Delegated Processing is authorized under Section 2835(b) of the Housing and Economic Recovery Act of 2008 (HERA) and directs the Department to delegate review and processing of certain Section 202 Supportive Housing for the Elderly and certain Section 811 Supportive Housing for Persons with Disabilities (authorized under the Frank Melville Act of 2010) projects to selected State or local housing agencies that will serve as a Delegated Processing Agency (DPA). The delegated processing procedures will complement the Department’s capital advance processing mechanism by augmenting Field Office staff capacity. It will enhance the Department’s ability to provide timely, high quality underwriting and to maintain a steady supply of rental housing while expanding affordable housing opportunities for the elderly and persons with disabilities.
Delegated Processing can only be used where the Sponsor’s application in response to a notice of funding availability (NOFA) indicates that development funds for a proposed Section 202 or Section 811 (not including group homes or independent living projects) project will be provided by a combination of capital advance funding and any other source of funding exclusive of the Sponsor’s financial contribution. Within 30 calendar days of the date the Sponsor signs the Agreement Letter; HUD shall delegate review and processing to a State or local housing agency. However, the Secretary shall retain authority to process capital advances in cases in which no State or local housing agency has applied to provide delegated processing or no such agency has entered into an agreement with the Secretary to serve as a delegated processing agency for the selected application.
All Section 524(c) Risk Sharing Lenders are automatically approved as DPAs. A Risk Sharing Lender need only execute a Delegated Processing Agreement with HUD. Other State or local housing agencies must apply to be a DPA. Once the State or local housing agency is approved and signs the Agreement they will be referred to as a DPA. A State or local housing agency must meet all of the following criteria:
- Be in geographic proximity to the project
- Demonstrate experience and capacity for underwriting multifamily housing loans that provide housing and supportive services
- Agree to issue a firm commitment within 12 months of delegation.
Any State or local housing agency that is not an approved risk sharing lender may apply for approval under HUD Handbook 4590.1, Housing Finance Agency Risk-Sharing Pilot Program. Any State or local housing agency that only wants to be a DPA will still seek approval under Handbook 4590.1. However, since it is not seeking approval as a risk-sharing lender certain requirements of the program do not apply.
Information on Delegated Processing and becoming a DPA: