Summary
Before you can use residential units at a tax credit site for other purposes, significant due diligence must be performed. Part of that process involves getting prior approval from HUD. HUD can approve a conversion retroactively. But if HUD does not approve it, then HUD can impose sanctions until compliance is achieved. To get HUD approval, you will probably have to show that the conversion of the units from residential to your intended purpose will benefit the residents, and, if the conversion is to be for a commercial use, the rents charged will reflect commercial rents in the area for a similar commercial use. To request an approval, you should: 1. contact the project manager at the HUD field office, 2. discuss your plans with residents in advance, 3. prepare the initial request, 4. submit the initial request to HUD and notify residents, 5. get preliminary drawings, and 6. send the final submission to HUD. HUD's Director of Housing Management must notify you if the request is approved or disapproved.
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How to Convert Residential Unit to Another Use
You may be interested in converting some residential units at your tax credit site to another use. For example, your site might need a security office or childcare center. But before you can use residential units for other purposes, significant due diligence must be performed. And part of that process involves getting prior approval from HUD.
Even if units are vacant-and have been vacant for a while-you must follow HUD rules to properly convert them from residential to commercial use or into a nonrevenue common area, says property manager George Caruso, an expert in HUD rules.Prior Approval from HUD RequiredWhen a site is first developed or converted to HUD-assisted housing, the regulatory agreement and the initial Rent Schedule (HUD Form 92458) will indicate how many units must be used for residential purposes...See the full content of this document
(Copyright 2011)
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