In the fllwing fur sectins, this dcument prvides an verview f the RAD clsing prcess and instructins n the dcument submissin requirements fr PBV cnversins: 1) General verview f the clsing prcess; 2) Quick reference clsing dcument checklist; 3) Full checklist with detailed descriptins and infrmatin n each submissin requirement. 4) Instructins fr uplading the draft clsing package t the RAD Resurce Desk Part 1: General Overview f the Clsing Prcess fr PBV Cnversins Assignment f a RAD Clsing Crdinatr & HUD Field Cunsel Upn issuance f the RAD Cnversin Cmmitment (RCC), the RAD Clsing Crdinatr will serve as yur main pint f cntact during the clsing prcess. The RAD Clsing Crdinatr will cntact yu with instructins and will prvide yu with the name f the assigned HUD Field Cunsel. The Clsing Crdinatr will als arrange a kick-ff call with internal and external parties t discuss the clsing prcess, timelines and ther tpics as needed. Fr additinal infrmatin n the RAD clsing prcess, please see the Clsing Prcess fr RAD Public Husing Cnversins webinar n www.radresurce.net. Required Clsing Dcuments A full list f clsing dcuments is shwn in Part 2. Nt all dcuments are applicable in all clsings. Use the full checklist in Part 3 t understand what s needed fr yur specific clsing dcument submissin. Discuss any questins yu may have regarding applicability f dcuments with yur RAD Clsing Crdinatr and HUD Field Cunsel. The latest versin f HUD dcuments and templates can be fund in the Clsing sectin f the Dcument Library n the RAD Resurce Desk, www.radresurce.net/dclibrary.cfm. *NEW* Clsing Package Submissin and Review Yu must submit tw cpies f the draft clsing package, ne t yur assigned RAD Clsing Crdinatr and ne t yur assigned HUD Field Cunsel. As f September 10, 2018, all draft clsing package submissins t yur RAD Clsing Crdinatr must be upladed via www.radresurce.net. Uplad instructins can be fund in Part 4 f this dcument. Yur assigned HUD Field Cunsel will still need t receive a cpy f the draft clsing package, either via email, CD, r hardcpy. Please cntact yur assigned HUD Field Cunsel fr their submissin instructins. Only cmplete draft clsing packages will be reviewed. The draft clsing package shuld be submitted t bth parties within tw weeks f RCC issuance and n later than tw mnths fllwing RCC issuance. Failure t submit a clsing package within tw mnths will result in yur transactin being placed in Delayed Submissin status where it will be unassigned fr yur clsing crdinatr and HUD cunsel and yur RCC will be at risk f being withdrawn by HUD. Clsing Package Review Upn receipt f a cmplete clsing package, the RAD Clsing Crdinatr and HUD Field Cunsel will review, prvide cmments, and wrk with yu t finalize all required dcuments in rder t clse. Fr the purpses f RAD, the clsing date is the date f recrding. Yu will receive instructins frm yur RAD Clsing Crdinatr regarding dcuments required t be submitted after clsing as part f the final clsing dcket. Nte: FHA-RAD Clsings will fllw the existing FHA requirements and clsing prcess with the additin f a RAD Clsing Crdinatr wh will review the RAD-specific dcuments. Additinal Guidance and Requirements fr PBV RAD Cnversins Please nte that this clsing checklist nly pertains t the clsing f the RAD cnversin and that there are additinal requirements that the PHA and/r new wnership entity must fulfill as part f the cnversin frm Public Husing t Sectin 8 Prject Based Vuchers including leases, submitting 50058 End f Participatin prir t the effective date f the RAD PBV HAP cntract, etc. Please refer t RAD s Quick Reference Guide fr Prjects Cnverting t Prject-Based Vucher Assistance (PBV) which can be fund in the Dcument Library n www.radresurce.net. FDS Reprting Requirements fr all RAD Cnversins Prjects cnverting t RAD will experience a series f reprting changes based n the timing f the cnversin. Cnsult PIH- REAC PHA Financial Accunting Brief #22: FDS Reprting Requirements fr Prjects Cnverting Under RAD. A cpy can be fund in the Dcument Library n www.radresurce.net. Imprtant Reminder -fr PHAs Leaving Public Husing If this RAD cnversin represents the PHA s last remaining public husing units, cnsult PIH Ntice 2016-23 fr specific requirements and guidance fr leaving the Public Husing prgram. Page 1 f 14
