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Home » HUD Publishes Proposed Rule on Previous Participation Reviews

HUD Publishes Proposed Rule on Previous Participation Reviews

Aug 26, 2015

HUD recently released a proposed rule revising its previous participation reviews of prospective program participants seeking to take part in multifamily housing and healthcare programs administered by HUD’s Office of Housing. The proposed rule would clarify which individuals and entities will be reviewed, HUD’s purpose in conducting such review, and describe the review to be undertaken.

Currently, applicants seeking to participate in HUD’s multifamily housing and healthcare programs must certify that all principals involved in a proposed project have acted responsibly and have honored their legal, financial, and contractual obligations in their previous participation in HUD programs, in certain programs administered by the U.S. Department of Agriculture, and in projects assisted or insured by state and local government housing finance agencies. HUD’s regulations require applicants to complete a very detailed and lengthy certification form (HUD Form 2530).

The 2530 form currently requires disclosure of all principals to be involved in the proposed project, a list of projects in which those principals have previously participated or currently participate in, a detailed account of the principals’ involvement in the listed project(s), and assurances that the principals have upheld their responsibilities while participating in those programs.

Since the regulations were last revised, with the changing deal structures and transaction practices, HUD believes that the current regulations are both over-inclusive and under-inclusive, creating unnecessary burdens for participants and HUD alike. By targeting more closely the individuals and actions that would be subject to prior participation review, HUD hopes to create greater certainty and clarity to the review process. Through this rule, HUD proposes to replace the current previous participation regulations in their entirety. 

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