| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #7469 | Closed | public | Multifamily | Les Sparks |
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At the Multifamily training last fall, it was mentioned that one of the items we should be looking for under Uniform Grant Guidance is that an entity has a conflict of interest policy in place that mimics HUD’s conflict of interest policy. (1) Where can I find HUD’s conflict of interest policy to provide to my clients? (2) Where is this requirement in the Uniform Grant Guidance – in reviewing the Federal Register for HUD, the only reference I see to Conflicts of Interest refers back to Uniform Grant Guidance and seems more generic vs. specific to HUD. Thank you! |
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From Les Sparks: This conversation has matured a bit since the Uniform Guidance was discussed last year. IN particular, UG implies that each non-Federal entity should have a conflict of interest policy. HUD has clarified that the requirement for conflict of interest does NOT apply to recipients of guaranteed loans. However, Section 8 contracts are included. Moving on from there we find that HUD is rather disjointed in its conflict of interest policies and in fact has no standard policy, unlike many other agencies. The conflict of interest rules are generally written into each program separately. For instance, multifamily loan programs have no defined “conflict of interest” policy per se, but have significant rules around identities of interest. In general, HUD’s conflict of interest policies that do exist revolve around two issues: 1) purchasing and 2) non-purchasing. Most multifamily rules revolve around IOI purchasing. The requirements are covered in Handbook 4381.5 and the Regulatory agreements specifically. Senior Housing (202 & 811) have their own rules. Here are the requirements: §891.130 Prohibited relationships. (a) Conflicts of interest. (1) Officers and Board members of either the Sponsor or the Owner (or Borrower, as applicable) may not have any financial interest in any contract with the Owner or in any firm which has a contract with the Owner. This restriction applies so long as the individual is serving on the Board and for a period of three years following resignation or final closing, whichever occurs later. (2) The following contracts between the Owner (or Borrower, as applicable) and the Sponsor or the Sponsor’s nonprofit affiliate will not constitute a conflict of interest if no more than two persons salaried by the Sponsor or management affiliate serve as nonvoting directors on the Owner’s board of directors: (b) Identity of interest. An identity of interest between the Sponsor or Owner (or Borrower, as applicable) and any development team member or between development team members is prohibited until two years after final closing. There does not appear to be any specific rules for Section 8, although, there may be something in the actual HAP contracts. There is a bunch of items for the PHA world and many examples. However, there are no examples as far as multifamily are concerned. |