Part 2: Quick Reference Clsing Dcument Checklist fr PBV RAD Cnversins N. Dcument Included 1 Clsing Cntact List Yes N 2 Fully executed RAD Cnversin Cmmitment (HUD Frm 52624) Yes N 3 Evidence f Cmpletin f RAD Cnversin Cmmitment Special Cnditins Yes N N/A 4 Request t Amend the RAD Cnversin Cmmitment Yes N N/A 5 RAD Use Agreement (HUD Frm 52625) Yes N 6 RAD PBV HAP Cntract Yes N a) Part 1 HUD Frm 52530A Part 1 & HUD Frm 52621 (cmbined), with Exhibits A-E b) Part 2: HUD Frm 52530A Part 2 & HUD Frm 52621 (cmbined) 7 Declaratin(s) f Trust/Declaratin(s) f Restrictive Cvenants and any title encumbrance and/r exceptin dcuments Yes N 8 Release(s) f Declaratin(s) f Trust and/r Declaratin(s) f Restrictive Cvenants Yes N N/A 9 Title Pr Frma and/r Title Reprt Yes N 10 Survey and Site Plans Yes N 11 Surces & Uses Yes N 12 Cnslidated Owner Certificatin Yes N 13 Certificatin and Assurances Yes N 14 Opinin f Prject Owner s Cunsel (pst-cnversin wner) Yes N N/A 15 Opinin f PHA s Cunsel Yes N N/A 16 Tenant Leases (sample) Yes N 17 RAD Delayed Cnversin Agreement (PBV) (frmerly knwn as the New Cnstructin Agreement) Yes N N/A 18 Master Lease/Tenancy Addendum Yes N N/A 19 Organizatinal Dcuments fr New Ownership Entity a) Organizatinal chart and list f key partners/principals b) Articles f Organizatin; By-Laws; Partnership Agreement (as applicable) c) Certificate f Existence, Certificate f Gd Standing, r similar dcument frm the Secretary f State prviding the legal name f the Prject Owner Yes N N/A 20 Amendments/Releases f Existing Mixed Finance Dcuments a) Terminatin f Mixed Finance Amendment t the ACC Yes N N/A b) Terminatin f Regulatry and Operating Agreement (R&O Agreement) c) Lender and PHA Subrdinatin Agreements, as applicable 21 Deed Yes N N/A 22 Grund Lease and Memrandum f Grund Lease Yes N N/A 23 Evidence f Payff, Release r Subrdinatin f Existing Debt Yes N N/A 24 Restrictive Cvenants and Land Use Restrictins Yes N N/A 25 General Depsitry Agreement (HUD Frm 51999) Yes N N/A 26 First Mrtgage Financing Dcumentatin a) Nte Yes N N/A b) Mrtgage/Deed f Trust c) Intercreditr/Subrdinatin Agreement 27 New Junir Debt Supprting Dcumentatin a) Nte Yes N N/A b) Mrtgage/Deed f Trust c) Intercreditr/Subrdinatin Agreement 28 Bnd Financing Dcumentatin a) Dcumentatin that issuance f the bnds has been authrized Yes N N/A Page 2 f 14
b) Firm Cmmitment t purchase the bnds 29 LIHTC Equity Dcumentatin Yes N N/A a) Equity Cmmitment, including the pay-in schedule b) LIHTC Reservatin Letter 30 New Cnstructin r Substantial Rehabilitatin Dcumentatin Yes N N/A a) Evidence that the General Cntractr has btained either (i) a payment and perfrmance bnd frm a prperly licensed surety; r (ii) a letter f credit b) Owner Cmpletin Guarantee Agreement 31 HUD Frm(s) 50075.1 with Budget Line Item 1504 Yes N N/A DOCUMENTS TO BE SUBMITTED IMMEDIATELY AFTER CLOSING 32 HUD Frm 50075.1 with Budget Line Item 1503 and Initial Year Funding Tl Yes N 33 Frm 50058 End f Participatin (EOP) Yes N 34 Recrded Release f Declaratin(s) f Trust/Declaratin(s) f Restrictive Cvenant Yes N and Use Agreement; fully executed HAP Cntract, Certificatin and Assurances 35 Pst Clsing Dcket Yes N Page 3 f 14
Part 3: Full Clsing Checklist fr PBV Cnversins N. Dcument Applicability Ntes and Instructins 1 RAD Clsing Cntact List Always Prvide this list t yur RAD Clsing Crdinatr as sn as pssible and n later than with the submissin f yur draft clsing package. The list shuld include full cntact infrmatin fr all parties that will be invlved in the clsing including - but nt limited t- PHA, Prject Owner, Existing Owner (if different frm the PHA r Prpsed Prject Owner), PHA cunsel, Prject Owner s Cunsel, 2 RAD Cnversin Cmmitment (RCC) HUD Frm 52624 (fully executed) 3 Evidence f Cmpletin f RAD Cnversin Cmmitment Special Cnditins Lender s Cunsel, Escrw Agent, etc. Always applicable Executin/Terminatin/Extensins: Cnversins with special cnditins listed in the RCC. Must be fully executed by authrized representatives f the PHA, Prject Owner, and Existing Owner (if different entities) within 30 days f issuance r the RCC will be terminated and must be reissued. Fr existing Mixed Finance cnversins where the PHA is nt the current wner, the PHA must still execute the RCC as an acknwledging party. Nte that the RCC expires 90 days after issuance unless extended by HUD. RCC extensin requests shuld be sent t yur assigned RAD Clsing Crdinatr in advance f expiratin. Return/Submissin f Fully Executed RCC: Uplad a cpy f the fully executed RCC within 30 days f issuance t the RAD Resurce Desk. It shuld be upladed as Item 2, Fully Executed RCC, in the Clsing Dcument Uplad sectin Changes/Amendments: N changes t the RCC language are allwed. If yu believe crrectins are needed t the HUD-executed RAD Cnversin Cmmitment please cntact yur RAD Transactin Manager and RAD Clsing Crdinatr