Note: WAIVERS TO CHAPTER FIVE WILL BE IN ACCORDANCE WITH RECAP POLICIES

A. Expiration of Statutory Authority: The statutory authority for the Mark-to-Market restructuring tools under MAHRA used by the Office of Recapitalization (Recap) (formerly known as OAHP expires on October 1, 2017 (“Sunset”), unless extended by statute. Prior to Sunset, owners of projects subject to an expiring Section 8 HAP contract with above-market rents and that are subject to an FHA-insured or a Secretary-held mortgage, unless exempt from Mark-to-Market debt-restructuring under section 514(h) of MAHRA, must be referred to Recap.

B. Once Eligible, Always Eligible: Per section 512(2)(C) of MAHRA, as amended, prior to Sunset, FHA-insured projects or projects with Secretary-held mortgages that had abovemarket Section 8 contract rents at the time of initial renewal under section 524 of MAHRA (on or after October 1, 1998), are eligible for referral to Recap, and the owner may request debt restructuring, even though the HAP contract was previously renewed under section 524 of MAHRA and even if current rents under the initial or subsequent MAHRA renewal contract are now at or below market. Projects must have a current, project-based Section 8 HAP contract, and an FHA-insured or HUD-held mortgage, to be eligible for Mark-to-Market.

C. Projects Previously Renewed under Section 524: FHA-insured projects and projects subject to Secretary-held mortgages previously renewed under Section 524 which did not have rents above market at the time of renewal, but which now have above market rents, are eligible for referral to Recap prior to Sunset.

D. “Preservation Projects”: The owner of a Preservation Project may request Mark-toMarket debt-restructuring any time prior to Sunset, only if the project is being transferred or sold. Upon such a request, Recap will determine whether to accept the project for M2M debt-restructuring.

E. “Exception Projects”: Exception projects, as defined in Chapter Six, (which includes Section 542(c) Risk Sharing projects), are ineligible for referral to Recap, and once identified, will not be retained by Recap for renewal. However, once the condition(s) qualifying a project as an Exception Project no longer exists, the project is eligible for referral to Recap for restructuring.