CARHA Publication of

the Council for Affordable

and Rural Housing

news

In this issue:

Annual Meeting Recap

Counsels’ Corners—Regulation Round-Up

Prepayment Updates

CARH Testifies on RuralHousing Issues

Preferred Buyer Plus—Q&A on APisp

Mailbox Retrofitting

Technohelper

2003

Aug

July

June

May

Apr

Mar

4%Credit

3.35%

3.33%

3.38%

3.40%

3.37%

3.40%

9%Credit

7.82%

7.78%

7.89%

7.92%

7.87%

7.93%

Up to the moment tax credit percentages always available atwww.carh.org

‒

From Sunday, June 8 to Tuesday, June 10,

2003 more than 100 CARH members and

guests attended CARH’s annual meeting and

legislative conference. The meeting again took

place at the Ritz Carlton, Pentagon City, which is

just a few short metro stops from both Capitol

Hill and the federal agencies that CARH works

with on affordable housing issues. Meeting par-

ticipants noted that this year’s conference provided

attendees with information and developments as

they became news. Several days prior to the

beginning of the conference, the long awaited

rewrite of the regulations governing the Rural

Housing Service’s (RHS) multifamily programs

were issued. The “3560 regulation” was issued

in proposed form in the Federal Register. The

agency gave the public 60 days, or August 1,

2003 to comment on the proposed regulation.

A special review committee met during the

annual meeting and legislative conference.

This committee has again met and had phone

conversations in an effort to formulate CARH’s

formal comments.

The conference opened the morning of

Sunday, June 8, with concurrent committee

meetings. As indicated, a special 3560 review

committee met to lay the groundwork for

CARH’s formal response to the proposed regula-

tions. This committee met all day, divided the

regulations into subject matters, thus leading to

the formation of subcommittees and the

appointment of subcommittee leaders. It was

agreed that a follow-up two day meeting would

be held in Washington in July.

The state associations committee co-chaired

by Joe Diehl, Executive Director of the Washington

CARH and Arrice Faught, Executive Director of

the Alabama CARH, was a lively and informative

meeting. Continued efforts of this committee

are fostering new associations throughout the

country and providing start-up assistance to

new groups. This technical assistance would

be in the form of providing help to groups as

they plan their first meeting, assisting groups in

formulating long-range plans for membership

development and recommending staffing needs

for the association.

At the same time as the state associations

committee met, the housing authority

committee met. This committee was chaired

by Norm McLoughlin, from the Kitsap County

Consolidated Housing Authority in Washington

State. While a myriad of issues were discussed

during this committee, two issues took top

billing. It was the committee’s recommendation

to CARH’s board of directors that CARH:

1. Oppose the administration’s proposal to

block grant the Section 8 program, and

CARH’s 2003 Annual Meeting and LegislativeConference—One for the History BooksBy Colleen M. Fisher, Executive Director

Tax CreditPercentages

See “ANNUAL MEETING” on page 2

Representative Mike Ross (D-AK) at CARH’s2003 Annual Meeting and LegislativeConference closing luncheon.

2. Support efforts on the part of HUD’s

Office of Multifamily Housing Assistance

Restructuring (OMHAR) to provide tech-

nical assistance to RHS in their efforts to

preserve the agency’s aging portfolio.

(CARH’s board of directors in a meeting

later in the day adopted both of these

recommendations.)

Attendees then had a choice between the

education and owners committee. At the edu-

cation committee, discussion centered on the

possibility of conducting some of CARH’s cur-

rent and future education programs via the

Internet. This would assist employees from

properties that have limited training funds to

participate in CARH’s education courses at

minimal costs since they would not incur travel

costs. After the education committee was

adjourned, CARH’s certification committee

met and reviewed applications submitted by

individuals for CARH’s Rural Affordable

Housing Professional (RAHP) and Rural

Affordable Housing Executive (RAHE)

designations. (See related education article

on page 5.)

The owners committee also had many

issues on the agenda. Attendees were updat-

ed on the status of CARH’s aging portfolio

position paper. Jim Poehlman and Mike Sivia,

co-chairs of the aging portfolio committee,

told attendees that since the release of the

paper in March, key members of Congress,

other housing related trade associations, and

government agencies had received copies of

the paper. The reaction of those groups to the

paper had been very positive. It was recom-

mended that all of the state housing finance

agencies as well as the Federal Home Loan

Banks throughout the country should be sent

copies of the paper. It was also the recom-

mendation of the committee that of the issues

outlined in the paper, CARH should work first

to restructure the RHS so that the state direc-

tors report to the RHS Administrator for

housing-related issues.