immediately; HUD may prcess an amendment t the RCC t incrprate the crrectins applicable. The HUDexecuted RCC must still be cuntersigned within the 30-day timeframe. If terms utlined in the RCC have changed, submit a request t yur RAD Clsing Crdinatr utlining the requested changes. See item #4 in this clsing checklist fr infrmatin n submitting RCC amendment requests. HUD expects yur transactin t clse within 90 days. If an extensin is warranted, please cntact yur RAD Clsing Crdinatr. Uplad relevant dcumentatin pertaining t any Special Cnditins. Wrk with yur Clsing Crdinatr t ensure all cnditins are satisfied prir t clsing. Any certificatins can be included in the Cnslidated Owner Certificatin. Page 4 f 14
4 Requests t Amend the RAD Cnversin Cmmitment 5 RAD Use Agreement HUD Frm 52625 6 RAD PBV HAP Cntract a) Part 1 HUD Frm 52530A Part 1 & HUD Frm 52621 (cmbined), with Exhibits A-E b) Part 2: HUD Frm 52530A Part 2 & HUD Frm 52621 (cmbined) Applicable if prpsing changes t Nt required t be submitted with the draft clsing package but shuld be submitted as sn as pssible. the RCC fr crrectins r An RCC amendment may be required whenever there is a change t the RCC r its exhibits, including Surces & Uses. revisins Any changes t the Surces & Uses r financing terms require an update t the Transactin Lg n www.radresurce.net. Please discuss any requested amendments with yur RAD Clsing Crdinatr. The RCC amendment request shuld be upladed t the RAD Resurce Desk and shuld detail all requested changes and justificatins as apprpriate. Always applicable Parties: The Prject Owner and HUD are parties t the Use Agreement. If there is a grund lease, the fee wner (generally the PHA) and the Prject Owner bth execute the Use Agreement. Prepare HUD s signature blck fr the Directr, Office f Recapitalizatin. Include a Washingtn, D.C. ntary blck. Yur assigned RAD Clsing Crdinatr can prvide yu with a cpy f the apprpriate signature blck if needed. Legal Descriptin: Unless there is a transfer f assistance, the legal descriptin n the Use Agreement(s) will generally cver all prperty released frm DOT. Where assistance is being transferred t a different site, ensure that the Use Agreement encumbers the Cvered Prject (the prject that will be receiving Sectin 8 subsidy), nt the Cnverting Prject (current public husing prject). Term: Ensure that the initial term f the Use Agreement matches the apprved HAP cntract term. Lcal Recrding Requirements: The Use Agreement must cntain all frmalities required fr recrding a deed in the jurisdictin f recrdatin (i.e., ntary/acknwledgement, seal, etc.). Pririty: The RAD Use Agreement must be superir t all financing dcuments (including FHA-insured mrtgages). Partial vs Full Release: If the DOTs/DORCs are being partially released, include the wrd partially in the reference t that DOT/DORC Release in the Use Agreement; if the DOTs/DORCs are being fully released, include the wrd fully in the reference t that DOT/DORC Release. N changes t the frm are allwed (ther than changes t the signature pages t reflect state recrding requirements). Include the Cvered Prject s name Always applicable Cmpleted by PHA/Owner s Cunsel. If applicable, HUD will prvide the Rehab Assistance Payment amunt in the RCC t include in Part 2f the HAP Cntract. The HAP Cntract effective date must be the first day f either the first r secnd mnth fllwing clsing; fr example, fr a 9/3/16 clsing, the HAP cntract effective date shuld be 10/1/16 r 11/1/16. Labr Standards Addendum (HUD Frm 5679) must be attached t the HAP cntract. Page 5 f 14
7 Declaratin f Trust and any title encumbrance and/r exceptin dcuments 8 Release f the Declaratin f Trust (DOT) and/r Declaratin f Restrictive Cvenants (DORC) Always applicable Prvide a cpy f any Declaratins f Trust and/r Declaratins f Restrictive Cvenants in frce, with their recrding infrmatin, even if they are nt shwn n the Title Pr Frma. Submit any dcuments referenced in the legal descriptin fr the prject (i.e. Plat/Parcel Map, etc.) Alng with the title reprt and/r pr frma, prvide a cpy f all Unless apprved by HUD in accrdance with RAD requirements, nly prperty that is part f the Cvered Prject (the prject that will receive PBV assistance and will be cvered by the RAD Use Agreement) is eligible fr DOT/DORC Release thrugh RAD. title exceptins and encumbrances There is a HUD-apprved sample frm fund n www.radresurce.net but variatins are allwed. If all land encumbered by the DOT/DORC is nt cnverting thrugh this transactin, ensure that the title and bdy f the dcument indicate that it is a partial