale. At the end of the marketing
period, the RTC will send a Notice of Readiness for Sale only to
qualifying multifamily purchasers that submitted, during the marketing
period, a written expression of serious interest in an eligible
multifamily property. This Notice will outline the minimum terms and
conditions for sale of the property.
(7) Bona fide offer. Within forty-five days, or such longer time
period as RTC may determine, after receipt of a Notice of Readiness for
Sale, a qualifying multifamily purchaser may submit a bona fide offer
to purchase the property. The Notice of Readiness for Sale will be
deemed received 5 days after it is mailed. The bona fide offer, as
specified in the bid package, should include:
(i) A sales contract constituting a binding offer for a sum certain
accompanied by a reasonable earnest money deposit specified by the RTC;
(ii) A conditional commitment for financing from a lender, a
request for seller financing, or other evidence, acceptable to the RTC,
of financial resources to consummate the transaction;
(iii) A written commitment to meet specific lower-income occupancy
objectives and the process for complying with these objectives;
(iv) A written description of experience in housing ownership or
management, preferably of low- and moderate-income housing;
(v) Reaffirmation or revision of the information submitted with the
expression of serious interest;
(vi) A governing body resolution, where applicable, authorizing the
purchase and affirming the commitment to meet the lower-income
occupancy requirements.
(8) Failed offers. (i) If, before the expiration of the period for
submission of bona fide offers, an offer to purchase a property
initially accepted by the RTC is subsequently rejected or fails (for
any reason), the RTC shall accept another offer to purchase the
property that complies with the terms and conditions established by the
RTC (if another offer was made during the period for submission of bona
fide offers). This provision does not require a qualifying multifamily
purchaser whose offer is accepted during the bona fide offer period to
purchase the property before the expiration of that period.
(ii) If, after the expiration of the period for the submission of
bona fide offers, the offer to purchase a property initially accepted
by the RTC is subsequently rejected or fails (for any reason), the RTC,
in its sole discretion, may negotiate with any of the parties who
submitted bona fide offers on the property during the bona fide offer
period to secure an offer acceptable to the RTC.
(9) Preference for sales that benefit lower income groups. (i) In
choosing among bona fide offers for eligible multifamily property, the
RTC will give preference to the offer that would reserve the highest
percentage of dwelling units for occupancy by very low-income families
and lower-income families and would retain such affordability for the
longest term (not exceeding the term of the deed restrictions). For
purposes of making calculations pursuant to this paragraph (b)(9)
alone, as described in the following examples, ``lower-income
families'' shall mean families and individuals whose incomes are
greater than 50 percent of area median income but do not exceed 80
percent of area median income, as defined under 42 U.S.C. 1437a(b)(2)
and as determined by the Secretary of HUD, with adjustment for family
size. The preference will be calculated in accordance with the
following formula:
Add to the cash equivalent offer--
0.25% of the cash equivalent offer amount for each 1% of the ``very
low-income'' units that exceed the minimum 20% very low-income units
requirement, and
0.125% of the cash equivalent offer amount for each 1% of the
``lower income'' units that exceed the minimum 15% lower-income
units requirement.
Example: Multifamily purchaser A offers to purchase an eligible
multifamily property for $1,000,000 and agrees to reserve 20% of the
units for occupancy by very low-income families and 30% for lower-
income families. Multifamily purchaser B offers to purchase the same
eligible multifamily property for $900,000 and intends to reserve
50% of the units for occupancy by very low-income families and 50%
for occupancy by lower-income families. Multifamily purchaser C
offers to purchase the eligible multifamily property for $1,015,000
and agrees to reserve 20% of the units for occupancy by very low-
income families and 15% for occupancy by lower-income families.
Under the preference formula described above, the property should be
sold to purchaser A for $1,000,000.
A's offer=$1,000,000.
A's preference price=$1,000,000+
($1,000,000 x 15 x 0.00125)=$1,000,000+
$18,750=$1,018,750.
B's offer=$900,000.
B's preference price=$900,000+
($900,000 x 30 x 0.0025)+
($900,000 x 35 x 0.00125)=$900,000+
$67,500+$39,375=$1,006,875.
C's offer=$1,015,000. C does not receive a preference because C did
not set aside any units above the minimum 20% for very low-income
families and 15% for lower income families.
