HUD Increases Frequency of the Distribution of Surplus Cash for Non-Assisted HUD Insured Properties

In Mortgagee Letter 2022-16, HUD outlined the dramatic increase in surplus cash distributions. This eliminates the semi-annual distribution that was in place for many decades and is available for loans endorsed after the effective date of the Mortgagee Letter (September 7). Monthly distributions are now available to eligible multifamily projects:

• REAC score must be above 80, with no score below 60 for the previous three fiscal years;

• Must meet minimum debt service coverage ratio (DSCR); and

• Section 8 Projects are excluded.

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