release. If all land encumbered by the DOT/DORC is cnverting thrugh this transactin, ensure that the title and bdy f the dcument indicate that it is a full release. If nn-dwelling buildings and/r vacant land are assciated with the Cvered Prject, the PIH Field Office must determine whether such assets may be released per the RAD Ntice. When there is a phased cnversin f a public husing prject, HUD will lk t the deal specifics t determine which prperty, if any, will be released frm the DOT/DORC. In such situatins, cnsult with HUD prir t submitting a draft clsing package. Ensure that the Release fulfills state recrding requirements. Prepare HUD s signature page fr the General Deputy Assistant Secretary fr Public and Indian Husing. Include a Washingtn, D.C. ntary blck, and a witness statement/signature line belw the signature blck. The legal descriptin shuld identically match the legal descriptin used in the title wrk. Any deviatins must be explained t the satisfactin f HUD. Page 6 f 14
9 Title Pr Frma and/r Title Reprt All prpsed recrded dcuments must be listed in prper rder. Always applicable Include a title reprt (always) and Owner s Pr Frma Plicy (if applicable) In cases where there is a transfer f assistance, title wrk must be prvided fr bth the Cnverting Prject and the Cvered Prject. The title search must search back at least t the vesting deed t the PHA. If the title wrk reveals that a Cnverting Prject is nt cvered by the apprpriate current DOT/DORC, a DOT/DORC may need t be recrded. Please cntact yur RAD Clsing Crdinatr fr further instructin. The current versins f the DOTs fr Develpment and Mdernizatin are available at http://prtal.hud.gv/hudprtal/hud?src=/prgram_ffices/ administratin/hudclips/frms/hud5. Financial Liens and use restrictins must be subrdinated t the RAD Use Agreement r released. All ther encumbrances must als be subrdinated unless HUD determines, in its sle discretin, that the encumbrance will nt negatively impact the Cvered Prject. If a title plicy will be issued, prvide a cpy f the pr frma and a cpy f the final plicy (when issued) t HUD Field Cunsel. If n new debt is prpsed as part f the RAD cnversin and n party is receiving a title plicy, a title reprt is acceptable. Ensure that the title reprt is dated within 30 days f when the HUD Field Cunsel receives the cmplete draft package. Depending n the amunt f time the deal takes t clse, HUD Field Cunsel may require an updated title reprt. The legal descriptin n the pr frma, title reprt and Use Agreement must precisely match. If this descriptin des nt match the DOT legal descriptin, sufficient evidence must be prvided fr the HUD Field Cunsel t determine (in her sle discretin), that the descriptins cver the same prperty. Dcuments may be recrded in the fllwing rder: Release f DOT/DORC (if applicable) Deed r Memrandum f Grund Lease (grund lease r mem f grund lease must cntain HUD required prvisins subrdinating t the Use Agreement) RAD Use Agreement (always applicable) Mrtgages and Use Restrictins (as applicable) RAD-FHA cnversins: The RAD Use Agreement must appear n schedule B-1 f the title plicy. Include nly the lender s pr frma in the draft clsing package unless HUD Cunsel specifically requests t als receive the title cmmitment r title reprt. Page 7 f 14
10 Survey and Site Plans Always applicable A hard cpy full-sized survey f the Cvered Prject must be included in the draft RAD clsing Package sent t the HUD Field Cunsel. If DOTs r DORCs will be released frm the Cnverting Prject, a full-sized survey must als be prvided fr the Cnverting Prject. If a recent survey is available, include a full-sized cpy in the draft clsing package submitted t HUD Field Cunsel. If a recent survey is unavailable, there is n change t the existing ftprint f buildings and n party is requiring a new survey, an ld survey may be acceptable at HUD Field Cunsel s sle discretin. Site plans are encuraged and must be submitted fr new cnstructin. If the transactin als invlves FHA financing, the Cvered Prject s survey must cmply with all FHA requirements. Discuss any cncerns regarding the survey requirements with yur HUD Field Cunsel. 11 Surces & Uses Always applicable Final executed Surces & Uses must be submitted prir t clsing. 