Other issues discussed included the pend-

ing “takings lawsuit” that would be argued in

Des Moines, Iowa at the end of June (this case

is a result of the Supreme Court decision last

year, which remanded Franconia Associates

et al., back to a lower court); supporting state

efforts to oppose legislation that is being con-

sidered by various state legislatures that would

restrict prepayment rights for owners of state

and federal affordable housing programs; and

pressing for legislation which would provide

exit tax relief for owners.

The committee was also brought up to

date on a recent letter sent by CARH to the

national RHS office requesting appraisals be

released to borrowers. Several district offices

had refused to release appraisals. The national

office has indicated that a letter will be forth-

coming that will direct the release of such

appraisals. In addition, an Administrative

Notice (AN) will also be issued on the subject.

Finally, the committee recommended that

CARH should examine the possibility of hold-

ing a series of seminars for owners on tools

for prepayment.

The official kick-off for the meeting was

the opening luncheon. In addition to recogniz-

ing the vendors exhibiting at the meeting, the

nominating committee, chaired by Bob Yoder,

CARH’s chairman of the board, presented the

recommended slate of candidates for execu-

tive officers. The recommended 2003–2004

executive officers were: Betty Bridges,

President; Bob Rice, Vice President; Bill

Shumaker, Secretary; Mitch Copman,

Treasurer; Bob Yoder, Chairman of the

Board; and Ray Huff, Immediate Past

President. (Bruce Baird, Belmont

Management, who had served as CARH’s

Secretary for the past five years, decided that

due to business commitments, he did not wish

to serve another term as Secretary. Bruce

was honored for his commitment to the

association later in the day.) The nominating

committee also recommended in addition to

the existing board two individuals to fill

vacancies. These two additional individuals

were Kenyon Salo, SK Companies located

in New Ipswich, New Hampshire and

Rodney Dudley, Intervest Development

Corporation located in Madison,

Mississippi. The nominating committee’s

recommended slate of candidates for

executive officers and board of directors

was approved by the members present at

the luncheon.

The formal committee meetings ended

with the development committee. (While

scheduled to meet, the management commit-

tee decided not to meet as a majority of

management issues were being addressed by

the “3560 Review Committee.”) The develop-

ment committee reviewed provisions in the tax

bill recently signed into law by President Bush.

Other tax issues such as legislation that would

allow for the use of higher area median

income or statewide income for the purpose

of determining Low Income Housing Tax

Credit (LIHTC) application income limits was

also discussed. It was the recommendation

of the development committee that CARH

emphasize other federal programs that would

help in the development of more affordable

rural housing throughout the country. These

programs include but are not limited to

the Department of Housing and Urban

Development’s (HUD) HOME and CDBG pro-

grams. (This recommendation was presented

to and approved by the board of directors

meeting that followed this development

committee meeting.)

Annual Meeting continued from page 1

CARH Members at George Washington’s Mount Vernon estate, site of the opening reception forCARH’s annual meeting.

CARH’s board of directors met following all

of the formal committee meetings. Committee

reports were given by all of the committees.

The board approved all of the recommenda-

tions previously noted in this article. It was

agreed that the fall board of directors meeting

would be held on October 19 with meetings

with officials from the RHS and HUD on

October 20. This meeting will be held at the

Ritz Carlton, Pentagon City in Arlington,

Virginia. As with all board of directors meet-

ings, CARH members not on the board are

welcome to attend. Please contact CARH’s

national office staff for hotel information

regarding this meeting.

One more meeting event of the day greet-

ed attendees. “News from Washington—

CARH’s Perspective” featured Colleen M.

Fisher, CARH’s Executive Director and Richard

M. Price, Esq., Nixon Peabody, LLP, and CARH’s

General Counsel. Richard updated attendees

to this session with the latest developments on

tax related legislation. The recent tax legisla-

tion that was signed by the President did not

contain the elimination of the double taxation

of corporate dividends. The proposal was

supported by the administration and would

have negatively impacted investment in the

LIHTC program. Investment in rural housing

would have been particularly hard hit had the

proposal been enacted. Richard also discussed

the various lawsuits impacting owners’ prepay-

ment rights. Colleen discussed the status of

appropriations bills for HUD and RHS. CARH’s

policy statement was also reviewed at this

time. Attendees were encouraged to visit their

members of Congress and staff during the

two days of the meeting. Copies of the full

policy statement as well a summary of the

statement were contained in each of the

attendees’ meeting handbooks. Additional

copies of both statements were available at

the CARH registration table.