(ii) No preference will be given for the substitution of units for
very low-income families for units required to be maintained for lower-
income families (e.g., an offer which proposes to provide 35% very low-
income units and no lower-income units will be treated no differently
from one meeting the basic 20% very low- and 15% lower-income unit
requirement).
(10) Deed restrictions. (i) Lower-income occupancy requirements
shall be judicially enforceable against purchasers of eligible
multifamily property or their successors in interest by affected very
low- and lower-income families, State housing finance agencies, and any
agency, corporation, or authority of the United States Government.
(ii) Lower-income occupancy requirements shall be contained in a
LURA or other recorded legal instrument which shall require the
property owner to cooperate with periodic compliance reviews and to pay
a reasonable fee to cover the cost of the reviews. The LURA or other
recorded instrument shall reflect any commitment, made in accordance
with a purchase offer pursuant to paragraph (b)(9) of this section, to
reserve a higher percentage of dwelling units for occupancy by very
low-income families and lower-income families and retain such
affordability for the longest term.
(11) Offer and sale of multifamily properties in bulk--
(i) Expression of serious interest. (A) The RTC may, in its
discretion, list multiple eligible multifamily properties with a
clearinghouse for bulk sale. During the marketing period, a qualifying
multifamily purchaser may submit an expression of serious interest in a
bulk sale package offered by the RTC.
(B) During the marketing period, a qualifying multifamily purchaser
also may submit an expression of serious interest in a bulk package of
its own choice accompanied by a list of eligible multifamily
properties.
(ii) Notice of Readiness for Sale. At the end of the marketing
period, the RTC shall send a Notice of Readiness for Sale to each
qualifying multifamily purchaser who expressed serious interest in
making a bulk purchase. The notice will identify the properties in the
bulk sale package and will outline the minimum terms and conditions for
the sale of the properties in the bulk sale package. The RTC will
consider the expressions of serious interest, but reserves the right to
determine the final composition of the bulk sale package.
(iii) Bona fide offer. Within 45 days, or such other time period as
RTC may determine, of receipt of the Notice of Readiness for Sale, a
qualifying multifamily purchaser may submit a bona fide purchase offer
for the bulk sale package which conforms to the terms and conditions
set forth in the Notice of Readiness for Sale. A qualifying multifamily
purchaser, in its discretion, may submit both individual and bulk
purchase offers for each multifamily property for which the RTC
received an expression of serious interest from a purchaser interested
in an individual sale. The offers shall be in conformance with the
requirements in paragraph (b)(7) of this section.
(iv) All other restrictions on the sale of eligible multifamily
property shall apply to bulk sales of eligible multifamily property.
Properties purchased in a bulk sale shall be subject to the lower-
income occupancy requirements applicable to properties purchased in a
single transaction, as such terms are defined in Sec. 1609.2 of this
part.
(v) At any time during the marketing period for a bulk package of
eligible multifamily properties, a qualifying multifamily purchaser may
submit to the RTC a notice of serious interest with respect to any
single eligible multifamily property within the bulk package, and the
RTC may determine to sell such eligible multifamily property to a
qualifying multifamily purchaser.
(12) Sale to other purchasers. If the RTC does not receive an
expression of serious interest with respect to an eligible multifamily
property during the marketing period, or does not receive a bona fide
offer for such a property within the period following the date of
receipt of a Notice of Readiness for Sale, the RTC may sell the
property, individually or in combination with other properties, to any
purchaser(s).
(c) Eligible condominium property--(1) Notice of Marketing Period.
(i) Subject to the exercise by the RTC of its authority under
Secs. 1609.9 and 1609.11 of this part, the RTC shall send a Notice of
Marketing Period to clearinghouses when an eligible condominium
property is ready for marketing to qualifying condominium purchasers.
The Notice shall be transmitted by certified mail or any other means of
communication with date and time confirmation.
(ii) The Notice shall specify a date that begins the marketing
period and shall state that the marketing period ends 180 days, or such
other time period as may be applicable, after such date.
(iii) The Notice shall state whether the eligible condominium
property is offered for sale individually or in bulk.
(iv) The property listing accompanying the Notice shall contain
basic information about the property and such other information as the
RTC may determine to be useful.
(v) The RTC shall allow qualifying condominium purchasers
reasonable access to eligible properties for purposes of inspection.
