Flexible Subsidy Program
As of this date, HUD is no longer providing financial assistance under the
Flexible Subsidy Program through Notice of Funding Availability (NOFA)
publication in the Federal Register. However, through HUD's discretionary
authority funding may be authorized in certain circumstances.
Flexible Subsidy Loan: Under the Flex Program, HUD would award
approved dollar amount in Flexible Subsidy Operating Assistance Payments (OAP),
under a Financial Assistance Contract, Flexible Subsidy Program. Once the work
under the contract is completed, a Flexible Subsidy Residual Receipts Note and
Use Agreement would be executed between the owner and HUD.
The owner agrees to continue to operate the Project in according with HUD
Regulatory Agreement until the mortgage term ends or until the end of the term
of the Use Agreement.
The terms of the Flexible Subsidy Residual Receipts Note provides for payment of
principal and interest ONLY from Residual Receipts or non-project funds, and at
any time no later than the maturity of the mortgage. The loan is to be paid
in-full upon a change in ownership (except for non-profit to non-profit owners),
or prepayment of the mortgage. Simple interest accrues at the rate of one
percent per year.
Flexible Subsidy Operating Assistance Payments (OAP) is designed to fund;
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Corrections of project deficiencies existing
at the beginning of year of assistance caused by the deferral of regularly
scheduled maintenance and repairs or the failure to make necessary and
timely replacements of equipment and other components of the project.
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Capital improvement, only if it is necessary
to meet local building codes or to maintain the project in a decent, safe
and sanitary condition and it is determined that OAP is the most efficient
way of funding this improvement;
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Reserve account and operating cost deficits;
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Cost-effective energy conservation
improvements; and
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Reasonable alterations needed to make the
project accessible to people with handicaps, as required under Section 504.
Date Updated:
04/22/2010 06:19:16 AM
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