After a full day of sessions, attendees

were ready to relax and enjoy some history.

CARH’s opening reception was held at George

Washington’s Mount Vernon estate. The

evening began at the Mount Vernon Inn

Restaurant where attendees were treated to a

reception featuring cuisine that mirrored what

George and Martha Washington would have

served guests who visited them while at

Mount Vernon. The weather could not have

been better. A sense of quiet and serenity

enveloped the estate. The private tour of the

mansion was led by docents who took atten-

dees through the elegant candlelit mansion.

Stories about the owners were told as were

vignettes about guests who visited the

Washingtons’ home. The rarely-seen third

floor was no doubt a highlight of the tour.

Attendees also had the opportunity to visit the

outbuildings as well as the elegant gardens

that adorn the estate. While this year’s tour

was unique, CARH members will not want

to miss next year’s annual meeting opening

reception—it will be held at the world

famous International Spy Museum in

Washington, D.C.!

Another full day of sessions and news

greeted attendees on Monday, June 9. The

first event of the day featured Roberta

Youmans, democratic staff of the House

Financial Services Committee and Bill

Simpson, democratic

staff of the Senate

Appropriations

Committee. Roberta

and Bill gave their views

regarding their respective

committees’ agendas

on rural housing during

the first session of the

108th Congress. Roberta

reported that the

House Financial Services

Committee would be

holding a hearing on

rural housing issues in

the next several weeks.

This will be the first

comprehensive hearing on rural housing pro-

grams that the committee has held in many

years. (CARH was asked to testify at this hear-

ing. See related story on CARH’s testimony on

page 16 of this issue of CARH News.) Bill

indicated that the Senate Appropriations

Committee was very concerned over the RHS’s

Rental Assistance (RA) program and had asked

the General Accounting Office (GAO) to con-

duct a study on the program, particularly the

reference of the agency to unused RA. He did

indicate that members on the democratic side

of the committee were supportive of adding

additional funding for the Section 515 pro-

gram so that new construction funding would

be available in Fiscal Year 2004.

The “Nitty-Gritty with the Rural Housing

Service (RHS), Department of Housing and

Urban Development (HUD) and the Federal

Housing Finance Board” session featured

Thomas Dorr, Under Secretary Rural

Development at USDA; Mike McCullough,

Director, Office of Multifamily Housing

Development at HUD; and Lynn Brazen, Vice

President and Community Investment Officer,

Federal Home Loan Bank of Atlanta.

During this session all three speakers dis-

cussed programs impacting the rural housing

industry. Of particular interest was the discus-

sion by Mike McCullough regarding HUD’s

multifamily mortgage insurance program and

the development of a program that would

provide funds for small complexes, such as

those built in rural areas across the country.

Lynn Brazen also discussed the Federal Home

Loan Banks’ affordable housing programs and

how funds can be leveraged with other state

and federal programs.

After a break that allowed attendees

to talk to exhibitors and view products, atten-

dees were given the opportunity to choose

between sessions. “On the Money: Specialized

Financing Options for Rural Housing” featured

Sally Digges, Neighborhood Reinvestment

Corporation; Bill Hale, Portage Area

Development Corporation; and Lynn Brazen of

the Federal Home Loan Bank of Atlanta. This

group of panelists discussed different sources

of financing available for refinancing the

existing affordable housing portfolio as well

financing new construction. Real world exam-

ples were discussed as Bill Hale talked about

the purchase of an existing affordable housing

See “ANNUAL MEETING” on page 6New CARH member, Mel Nagata, of Waipahu Jack Hall MemorialCorporation, and his wife at CARH’s auction and reception.

National Site Managers of the Year Honored at CARH Annual Meeting

|

The Rural Housing Service (RHS) recently

named four site managers National Site

Managers of the Year for 2002 through

their sixth annual awards program. RHS

designed the awards program to recognize

site managers for their dedication and hard

work which helps to ensure the happiness and

safety of more than 400,000 individuals and

families living in approximately 18,000 proper-

ties financed by the United States Department

of Agriculture’s RHS.

The awards were presented in each of

three categories: elderly, family, and farm labor

housing. The 2002 winners for Family Site

Manager of the Year were Sherrie Perkins of

Investors Management who manages the

Arbor Trace Apartments, Brookhaven

Apartments, and Francis Lake Apartments in

Lake Park, Georgia. The Farm Labor Housing

Site Manager of the Year was Carmen

Roqueta of Everglades Village, Everglades

Community Association in Florida City, Florida.

There was a tie for the Elderly Housing Site

Manager of the Year—the two winners were

Cathy Wortham of Windsor Place Apartments,

Sun Belt Management in Wedowee, Alabama

and Brenda Witcher of Martins Landing II

Apartments, Harris Brown Management in

Martinsville, Virginia.

Candidates for this award were first

nominated by their local Rural Development

officers, their supervisors, or other members

of their communities. The nominees were

judged at the state-level by State Rural

Development review panels made up of both

public and private management experts. A

winner from each state was selected based on

resident satisfaction, property curbside appeal,

accurate and complete record-keeping, and

consistent performance of actions above and

beyond the call of duty.

Next, the state winners competed at the

national level; representatives from national

profit and non-profit associations, including a

representative from the Council for Affordable

and Rural Housing (CARH), reviewed and

scored the applications.

The national award winners were honored

at a special awards luncheon sponsored by

CARH on June 10, 2003 at the Ritz-Carlton

Hotel, Pentagon City in Arlington, Virginia.

Awards were presented to the winners at the

luncheon, which their families also attended.

The Honorable Mike Ross (R-AK), member of

the House Housing Subcommittee and Clinton

Jones, Esq., Senior Counsel to the House

Financial Services Committee were keynote

speakers at the event. Chris Alsop, of RHS,

presented the awards and gave each winner a

plaque recognizing her achievement. In addi-

tion to hosting the luncheon, CARH also gave

each award winner a special photograph of

the United States Capitol building to com-

memorate their trip to Washington, and to

show CARH’s appreciation for their role in

rural housing.

National Elderly Housing Site Manager of the Year: Cathy WorthamCathy has been employed by Sun Belt

Management since December of 2000; and

she manages Windsor Place, a 24-unit elderly

property in Wedowee, Alabama. Cathy has

always enjoyed working with the elderly and

goes above and beyond the duties of her posi-

tion. She is always available for her tenants

and takes pride in the way the apartments

and grounds look. Her residents praise her

for going out of her way to do the extra

things that make the apartments “home”

for her residents.

Ms. Wortham is married to Phillip

Wortham and has one son, Adam. Ms.

Wortham still operates a ceramic and flower

shop that she began with her mother and

operated jointly with her until 1996.

National Elderly Housing Site Manager of the Year:Brenda WitcherBrenda is employed by Harris Brown

Management and manages Martins Landing II

in Martinsville, Virginia. This is a 38-unit elderly

apartment complex, which she has managed

for three years. In this time, she has gained

the respect and trust of every resident there.

She is always available to the residents and

spends countless hours planting flowers,

pulling weeds, and picking up trash. She has

given her residents rides to the doctor and she

has even taken the time to make dinner for a

sick resident. She also publishes a monthly

newsletter that is enjoyed by all of the

residents.

Brenda Witcher lives in Callands, Virginia,

with her husband Charlie. They have three

grown children and three grandchildren.

Brenda and Charlie are co-founders of New

Life Church in Callands, where Charlie is

the Pastor.

National Managers of the Year: (from left to right) Sherrie Perkins, Cathy Wortham, BrendaWitcher, and Carmen Roqueta.

See “SITE MANAGERS” on page 23

|

At CARH’s 2003 Annual Meeting and

Legislative Conference in June, the

CARH Certification Board of Review

met to evaluate applications for renewing

CARH members’ educational designations: the

Rural and Affordable Housing Professional

(RAHP); and the Rural and Affordable Housing

Executive (RAHE). Four CARH members were

awarded renewals for their RAHP designation

and twelve CARH members were awarded

renewals for their RAHE designation.

CARH’s professional designations denote

CARH members who have proven to uphold

the highest standards of professionalism and

excellence in the affordable and rural housing

industry. The RAHP designation recognizes

CARH members who typically work as site

managers, assistant managers, occupancy spe-

cialists, RHS or Housing Finance Commission

occupancy personnel, the equivalent, or any

combination of the above. The RAHE designa-

tion recognizes CARH members who have

worked in the industry for at least five years,

with at least two years of that experience in a

supervisory or executive capacity.

Candidates for both the RAHP and the

RAHE designations must have a record of high

standards, ethics, and integrity in all business

issues. They must also be employed by a com-

pany that is a member in good standing with

national CARH, and must be recommended

by fellow CARH members. Candidates apply

using the application form provided by the

CARH national office and must provide docu-

mentation showing that they have met the

qualifications for the designation. All complet-

ed applications are examined by CARH’s

Certification Board of Review. The RAHP and

RAHE designations are valid for two years from

the date of initial issuance; after two years,

CARH members may apply for renewal and, if

approved, continue using the designation.

The qualifications for earning the RAHP

designation include successful completion of

CARH’s Basic Apartment Management Course

(including successful completion of the final

exam); occupancy training, specifically, the

Spectrum STAR or equivalent RHS Occupancy

Training; and fair housing and 504 training

such as the Spectrum Fair Housing or an

equivalent. Candidates must also have two

years of experience in rural housing, serving in

the capacity of a site manager, assistant man-

ager, occupancy specialist, RHS or Housing

Finance Commission occupancy personnel, the

equivalent, or any combination of the above.

Candidates must have accumulated at least

30 participation credits by attending CARH

events, either nationally or locally, or through

alternative, pre-approved participation credits

for circumstances where distance makes par-

ticipation in local CARH activities difficult.

RAHE candidates must have at least five

years experience in the rural housing industry,

and at least two years of that experience must

be in a supervisory or executive capacity. The

candidate must have successfully completed a

STAR or equivalent RHS occupancy-training

program. Work experience may be substituted

particularly if the individual is an owner or is in

a supervisory role in the company. In addition,

successful completion of fair housing and 504

training within the last two years is required.

A complete list of qualifications, including

fees, is available from the CARH national

office. For more information about CARH’s

designations, or to request an application,

please contact Lauren Block at the national

CARH office at 703-837-9001.

Congratulations to CARH members who

were awarded Rural and Affordable Housing

Professional (RAHP) and Rural and Affordable

Housing Executive (RAHE) designation

renewals by CARH’s Certification Board of

Review at CARH’s 2003 Annual Meeting and

Legislative Conference!

Designation Renewals Awarded at CARH’s Annual Meeting

RAHE Designation Renewals

Michael BurkeCBM GroupAuburn, CA

Tina Williams-BurkeCBM GroupAuburn, CA

Robert A. CaplanDiversified Housing Services, Inc.Houston, TX

Ray L. HuffAuburn Realty, LLCAuburn, AL

Cora W. TankersleyAuburn Realty, LLCAuburn, AL

John T. HuffHuff Management Company, Inc.Opelika, AL

Elizabeth KuykendallHuff Management Company, Inc.Opelika, AL

Anna M. PatilloHuff Management Company, Inc.Opelika, AL

Deborah AversanoQuality Management Inc.Mercer Island, WA

Stacy SissonsValentine & CompanyHuntington, NY

Susan ValentineValentine & CompanyHuntington, NY

Robert P. Yoder, Sr.Warrior Run Development Corp.Turbotville, PA

RAHP Designation Renewals

Cindy SniderBiggs, Inc.Decatur, IN

Marie LeachCloverdale Community HousingCloverdale, IN

Hazel JonesSouthwind Management Services, Inc.Leesburg, GA

Pat GuerreroT & C Associates, S.C.Madison, WI

portfolio and how each source of funding

played into the transaction.

The “Multi-Family Housing Information

System (MFIS) 3—Why, When and How Is It

Working?” session featured Larry Anderson,

Director of Office of Rental Housing

Preservation at RHS. Larry gave a demonstra-

tion of the system and reports generated so

that attendees could see the type of informa-

tion that the agency both at the national and

state levels could access. The data is intended

to be the only information gathering system

used by the agency nationwide. The system

will allow the national as well as states and

district offices to have access to servicing infor-

mation that will, in turn, generate uniform

policies and procedures. In addition, when

the system is fully operational, it will help the

agency provide better and accurate informa-

tion to Congress on programs.