(2) Marketing eligible condominium properties. Prior to listing an
eligible condominium property with a clearinghouse, the RTC, in its
sole discretion, will determine whether to offer the property for sale
individually or as part of a bulk sale package of multiple eligible
condominium properties. Subject to paragraph (c)(4)(vii) of this
section, the composition of a bulk sale package will be determined
solely by the RTC prior to listing the properties with a clearinghouse.
Properties listed for sale on an individual basis will be available for
purchase by qualifying households only. Properties listed as part of a
bulk sale package may be purchased by nonprofit organizations, public
agencies or for-profit entities. After 90 days of marketing, properties
listed for individual sales may be relisted as part of a bulk sale
package for the remaining 90 days.
(3) Individual sales--(i) Qualifying condominium purchasers;
qualifying households. To qualify to purchase an eligible condominium
property, a household must certify in writing to the RTC that its
income does not exceed 115 percent of area median income, with
adjustment for family size; and that it intends to occupy the property
as a principal residence for at least 12 months.
(ii) Avoidance of displacement. Prior to or during the marketing
period, the RTC may sell an eligible condominium property to the
household residing in the property without regard to the income of the
household, provided that:
(A) The household was residing in the property at the earlier of
the time of sale or the time the Notice of Marketing Period was
provided to the clearinghouse;
(B) The sale is necessary to avoid the displacement of, and
unnecessary hardship to, the resident household;
(C) The resident household intends to occupy the property as its
principal residence for at least 12 months; and
(D) The resident household certifies in writing that it intends to
occupy the property for at least 12 months.
(iii) Penalty for false certifications. A household that provides
false or incomplete information regarding its income or that falsely
certifies that it intends to occupy the property as its principal
residence can be fined or imprisoned pursuant to 18 U.S.C. 1001 and 31
U.S.C. 3802. A household that sells the property within 12 months of
acquisition will be subject to the recapture provisions set forth in
Sec. 1609.8 of this part.
(iv) Deed restrictions. An eligible condominium property purchased
by a qualifying household or a resident household which is subject to
recapture must be so restricted for the recapture period by deed or
other recorded instrument.
(4) Bulk sales to public agencies, nonprofit organizations and for-
profit entities--(i) Lower-income occupancy requirement. To qualify to
purchase a bulk package of eligible condominium properties, a public
agency, nonprofit organization, or for-profit entity must certify to
the RTC that it will make 100 percent of the properties purchased
available for occupancy by, and will maintain the properties as
affordable for, lower-income families (including lower-income families
with members who are veterans) for the remaining useful life of such
properties, or make the properties available for purchase by any lower-
income family that agrees to occupy the property as a principal
residence for at least 12 months and certifies in writing that the
family intends to occupy the property for at least 12 months and is
subject to the penalties described in paragraph (c)(3)(iii) of this
section if the household fails to comply with the residency
requirement.
(ii) Waiver of 100 percent lower-income occupancy requirement.
Notwithstanding the 100 percent lower-income occupancy requirement set
forth in paragraph (c)(4)(i) of this section, the RTC may, in its sole
discretion, waive the 100 percent lower-income occupancy requirement
and provide instead that not less than 35 percent of all eligible
condominium properties purchased shall be made available for occupancy
by, and be maintained as affordable for, lower-income families for the
remaining useful life of the property, or be made available for
purchase by any such family that agrees to occupy the property as a
principal residence for at least 12 months. Any determination by the
RTC to reduce the percentage of properties set aside for lower-income
and very low-income families must be made prior to listing the property
with a clearinghouse and the applicable percentages shall be specified
in the Notice of Marketing Period.
(iii) Rent limitations. (A) To comply with lower-income occupancy
requirements, the rents charged to very low-income families may not
exceed 30 percent of the adjusted income of a family whose income
equals 50 percent of area median income, with adjustment for family
size; and the rents charged to lower-income families may not exceed 30
percent of the adjusted income of a family whose income equals 65
percent of area median income, with adjustment for family size.
Adjustments for family size for purposes of determining the maximum
rent that may be charged shall be calculated in the manner set forth in
paragraph (a)(6) of this section.
(B) Where a unit is occupied by a family receiving housing
assistance payments pursuant to section 8 of the United States Housing
Act of 1937 (42 U.S.C. 1437f), as amended, the family's contribution
toward rent may not exceed 30 percent of the family's adjusted income.
