FOR YOUR INFORMATION
I consult with owners and managers on the full range of 515 issues: appraisal issues; appeals related to OIG audits; Workout Plans; appeals of adverse RHS decisions; issues with the Agency; and prepayments and equity loans.
I have the following comments on the program:
3560. REGULATION and HANDBOOKS. There are inconsistencies as well as issues needing clarification. As it should, the Agency has plans to clean them up. The big question is when.
FRANCONIA ASSOCIATES: Stay tuned for Game Two because Jeff Eckland won Game One of the series. The Agency is not a happy camper.
ADMINISTRATION. At the Portland, Oregon training in April, the “Policy Goals of the Administration” included:
— “prevent large rent increases”
— “align owner’s interests with tenant’s interests”
— “lower the cost of rural rental
housing to meet President’s Budget goals.”
It is not clear how 3560 will achieve these.
MANAGEMENT FEES: The Agency has created turmoil over the 3560 provision that:
Periodically, the Agency will develop a range of base per occupied unit fees that will be paid in each state. The Agency will develop the fees based on a review of housing industry data. The final base for occupied unit fees for each state will be made available to all borrowers.
The process is less than transparent.
TRANSFER APPRAISALS. Requiring appraisals at the buyer’s expense for all transfers adds complexity and time to an already cumbersome process.
RESERVE POLICIES. If the Agency denies Reserve requests for capital items such as ranges and refrigerators, then the Reserves will suddenly become more than adequate to address the only “real” capital needs of roofing, exterior painting, and paving. This becomes an exercise in rearranging deck chairs.
FORECAST. HUD went through a period of litigation to set out the relationships with owners and managers. RHS is entering into its own phase.
In a July 9, 2005 New York Times story by Danny Hakim, Robert A. Lutz, General Motors' vice chairman and product development chief, said:
“Is the customer going to credit us for our (design) criteria? Apparently not, when you look at what’s happening.
“It was tough at G.M. because we are so process-focussed. And there is a belief, or there was, that you have to keep focussing, focussing, focussing on the process, do every step right and the end result will be right. Well, unfortunately, it doesn’t work in art.”
The moral seems to be that the Hotel California needs a better marketing department.