10.8 Approval of Proposed Management Agent

A. The Lender will recommend approval to the Hub Satellite office of the proposed agent if the agent has demonstrated capacity to effectively manage the property within HUD requirements, the Management Agent has shown adequate fidelity bond coverage and the Previous Participation Certification is approved. In some instances, the Lender may find it necessary to recommend conditional approval if there are areas of the agent’s procedures that are considered weak or that need to be changed. All conditional approvals will be discussed with the proposed agent and any agreements/conditions that are imposed will be shown both in the letter approving the agent, and in the Firm Commitment.

B. The Lender must provide a report regarding its review and recommendation which includes the following information:

1. Name of the proposed Management Agent.

2. Composition of the proposed Management Agent.

3. Narrative of the agent’s experience and capacity to operate the subject property, with particular emphasis on its past experience and capacity to manage affordable or subsidized properties, if applicable.

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Chapter 10 Management Analysis 10.9 Affirmative Fair Housing Marketing

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4. Demonstration that adequate fidelity bond coverage is in effect and that the proposed management agreement meets HUD’s requirements.

5. A recommendation to approve the proposed Management Agent.

C. The Hub/Satellite office may disapprove a proposed Management Agent based on the decision of the Review Committee to deny or withhold approval for the proposed agent’s participation. The Committee may base its disapproval on the lack of the Management Agent’s capacity to effectively manage the project within HUD requirements and to adequately meet the requirements of this Chapter. To proceed with a Firm Commitment review, the owner must then propose an alternative Management Agent (and supply all required documentation). The owner may appeal the decision of the Previous Participation Committee under 24 CFR, Part 200.222.

D. HUD will review the Lender’s report and the management entity profile and make the final determination to accept or reject the proposed Management Agent.