(iv) Continued occupancy of current residents. No public agency,
nonprofit organization, or for-profit entity which purchases eligible
condominium property may terminate the occupancy of any person residing
in the property on the date of purchase for purposes of meeting the
lower-income occupancy requirement. The purchaser shall be in
compliance with the lower-income occupancy requirement if each newly
vacant dwelling unit is reserved for lower-income occupancy until such
requirement is met.
(v) Financial infeasibility. The Secretary, the RTC or its
successor, or the State housing finance agency for the State in which
the property is located may temporarily reduce the lower-income
occupancy requirements applicable to a property sold under this program
if the Secretary or the applicable State housing finance agency
determines that an owner's compliance with such requirements is no
longer financially feasible. The owner of the property shall make a
good-faith effort to return lower-income occupancy to the level
required by the property's LURA, and the agency, as appropriate, shall
review the reduction annually to determine whether financial
infeasibility continues to exist.
(vi) Written commitment before access. Prior to receiving access to
an eligible condominium property, a public agency, nonprofit
organization, or for-profit entity must make a written commitment (for
itself or any related entity) to the listing broker or other marketing
specialist that it is a qualifying condominium purchaser that will
satisfy the lower-income occupancy requirements in any eligible
condominium property for which it requests access, if and when it makes
an offer to purchase that property. The written commitment should
acknowledge the terms and conditions governing the sale of eligible
condominium properties.
(vii) Location. The RTC may not sell or offer to sell as part of
the same negotiation or purchase multiple eligible condominium
properties that are not located in the same condominium project. The
properties need not be located in the same structure.
(viii) Preference for sales that benefit lower income groups. In
choosing among bulk purchase offers from nonprofit organizations,
public agencies and for-profit entities, the RTC will give preference
to the offer that would reserve the highest percentage of dwelling
units for occupancy or purchase by very low-income families and lower-
income families and would retain such affordability for the longest
term (not exceeding the term of the LURA). The preference will be
calculated in accordance with the following formula:
Add to the cash equivalent offer--
0.25% of the cash equivalent offer for each 1% of the units set
aside for occupancy or purchase by very low-income families, and
in response to bulk sale offers with respect to which the RTC has
determined to waive the 100 percent lower-income occupancy
requirement pursuant to paragraph (c)(4)(ii) of this section, 0.125%
of the cash equivalent offer for each 1% of the units set aside for
occupancy by lower-income families that exceeds the applicable
lower-income unit requirement; provided, however, that very low-
income units receiving a 0.25% preference for purposes of the
preceding clause, shall not also receive a benefit under this
clause.
Example 1: Nonprofit organization X offers to purchase 10
eligible condominium properties for $300,000 and agrees to reserve 5
of those properties for occupancy or purchase by very low-income
families. For-profit entity Y offers to purchase the same 10
eligible condominium properties for $325,000 and intends to reserve
all of the properties for occupancy and purchase by lower-income
families (but not very low-income families). Although for-profit
entity Y has offered more for the properties, the properties should
be sold to nonprofit organization X for $300,000.
X's offer=$300,000.
X's preference price=$300,000+ ($300,000 x 50 x x0.0025)=$300,000+
$37,500=$337,500
Y's offer=$325,000. Y does not receive a preference because Y did
not set aside any units for occupancy or purchase by very low-income
families.
Example 2: The RTC markets 20 eligible condominium properties in
bulk, with a requirement that only 35% (7) of those properties be
made available for occupancy by or sale to lower-income families.
Nonprofit organization X and for-profit entity Y each offer to
purchase all 20 eligible condominium properties for $600,000.
Nonprofit organization X agrees to reserve 7 of those properties for
occupancy or purchase by very low-income families. For-profit entity
Y agrees to reserve 2 of the properties for occupancy and purchase
by very low-income families and the remaining 18 properties for
occupancy by lower-income families that are not very low-income
families. Under the preference formula, the properties are sold to
for-profit entity Y.
X's offer=$600,000.
X's preference price=$600,000+
($600,000 x 35 x 0.0025)=$600,000+
$52,500=$652,500
Y's offer=$600,000.
Y's preference price=$600,000+
($600,000 x 10 x 0.0025) (for very low-
income units)+($600,000 x 55 x 00125)=
$600,000+$15,000+$41,250=$656,250.