12 Cnslidated Owner Certificatin 13 Certificatin and Assurances If the Surces & Uses are changing prir t clsing frm what s shwn in the RCC exhibit, the RCC may need t be amended. Check with yur RAD Clsing Crdinatr. Any change t the Surces & Uses r key terms requires an update t the RAD Transactin Lg As Clsed clumn n www.radresurce.net Always applicable This dcument includes required certificatins and can be tailred t include any requirements/special cnditins nted in the RCC. A draft f this dcument must be submitted fr review and apprval as part f the draft clsing package. Prir t clsing, a PDF f the fully executed certificatin must be sent t yur Clsing Crdinatr. See sample template available fr dwnlad n www.radresurce.net. The certificatin is frequently updated s please reference the latest versin psted nline. Always applicable All submitted clsing dcuments must be listed. A draft f this dcument must be submitted fr review and apprval and then executed prir t r at clsing; The executed versin must be submitted t HUD Field Cunsel within 3 days f clsing. Attach redlines t the executed versin shwing changes made t the dcuments listed since sign-ff by HUD. See sample template available fr dwnlad n www.radresurce.net. The dcument shuld reflect the fllwing recrding rder: 1. [Partial r Full] Release f Declaratin f Trust r Declaratin f Restrictive Cvenants (if applicable) 2. Deed r Memrandum f Grund Lease 3. RAD Use Agreement (always applicable) 4. Mrtgages and/r Use Restrictins (if applicable) 14 Opinin f Prject Owner s Cunsel (Pst- Cnversin Owner) Applicable if the PHA will nt retain wnership. If the PHA will nt retain cmplete, direct wnership f the Cvered Prject after cnversin, pinins are required by bth Pst- Cnversin Owner s Cunsel and PHA s Cunsel. A template cntaining HUD-required language is available n www.radresurce.net. Page 8 f 14
15 Opinin f PHA s Cunsel Applicable if the PHA will nt retain wnership. If the PHA will nt retain cmplete, direct wnership f the Cvered Prject after cnversin, pinins are required by bth Pst- Cnversin Owner s Cunsel and PHA s Cunsel. A template cntaining HUD-required language is available n www.radresurce.net. 16 Tenant Leases Always applicable Prvide the frm f lease and any addendums. 17 RAD Delayed Cnversin Agreement (PBV) (frmerly knwn as the New Cnstructin Agreement) 18 Master Lease/Tenancy Addendum Fr cnversins in which the assistance is being transferred t a new site and tenants will remain in their current units until cnstructin f the new site is cmpleted. In this scenari, a PHA may chse a Delayed Cnversin Agreement (#17) r Master Lease/Tenancy Addendum (#18). Fr cnversins in which the assistance is being transferred t a new site and tenants will remain in their current units until cnstructin f the new site is cmpleted. In this scenari, a PHA may chse a Delayed Cnversin Agreement (#17) r Master Lease/Tenancy Addendum (#18). There is n mdel lease fr the PBV prgram. The wner must prvide a written lease that meets the requirements spelled ut in 24 CFR 983.256 24 CFR. The lease must include the HUD-required tenancy addendum (HUD Frm 52530), which is available fr dwnlad n HUDCLIPS. The Huse Rules shuld be attached and must cntrl ntwithstanding any ther prvisin f the lease. A sample is available n www.radresurce.net. Must nt cntain prvisins challenging RAD s tenant rights f return and grievance prcedures. The existing public husing units will cntinue t receive public husing subsidy and remain subject t PIH requirements until cnstructin is cmplete. The PBV HAP cntract is nt executed at clsing; it is executed and becmes effective at the time that tenants transfer t the new site. The PHA/Owner shuld still submit a cpy f the RAD PBVHAP Cntract and all exhibits fr review as part f the draft clsing package (as exhibits t the Delayed Cnversin Agreement). Althugh the HAP cntract is nt executed at clsing, the RAD Use Agreement is recrded against the Cvered Prject at clsing. The Cnverting Prject s DOTs are nt released. The required Delayed Cnversin Agreement template is available n www.radresurce.net. In transactins invlving new cnstructin and a transfer f assistance, if residents are remaining in the Cnverting Prject until the Cvered Prject is cnstructed, the parties may elect t enter int a Master Lease between the PHA and Prject Owner fr leasing the Cnverting Prject. (The ther ptin fr this scenari is executin f a Delayed Cnversin Agreement see abve) Under the Master Lease, the RAD cnversin ccurs at clsing, the Cnverting Prject s dwelling units are remved frm PIC at clsing and a HAP cntract is entered int at the time f clsing. Thrugh the Master Lease, the Prject Owner leases the tenants units frm the PHA and then subleases the units t the tenants (wh are nw Sectin 8 tenants). There is a HUD-apprved Master Lease template. A Tenancy Addendum may be used in lieu f a Master Lease. The PHA shuld be aware f the limitatins n the use f federal funds created by use f the Master Lease structure. Fr example, if there is an indemnificatin prvisin, the PHA cannt use federal funds t fulfill thse bligatins. Page 9 f 14
