14.19.5 Refinancing of M2M Properties

A. HUD’s Office of Recapitalization, along with the field offices’ Asset Management staff, are responsible for reviewing any transactions that have been through an M2M restructuring. Those transactions require a waiver of the “due on sale…” clause and extension of the maturity dates of all subordinate notes originated in the restructuring. Current guidance is in Notice H 2012-10, and it explains when the field offices can process the waivers and when HQs must do it. In complex Tax Credit transactions requiring subordination of M2M debt, the owner or Lender must request the waiver as early as possible to avoid delays. FHA Production staff may also be involved to ensure that the Recapitalization Office’s conclusions are consistent with the underwriting of the project.