(ix) Deed restrictions.--(A) Eligible condominium properties
purchased by a public agency, nonprofit organization, or for-profit
entity for rental or resale to lower-income families must be so
restricted by a LURA or other recorded instrument which is binding upon
successors in interest, with the provision that the property may
subsequently be sold to a lower-income family without further deed
restrictions (except for recapture restrictions). The deed or other
recorded legal instrument shall also require the property owner to
cooperate with periodic compliance reviews and to pay a reasonable fee
to cover the cost of the review. The LURA or other recorded instrument
shall reflect any commitment, made in accordance with a purchase offer
pursuant to paragraph (c)(4)(viii) of this section, to reserve a higher
percentage of eligible condominium properties for occupancy by or sale
to very low-income families and lower-income families and retain such
affordability for the longest term.
(B) Lower-income occupancy requirements shall be judicially
enforceable against purchasers of eligible condominium property or
their successors in interest by affected very low- and lower-income
families, State housing finance agencies, and any agency, corporation,
or authority of the United States Government.
(x) At any time during the marketing period for a bulk package of
eligible condominium properties, a qualifying single family purchaser
may submit to the RTC a notice of serious interest with respect to one
eligible condominium property within the bulk package, and the RTC may
determine to sell one eligible condominium property to a qualifying
household.
(5) Offer and sale. The RTC shall establish a market value for each
eligible condominium property. The RTC may sell eligible condominium
property to qualifying households, nonprofit organizations, and public
agencies without regard to any minimum sales price.
(6) Sale to other purchasers. If the RTC does not receive a
purchase offer with the respect to an eligible condominium property
during the marketing period the RTC may sell the property, individually
or in combination with other properties, to any other purchasers.
(d) Extended marketing period. If it determines that an eligible
multifamily property, eligible condominium property or eligible single
family property has not been properly offered for the applicable
marketing period in accordance with section 21A(c) of the Federal Home
Loan Bank Act (12 U.S.C. 1441a(c)) and the applicable regulations, the
RTC may provide a second Notice of Marketing Period and offer for sale
such property. During any such extended marketing period, the
provisions for marketing and selling the eligible multifamily property,
eligible condominium property or the eligible single family property
under this Sec. 1609.7, including the duration of applicable time
periods (unless shortened by the RTC), shall apply.
Sec. 1609.8 Recapture of profits from resale.
(a) Property subject to recapture. All eligible single family
property and eligible condominium property sold to the following
purchasers shall be subject to the recapture provisions of this section
if resold by the purchaser within one-year after acquisition of the
property:
(1) Qualifying households;
(2) Lower-income families who purchase the property from a
nonprofit organization, a public agency or a for-profit entity, in
accordance with Secs. 1609.7(a), 1609.7(c), 1609.9, or 1609.11 of this
part; and
(3) Resident households who purchase the property under the
avoidance of displacement provisions in Secs. 1609.7(a)(10) or
1609.7(c)(3) of this part.
(b) Recapture formula. The RTC shall receive 75 percent of the
amount of any proceeds from resale (after any broker commissions and
other expenses of sale) in excess of the sum of:
(1) The original sale price for the acquisition of the property by
the purchasers listed in paragraph (a) of this section;
(2) The actual cost of any improvements to the property made after
the date of the acquisition; and
(3) Any closing costs in connection with the acquisition.
(c) Exceptions to recapture--(1) Relocation. The RTC may, in its
discretion, waive the applicability of the recapture requirement of
this Sec. 1609.8 to any qualifying household, lower-income family or
resident household. The RTC may grant any such waiver only for good
cause shown, including any necessary relocation of the affected
household.
(2) Other recapture provisions apply. The recapture provisions
shall not apply to any eligible single family property or eligible
condominium property for which a portion of the sale proceeds or any
subsidy provided in connection with the acquisition of the property is
required to be recaptured or repaid under any other Federal, State, or
local law (including section 143(m) of the Internal Revenue Code of
1986 (26 U.S.C. 143(m)) or regulation, or under any sale agreement.
(d) Deed restrictions. The recapture provisions shall be set forth
in a LURA or other recorded legal instrument.
Sec. 1609.9 Suspension of marketing period for sales to nonprofit
organizations and public agencies.