19 Organizatinal Dcuments fr New Ownership Entity a) Organizatinal chart & List f Key Partners/Principals b) Articles f Organizatin; By-Laws; Partnership Agreement (as applicable) c) Certificate f Existence, Certificate f Gd Standing, r similar dcument frm the Secretary f State prviding the legal name f the Prject Owner. 20 Amendments/Releases f Existing Mixed Finance Dcuments (if applicable) a) Release f Declaratin f Restrictive Cvenants (DORC) b) Terminatin f Mixed Finance Amendment t the ACC c) Terminatin f Regulatry and Operating Agreement (R & O Agreement) d) Lender and PHA Subrdinatin Agreements (if applicable) Required when the Cvered Prject Owner is nt the PHA; even if the PHA is transferring wnership t an instrumentality, the instrumentality s wnership dcuments must be prvided. Applicable where the Cnverting Prject is an existing Mixed Finance Prject. 21 Deed Applicable if title t the prperty is being cnveyed. The entity must be validly frmed and its term f existence must be at least as lng as the HAP cntract. With the exceptin f LIHTC deals, the rganizatinal dcuments must establish PHA r nn-prfit wnership/cntrl. This statutry requirement is satisfied if: The PHA is retaining wnership f the prject. The Prject Owner is an entity in which the PHA is the sle wner r member. The Prject Owner is rganized as a nnprfit entity (it need nt be a 501(c)(3) entity). In LIHTC deals, PHA cntrl may be established thrugh the wner s rganizatinal dcuments r the grund lease. If cntrl is established thrugh the rganizatinal structure, use the HUD required prvisins. (Nte: these prvisins are distinct frm the prvisins that must be included in the rganizatinal dcuments fr FHA deals) If cntrl is established thrugh a grund lease, the grund lease must cntain the grund lease cntrl prvisins available n the RAD Resurce Desk. Discuss any prpsed alternative methd f establishing PHA cntrl with HUD Field Cunsel prir t submissin f a draft clsing package. Fr DORC Releases, fllw the prcedure and requirements discussed abve fr DOT Releases. The Terminatin f the Mixed Finance Amendment t the ACC is signed by the apprpriate PIH Field Office. Once the draft dcuments have been deemed legally acceptable, yur RAD Clsing Crdinatr will wrk with the PIH Field Office t btain the apprpriate signature. If there is a partial cnversin f a Mixed Finance Prject, with sme f the prject s units remaining as public husing, the MF Amendment is nt terminated; instead, an amendment must be prepared in HQ s Office f Public Husing Investments. Terminatin f the ACC Amendment and Terminatin f the R & O Agreement are psted t www.radresurce.net. When the deed cnveys fee simple t the Cvered Prject Owner, it can cntain n reversinary clauses, cnditins subsequent r similar prvisins; the deed must be fr fee simple unless the PHA is grund leasing the land t the Cvered Prject Owner and simply deeding the imprvements. The deed cannt be a Quitclaim Deed. The legal descriptin must match the title plicy/title reprt and RAD Use Agreement. Page 10 f 14
22 Grund Lease and Memrandum f Grund Lease 23 Evidence f Payff, Release r Subrdinatin f Existing Debt 24 Restrictive Cvenants and Land Use Restrictins 25 General Depsitry Agreement - GDA (Frm 51999) Latest versin f GDA frm is dated 10/2014 Applicable if the prperty will be subject t a grund lease. Required if there is an existing EPC, CFFP, OFFP, r ther frm f debt that will be paid ff r subrdinated at clsing. Applicable in all deals with land restrictins Required if Public Husing funds are being used as a surce f funds and nt being disbursed t Prject Owner fr an apprved use at clsing. If the Grund Lease is nt recrded, submit bth the Grund Lease and a Mem f Grund Lease. Use the HUD-required prvisins. The legal descriptin must match the title plicy/title reprt and RAD Use Agreement. The Grund Lease must be subrdinated t the RAD Use Agreement in accrdance with HUD requirements. In deals where the Cvered Prject is already cvered by a grund lease, the lease must be amended t include the HUD-required prvisins unless therwise apprved by HUD. The lease term must be at least as lng as the HAP cntract. Prvide evidence that the existing debt has been r will be paid ff in cnjunctin with RAD clsing. Existing debt being paid ff in cnjunctin with the RAD clsing shuld be shwn n the Surces & Uses. If existing debt is nt being paid ff at r prir t clsing, the debt must be subrdinated t the RAD Use Agreement in cnfrmance with HUD guidance. See the HUD-apprved Subrdinatin Agreement frm n www.radresurce.net. Restrictins must be subrdinate t the RAD Use Agreement Fr nn-fha transactins, use the HUD-apprved RAD Subrdinatin Agreement r ensure that the substantive prvisins f the template are included in the Restrictive Cvenants dcument. Restrictins cannt impact the right f tenants t remain in r return t the prperty after cnversin Fr FHA transactins, use the FHA Subrdinatin Agreement r ther apprpriate frm per FHA requirements Cnsult yur RAD Clsing Crdinatr fr specific guidance and requirements. Public Husing funds used in the transactin must be shwn n the Surces and Uses and are subject t a GDA until they are disbursed fr the apprved use. Once disbursed, the funds need nt be subject t a GDA. Once the funds are transferred frm an accunt held by the PHA t an accunt held by the Prject Owner, such funds are cnsidered disbursed fr purpses f whether a GDA is required. Until disbursed, public husing funds t be used in the transactin must be held in a segregated accunt r sub-accunt. If such accunt is already subject t a GDA, n new GDA is required. If a new GDA is required, n changes t the HUD frm are permitted. N changes t the HUD frm are permitted, ther than thse allwed fr in the frm itself. Nt required fr transactins with FHA financing. Fllw FHA guidelines. Page 11 f 14
26 First Mrtgage Financing Dcumentatin: a) Nte b) Mrtgage/Deed f Trust c) Intercreditr / Subrdinatin Agreement 27 New Junir Debt Supprting Dcumentatin a) Nte b) Mrtgage/Deed f Trust c) Intercreditr / Subrdinatin Agreement 28 Bnd Financing Dcumentatin a) Dcumentatin that issuance f the bnds has been authrized b) Firm Cmmitment t purchase the bnds 29 LIHTC Equity Dcumentatin a) Equity Cmmitment, including the pay-in schedule b) LIHTC Reservatin Letter 30 New Cnstructin r Substantial Rehabilitatin Dcumentatin a) Evidence that the General Cntractr has btained either (i) a payment and perfrmance bnd frm a prperly licensed surety r (ii) a letter f credit b) Owner Cmpletin Guarantee Agreement Required fr all cnversins btaining first mrtgage financing. Required fr all cnversins with secndary financing r junir debt previusly apprved in the RAD Financing Plan. Required fr all cnversins utilizing bnd financing Required fr all cnversins invlving tax credits. New Cnstructin r Substantial Rehabilitatin nly. New financing dcuments must be recrded after and explicitly subrdinated t the RAD Use Agreement Fr nn-fha transactins, use the HUD-apprved RAD Subrdinatin Agreement r ensure the substantive prvisins f the template are included in the apprpriate debt dcuments. In FHA-RAD deals: Use the apprpriate frm f HUD-apprved subrdinatin agreement r rider fr FHA transactins. The RAD Use Agreement shall be recrded befre the HUD-insured mrtgage. In FHA-RAD deals, all financing must cmply with all FHA requirements. If financing terms have changed since RCC issuance, submit revisins t the RAD Clsing Crdinatr fr HUD review and then update the RAD Resurce Desk Transactin Lg nce the financing changes have been apprved. If financing terms have changed since RCC issuance, submit revisins t the RAD Clsing Crdinatr fr HUD review and then update the RAD Resurce Desk Transactin Lg nce the financing changes have been apprved. Aside frm the Nte, Mrtgage/Deed f Trust, and Intercreditr/Subrdinatin Agreement, n additinal dcumentatin is needed t be submitted in the draft clsing package. If financing terms have changed since RCC issuance, submit revisins t the RAD Clsing Crdinatr fr HUD review and then update the RAD Resurce Desk Transactin Lg nce the financing changes have been apprved. Aside frm the dcumentatin regarding issuance and the firm cmmitment, n additinal dcumentatin is needed t be submitted in the draft clsing package. If financing terms have changed since RCC issuance, submit revisins t the RAD Clsing Crdinatr fr HUD review and then update the RAD Resurce Desk Transactin Lg nce the financing changes have been apprved. Aside frm the reservatin letter and equity cmmitment, n additinal dcumentatin is needed t be submitted in the draft clsing package. Page 12 f 14
