HUD Form 2530 and APPS
HUD Form 2530 details a borrower/principal’s past participation in any HUD multifamily projects, as well as any participation involving other housing agencies.
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What Is HUD Form 2530?
During the HUD multifamily lending process, borrowers must submit a range of paperwork — some relatively simple, some far more complicated — in order to be approved. One of the most important parts of this process is the submission of HUD Form 2530, also known as the Previous Participation Certification.
This form documents an individual and organization’s past participation in any HUD or FHA-insured multifamily projects, as well as those involving other housing agencies. The Department of Housing and Urban Development uses this form to assess whether or not a potential borrower is eligible based on previous actions and behaviors in the sector.
Active Partners Performance System
While there is still a specific form that potential borrowers can complete, HUD has an online tool to streamline this process. Known as the Active Partners Performance System, or APPS, this platform — introduced in 2006 — effectively replaces the use of Form 2530 with a one-stop shop for borrowers to submit details and for HUD to review and approve (or reject) those submissions.
While the form requests in-depth details about a borrower’s previous involvement with HUD-backed loans, the good news is that first-time users are generally only required to provide minimal information to register with the system and create a standard profile.
When Is Form 2530 Required?
The form must be completed for nearly every situation involving an individual or company taking an active role in a HUD project. While an exhaustive list can be found on the third page of the form itself, some of the more common situations requiring a Form 2530 submission include:
Projects seeking FHA-insured financing
Projects where 20% or more of the units will be subsidized
Acquisition of an asset with subject to HUD-insured financing
A proposed change in role for an approved project’s participants
The addition of a principal to a project
Some groups and individuals are typically exempt from filing, however. Public housing agencies, residents of a project, owners of fewer than five units, and those who inherited a HUD-financed asset typically need not submit this data.
Filling Out the Form
Completing the form through the APPS platform is fairly straightforward. A borrower or principal will need to either list themselves as an individual or organization (in most cases, both), along with relevant personal data including contact information. Additionally, HUD requires the disclosure of any involvement or participation in a HUD/FHA, state, or local housing agency in the past 10 years. This also includes details from management ratings to physical inspection scores. The principals and other parties will also need to describe the project they are involved with along with, detailing ownership information (usually by percentage share).
Once submitted and approved, the APPS platform enables users to adjust data about an ongoing or existing project. For example, if a new partner or management company becomes involved in the operations or ownership structure of the property, those roles can be updated within the system. All changes must be listed, but only larger adjustments are subject to HUD review. These larger changes include:
Changes to a limited partner, general partner, or managing general partner
Changes in an LP or member’s ownership share to more than 25% of the borrower entity
An increase in a regular shareholder’s ownership to more than 10% of the entity
Approvals and Denials
Once your information is submitted, HUD will review and make a determination to approve or deny the submission. Note that any approval is only an acceptance of the suitability of a borrower, not any indication of approval for the project itself.
If any of the individuals or organizations are flagged for noncompliance by HUD, your Form 2530 submission may be denied, withheld, or granted subject to conditions. HUD will contact you to inform you of the decision — so keep your contact information up to date in APPS.
If you receive notification that your submission was not approved, you may request that the HUD Review Committee reevaluate your application or ask for a hearing with a designated hearing officer. This request must be done within 30 days of HUD’s notice of determination. Once this process has concluded, you will be informed of the final ruling via mail.
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