(a) The RTC may, for such period of time as it determines
appropriate, suspend any of the rules governing the marketing or sale
of eligible residential property set forth in this part, if during such
period the RTC negotiates the sale of any such property to a nonprofit
organization or public agency. If the property is not sold pursuant to
such negotiations, the requirements of any provisions suspended shall
apply upon termination of the suspension. Any time periods applicable
to the disposition of eligible residential property shall be tolled for
the duration of any suspension under this section.
(b) When an eligible multifamily property is ready for sale, and
prior to sending the Notice of Marketing Period to clearinghouses
pursuant to Sec. 1609.7(b)(1) of this part, the RTC shall suspend such
marketing period and offer such property exclusively to public agencies
and nonprofit organizations serving the jurisdiction or area in which
such property is located. The marketing period for direct sales to
public agencies and nonprofit organizations shall be forty-five (45)
days from the date on which the notice of marketing period is mailed by
the RTC. If the RTC receives no notices of serious interest from public
agencies or nonprofit organizations during such marketing period, then
the RTC shall offer such property to all qualifying multifamily
purchasers pursuant to Sec. 1609.7(b) of this part.
(c) Upon the sale of an eligible residential property to a
nonprofit organization or a public agency pursuant to this section,
such property and its purchaser shall be required to meet the
requirements of this part, including, with respect to sales to a public
agency, the provisions of Sec. 1609.11 of this part.
Sec. 1609.10 Reporting.
(a) Reports to Congress. The RTC shall submit to the Congress
semiannual reports regarding the disposition of eligible multifamily
property, eligible condominium property and eligible single family
property during the most recently concluded reporting period. The first
report to Congress shall be submitted not later than April 12, 1992.
Subsequent reports shall be submitted not less than every 6 months
thereafter.
(b) Reporting Period. The term ``reporting period'' means the six-
months period for which a report under this Sec. 1609.10 is made. The
first reporting period shall be the period beginning on August 9, 1989,
the date of enactment of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, and ending on December 12, 1991, the date
of the enactment of the Resolution Trust Corporation Refinancing,
Restructuring, and Improvement Act of 1991. Each successive reporting
period shall begin upon the conclusion of the preceding reporting
period.
(c) Information Regarding Properties Sold. Each report under this
Sec. 1609.10 shall contain information regarding each eligible
multifamily property, eligible condominium property and eligible single
family property sold by the RTC during the applicable reporting period,
as follows:
(1) A description of the property, the location of the property,
and the number of dwelling units in the property;
(2) The appraised value of the property;
(3) The sale price of the property;
(4) For eligible single family properties--
(i) The income and race (to the extent allowed by applicable
federal law) of the purchaser of the property, if the property is sold
to an occupying household, or is sold for resale to an occupying
household; and
(ii) Whether the property is reserved for residency by very low- or
lower-income families, if the property is sold for use as rental
property;
(5) For eligible multifamily properties, the number and percentage
of dwelling units in the property reserved for occupancy by very low-
and lower-income families;
(6) The number of eligible single family properties sold after the
expiration of the applicable marketing period for each such property;
(7) The number of eligible multifamily properties sold after the
expiration of the periods for submission of a notice of serious
interest and a bona fide offer to purchase;
(8) The number of eligible single family properties for which the
marketing period had not expired before the conclusion of the
applicable reporting period (or had not yet commenced);
(9) The number of eligible multifamily properties for which the
marketing period had not expired before the conclusion of the
applicable reporting period (or had not yet commenced); and
(10) Summary information about the total number of eligible
multifamily properties remaining subject to LURAs, the number of units
set aside for lower-income families and very low-income families in
such properties, the total number of units occupied by qualifying
lower-income and very low-income families, and the number of eligible
multifamily properties which ceased to be subject to LURAs in the
reporting period.
Sec. 1609.11 Transfer of eligible properties to State housing finance
agencies, State housing agencies and local housing agencies.
(a) Transfers to State and local housing agencies. The RTC may
transfer any eligible multifamily property, eligible condominium
property or eligible single family property to the State housing
finance agency or any other State housing agency for the State in which
the property is located or to any local housing agency in whose
jurisdiction the property is located. The transfer may be conducted by
direct sale pursuant to Sec. 1609.9 of this part, by consignment sale,
or by any other method the RTC considers appropriate. The offering,
negotiation or preparation for sale of an eligible condominium property
to a State housing finance agency or State or local housing agency does
not relieve RTC of its obligation to provide to clearinghouses the
Notice of Marketing Period required by Sec. 1609.7(c)(1) of this part
with respect to such property.
