Despite concerns expressed by national and local housing finance agencies (HFA) about certain conditions of the 2018 subordination agreement, HUD is implementing these separate PRA renewal efforts to allow HFA and other interested members to vote on the form and hud in order to change a more immediate timetable. HUD`s objective is that the pra process of the subordination agreement will lead to a form widely accepted by HFA, in order to promote greater efficiency and coherence in the FTA process after multi-families, while allowing flexibility for the changes required for the hfA necessary for national or local law, as explained below. HUD accepts HFA`s request to remove the language from Section 10 (e) that would require a subordinate lender to authorize a change of ownership and take over its loan after HUD`s approval. In addition, HUD accepts HFA`s request to remove the Section 10 (f) requirement, which limits to 75% of the net proceeds the funds that the subordinate lender can obtain in the event of a transfer or sale of the property; HUD amends this requirement to remove this requirement from the MAP manual. HUD also rejects a comment that opposes Section 3 (c) (3) that limits the transfer of the subordinate note without HUD`s consent. Section 3, point c) (3), reflects HUD`s long-standing policy that surplus notes are not negotiable instruments or are transferable without HUD approval. This policy has been in place since at least 2011 and, since 2002, with the secondary funding rider applicable at the time, which was included in MAP 2002, the reason behind this policy is that HUD must be able to assess whether these transfers pose an unacceptable risk to the project. One commentator objected to the requirement of Section 10, point c), to automatically extend the term of the subordinated loan if the DHA loan is extended due to a deferral of amortization or leniency. HUD rejects this comment, as the language in question reflects the current map guideline for reserving this coverage as the insurer of the first mortgage, in order to allow maximum flexibility in troubled project situations. One commentator contradicted the language of Section 3, point c) (6), according to which the terms and conditions of the subordinate lender`s reference were applicable by HUD and could not be changed without HUD`s agreement. HUD declined to comment.
This is the default language in many final documents.