31 HUD Frm(s) 50075.1 with Budget Line Item 1504 32 HUD Frm 50075.1 with Budget Line Item 1503 and Initial Year Funding Tl(s) 33 Frm 50058 End f Participatin (EOP) 34 Recrded Release f Declaratin f Trust, Use Agreement, and HAP Cntract (cpies) Required n all cnversins that use Required befre Clsing as sn as a final Surces and Uses is available. PH Capital Funds in the develpment budget Submit t yur Clsing Crdinatr the HUD Frm(s) 50075.1 with BLI 1504 manually added that matches the amunt f Capital Funds listed as a surce in the final executed Surces and Uses. This is t ensure that the Capital Funds used in the Develpment budget will be available at clsing. Nte that nly prir year Capital Funds can be utilized in this manner and yu must submit ne frm per Capital Fund grant year. Please see RAD Initial Year Funding Prcess Instructins n the Resurce Desk fr further infrmatin. IMMEDIATELY AFTER CLOSING- ADDITIONAL REQUIRED STEPS Required n all cnversins Required n all cnversins unless there is a Delayed Cnversin Agreement; cntact the Clsing Crdinatr fr applicability. Required n all cnversins 35 Pst-Clsing Dcket Required n all cnversins 36 Reminder PIH Clse Out and FDS Reprting Requirements fr RAD Prjects Required n all cnversins Required immediately after Clsing in rder t access the final public husing subsidy frm Capital Funds that will be available fr the cnverted prperty fr the remainder f the calendar year in which a HAP cntract becmes effective Cmplete the HUD Frm 50075.1 with BLI 1503 manually entered Cmplete the Initial Year Funding Tl(s) with the crrect HAP effective date Send t yur Clsing Crdinatr within 3 business days f recrding. Operating funds are nt t be included n the 50075.1. Please see RAD Initial Year Funding Prcess Instructins and the RAD Initial Year Funding Tl n the Resurce Desk fr further infrmatin. Required within 5 business days after Clsing. Prvide cnfirmatin via email t the Clsing Crdinatr that Frm-50058 EOP has been submitted. In rder fr HUD t remve the applicable units frm the Public Husing Infrmatin Center (PIC), a Frm-50058 End f Participatin (EOP) fr the public husing prgram fr all residents still living at the prperty at RAD cnversin must be submitted int PIC. The 50058 EOP must be effective fr each resident n the last day f the mnth befre the new HAP will be effective. Fr example, a prperty that will have an Octber 1 HAP effective date shuld submit EOPs effective September 30 fr all residents still living at the prperty. A PDF f the recrded Release f Declaratin f Trust, Use Agreement, HAP cntract, final executed Surces & Uses and any ther dcuments identified by HUD must be submitted via email t the Clsing Crdinatr within 3 business days after recrding. HUD requests that Pst-Clsing Dckets be submitted within 30 days f Clsing. See the Pst Clsing Instructins n www.radresurce.net fr details Prjects cnverting t RAD will experience a series f reprting changes based n the timing f the cnversin. Please see PIH-REAC PHA Financing Accunting Brief #2: FDS Reprting Requirements fr Prjects Cnverting Under RAD. A cpy can be fund in the Dcumen Library n www.radresurce.net. PHAs wh are cnverting their last remaining Public Husing units will need t wrk with their PIH Field Office n clsing ut f Public Husing. Please cnsult PIH Ntice 2016-23 Page 13 f 14
Part 4: Instructins fr Uplading the Draft Clsing Package t RAD Resurce Desk The draft clsing package submitted t yur RAD Clsing Crdinatr must be upladed t www.radresurce.net. Nte that yur assigned HUD Field Cunsel must receive a cpy f the same draft clsing package per his r her instructins (email, CD, hardcpy, etc). Cnsult yur HUD Field Cunsel fr his r her submissin preferences. 1. Lgin t www.radresurce.net. Nte that yu will need uplad access in rder t uplad dcuments. 2. Navigate t the My Prperties with CHAPs Issued card and click n the prperty name. It s status shuld say RCC Issued. 3. The clsing page will pen. Use the G T navigatin ptin in the menu at the tp and select Clsing Dcument Uplad OR scrll dwn the page until yu see the green heading that says Clsing Dcument Uplad PBV. 4. The grid is aligned t the PBV Clsing Checklist. Uplad each item shwn n the grid using the Brwse and Uplad buttns. Fr any items that are nt applicable t yur clsing, select N/A. Yu can input cmments that yu d like yur RAD Clsing Crdinatr t see in the PHA/Owner Cmments field. Yu must click Save fr Later (lcated at the bttm f the page) fr yur cmments t save. 5. If yu have upladed ALL f the applicable dcuments and are ready t ntify yur RAD Clsing Crdinatr that the package is ready fr his r her review, click the red buttn that says Submit Clsing Package. If yu are nt ready t make the submissin yet and wish t cntinue wrking n it, click Save fr Later. 6. Email resurcedesk@radresurce.net with any uplad questins r issues. Page 14 f 14