(b) Individual or bulk transfers. The RTC may transfer such
properties individually or in bulk, as agreed to by the RTC and the
State housing finance agency or State or local housing agency.
(c) Acquisition price and discount. The acquisition price paid by
the State housing finance agency or State or local housing agency for
the transferred properties shall be an amount agreed to by the RTC and
the transferee agency.
(d) Lower-income use. Any State housing finance agency or State or
local housing agency acquiring properties under this provision must
agree that it will offer to sell or transfer the properties only as
follows:
(1) Eligible single family properties--
(i) May only be sold to qualifying single family purchasers;
(ii) If sold to a qualifying single family purchaser that is a
public agency or a nonprofit organization, shall be subject to the rent
limitations set forth at Sec. 1609.7(a)(6) of this part;
(iii) Shall be subject to a LURA or other recorded instrument
containing the applicable rent, occupancy and resale restrictions, as
prescribed in Sec. 1609.7(a)(5) of this part; and
(iv) Shall be subject to recapture as provided in Sec. 1609.8 of
this part.
(2) Eligible multifamily properties--
(i) May only be sold to qualifying multifamily purchasers;
(ii) Shall be subject to the lower-income occupancy requirements
applicable to all eligible multifamily property, including the rent
limitations, requirements as to continued occupancy of current
residents and provision for financial infeasibility, all as set forth
at Sec. 1609.7(b)(4) of this part; and
(iii) Shall be sold in accordance with procedures that would give a
preference, among financially acceptable offers, to the offer that
would reserve the highest percentage of dwelling units for occupancy or
purchase by very low-income families and lower-income families and
would retain such affordability for the longest term.
(3) Eligible condominium properties shall be offered by the
particular State housing finance agency or State or local housing
agency as either eligible single family property or eligible
multifamily property and shall be subject to the requirements of
paragraph (d) (1) or (2) of this section based upon such choice.
(e) Affordability. The State housing finance agency or State or
local housing agency shall endeavor to make the properties transferred
more affordable to lower-income families based upon the extent to which
the acquisition price of a property is less than the market value of
the property.
Sec. 1609.12 RTC notice and sale of ineligible residential properties
and non-AHDP properties.
(a) To the extent practicable, within a reasonable period of time
after acquiring title to any non-AHDP property (including an ineligible
condominium property or an ineligible single family property) or to an
ineligible multifamily property, the RTC shall provide written notice
to the clearinghouses. For single family properties, the notice shall
contain the same information about the properties that the notice
required under Sec. 1609.7(a)(1)(ii) of this part contains with respect
to eligible single family properties. For multifamily properties, the
notice shall contain the same information about the properties that the
notice required under Sec. 1609.7(b)(1)(ii) of this part contains with
respect to eligible multifamily properties. For condominium properties,
the notice shall contain the same information about such properties as
the notice required under Sec. 1609.7(c)(1)(iv) of this part contains
with respect to eligible condominium properties. Each notice also shall
state that the property is not being sold or marketed through the AHDP.
With respect to a non-AHDP property (including an ineligible
condominium property or an ineligible single family property), the
notice shall state that any purchaser may purchase the property at a
sales price above the maximum value set out in Secs. 1609.2(j)(2),
1609.2(k)(2) or Sec. 1609.2(m)(2) of this part, as applicable, but only
a qualifying purchaser may purchase the property at a sales price below
such maximum value.
(b) Any person or entity may purchase a non-AHDP property for a
sales price above the maximum value set out in Secs. 1609.2(j)(2),
1609.2(k)(2) or Sec. 1609.2(m)(2) of this part, as applicable, but only
a qualifying purchaser may purchase such a property at a sales price
below such maximum value. If the RTC is unable to sell a non-AHDP
property in compliance with the requirements of the preceding sentence,
then the RTC may dispose of the property in such manner as it
determines appropriate.
By order of the Chief Executive Officer of Resolution Trust
Corporation.
Dated at Washington, DC, this 5th day of October 1994.
Resolution Trust Corporation.
John M. Buckley, Jr.,
Secretary.
[FR Doc. 94-25072 Filed 10-18-94; 8:45 am]
BILLING CODE 6714-01-M
