• Adjusts subsidized rents to market rate
• Restructures debt
• Establishes property rehab needs – current
• Provides appropriate replacement reserve
• Requires process conducted by a “PAE”
• Complements transfer of ownership
• Requires lead time – 6 Months (Est.)
• Uses standardized M2M underwriting model

Representative Engagement: HUD/OMHAR Mark-to-Market (M2M)

The Multifamily Assisted Reform and Affordability Act of 1997 directed HUD to implement a process for restructuring multifamily property loans insured by the Federal Housing Administration (FHA) that receive rent subsidies under HUD’s Section 8 program. Many of the 10,000 expiring FHA-insured Section 8 project based properties, housing 1.6 million tenants, are subsidized above market rent levels. HUD, through the Office of Affordable Housing Preservation (OAHP), awarded contracts to state and local housing authorities, foundations, and private sector contractors to conduct all tasks associated with the evaluation and debt restructure transactions. The overall objective - to ensure that Section 8 rent subsidies paid by HUD are consistent with market conditions, and that participating properties adequately serve the affordable housing goals of Congress. On December 6, 1999, Signet Partners (Signet Partners as Managing joint venture partner of Heskin/Signet Partners) was awarded a contract for turnkey responsibilities ranging from due diligence to loan restructure underwriting and owner negotiation. (HUD/OAHP; 1999-Present)