During a break in the program, a special

tour of the National Gallery of Art (NGA) was

planned for attendees and their wives and

guests. This docent-led one-hour tour featured

highlights from the NGA’s permanent collec-

tion. The permanent collection is one of the

finest collections in the world, illustrating

major achievements in painting, sculpture,

and graphic arts from the Middle Ages to

the present. After the tour, there was ample

opportunity to further explore the museum

and visit the gallery shops. Several meeting

attendees who did not go on the tour took

time during this period and visited with their

members of Congress.

The afternoon program again gave atten-

dees a choice of sessions and topics. Paul

Jemmi and Krista O’Malley of Acordia; Harry J.

Kelly, Esq. of Nixon Peabody, LLP; Roger Platt

of the Real Estate Roundtable; and Stephen

York of the Department of Homeland Security,

participated on the panel “Terrorism,

Insurance and Related Security Issues.” Federal

law enforcement agencies have issued two

alerts to the housing industry, warning that

multifamily housing may be a “soft” target of

future terrorist activity. Presenters discussed

how owners and managers ought to address

the questions of (1) appropriate action that

should be taken to protect residents and prop-

erty and (2) how changes in law since the

September 11, 2001 terrorist attacks have

affected the operation and management of

multifamily properties. Best practices were

reviewed as well as changes in federal and

state law dealing with terrorism.

A majority of the developers attending

the conference opted for “The Section 538

Program—Mixed Reviews and Early Promise—

Why Bother?” At this session, Jeff Woda, The

Woda Group, led panelists in a discussion

about the Section 538 program and how, as

a developer, he has made the program work.

Rounding out the panel were Bonnie Birath of

Huntington National Bank, David Cooper of

Alliance Holding and Melodie Taylor of the

Ohio Rural Development office. Actual trans-

actions that the panelists participated in were

reviewed. Also discussed were proposed regu-

latory changes, that when implemented will

hopefully increase investment by the second-

ary mortgage market.

The final panels of the day featured a

choice between “Time Management” headed

by Diane Cohen, Cohen and Company and

“Development and Management Opportunities

with Other Rural Development Programs.”

The Time Management session gave some

excellent examples of how on a day to day

basis attendees could better organize both

their professional and personal time, thereby

reducing stress and increasing individuals’

efficiency and productivity.

Several other programs administered by

the Rural Development present opportunities

for developers and management companies.

“Development and Management Opportunities

with Other Rural Development Programs” fea-

tured Bill Hagy, Rural Business Programs; David

Layfield, Layfield and Associates; Pat Sheridan,

Rural Housing Service; and Peter Talbot, Michel

and Associates. Panelists discussed the Section

514 farm labor housing as well as the rural

business programs and how both programs

can work in partnership with for-profit devel-

opers as well as non-profit organizations. This

session provided important information on

programs and opportunities in areas outside

of the traditional multifamily programs.

What is CARH’s annual meeting and leg-

islative conference without our auction? For

an unprecedented third year, Bill Shumaker,

Provident Management and CARH’s Secretary,

was at the helm as CARH’s auctioneer. We

raised close to $16,000 for the association.

Attendees bid on silent auction items, which

included gift baskets, gift certificates to

various restaurants and CD/DVD players.

Live auction items included unique vacation

packages; a weekend in upstate New York;

a weekend in Myrtle Beach, South Carolina;

Puget Sound and Key West vacation homes;

the world famous Alabama barbecue; framed

art work including some exquisite photos

of Washington, D.C.; and the consulting

Annual Meeting continued from page 3

See “ANNUAL MEETING” on page 26

Acordia

ALCARH

American Rural Housing Insurance Agency

Boston Capital

CLASSIC Real Estate Systems, LLC

Crest Realty

Davis Insurance Agency

Michel Associates, Inc.

Provident Management, Inc.

Searle & Company

Sun Belt Management, Inc.

Third Renaissance, Inc.

Warrior Run Development Corp.

Thank You To Our Meeting Sponsors!

Federal Circuit Finds Prepayment Laws Caused A Compensable TakingBy Harry J. Kelly, Esq., Nixon Peabody, LLP, CARH General Counsel

’

Two recent Federal Circuit decisions came

out in support of awarding damages to

affordable housing owners where mort-

gage prepayment was delayed. For owners of

rural housing projects, these decisions have

two helpful implications. First, many owners of

rural housing also own HUD-insured housing

and ownership rights have been confirmed in

these cases. Second, and more important in

some ways, these cases, while dealing with

takings issues, are generally supportive of the

view that owners of affordable housing suf-

fered when their prepayment rights were

blocked by later legislation.

Vindicating the position of owners who

initially brought suit in the mid-1990s, the

Federal Circuit Court of Appeals ruled that

owners who were barred by the Emergency

Low Income Housing Act of 1988 (“ELIHPA”)

and the Low Income Housing Preservation and

Resident Homeownership Act of 1990 (“LIH-

PRHA”) from prepaying their HUD insured

mortgages and who are able to meet certain

evidentiary tests have suffered a compensable

taking of their property rights. Cienega

Gardens v. United States, __ F.3d ___, 2003

U.S. App. LEXIS 11656 (Fed. Cir.)(“Cienega

Gardens VIII”); Chancellor Manor v. United

States, ___ F.3d ___, 2003 U.S. App. LEXIS

11674 (Fed. Cir.). In Cienega Gardens VIII, the

Federal Circuit focused on two issues: (1) did

the owners have a protected property right to

prepay their mortgages after twenty years that

was taken by ELIHPA and LIHPRHA and (2) if a

taking occurred, were the owners there enti-

tled to damages? The Federal Circuit answered

both questions affirmatively—at least for the

four plaintiffs who had proceeded to trial in

the lower court on the original contractual

claims in that case. The court in Chancellor

Manor addressed a number of related matters,

reaffirming the earlier decisions in Cienega

Gardens that the owners did not have a con-

tract with HUD but concurring that they may

have suffered a compensable taking, subject

to proving their case at trial.

Concerning the basic property interest of

the owners, the Federal Circuit in the latest

Cienega Gardens decision had no trouble

finding that the “[o]wners had unequivocal

contractual rights after twenty years to prepay

their mortgages” and therefore had a property

interest in those rights. Cienega Gardens VIII at

*23. The court rejected the government’s

argument that because the government

retained the right to amend its prepayment

regulations, it could essentially terminate the

owners’ prepayment rights and therefore, that

those rights never vested. Succinctly, the

Federal Circuit held that “[t]he government’s

contention is, in effect, that Congress could

retroactively alter the Owner’s mortgage

contracts in any way it chose without any

recourse for the Owners. That cannot be, and

is not, the law.” Id. at *27. On the basis of

this analysis, the appellate court concluded

that the owners possessed a vested property

interest in prepayment. Id. at *45.

Next, the Cienega Gardens court turned to

whether ELIHPA and LIHPRHA constituted a

compensable taking of that property right. The

court found that as a regulatory taking, it

would only be compensable if it went “too

far”—that is, that the prepayment statutes

forced the owners to bear a burden that “‘in

all fairness and justice, should be borne by the

public as a whole.’” Id., quoting Armstrong v.

United States, 364 U.S. 40, 49 (1960). The

court applied the well-known Penn Central

analysis to assess the claimed regulatory

taking: (1) the character of the government

action; (2) economic impact of the regulation

on the claimant; and (3) the extent to which

the regulation interfered with distinct invest-

ment-backed expectations. Penn Central

Transportation Co. v. New York City, 438 U.S.

104, 124 (1978).

On each of these points, the court found

for the “model” plaintiffs in Cienega Gardens.

As to the character of the government action,

the court strongly concluded that ELIHPA and

LIHPRHA constituted physical invasions of the

model owners’ property. Id. at *49. As to the

economic impact standard, the appellate court

found that there were sufficient facts in the

record of the contractual damages claim to

support the conclusion that the owners had,

in fact, been injured by the prepayment

legislation. Finally, as to the model owners’

investment-backed expectations, the court

found that they did in fact have expectations

concerning their right to prepay after twenty

years and that HUD’s reserved rights to alter

its regulations did not undermine those expec-

tations. As the court summarized, “[a]t the

very least, one would not reasonably expect

Congress to make legislative changes that

would actually discourage parties from partici-

pating in the program in the future.” Id. at

*85. On the basis of this analysis, the Cienega

Gardens VIII court concluded that the

“model” plaintiffs there were entitled to

compensation for a regulatory taking under

the Penn Central factors. Id. at *96.

Taken together, Cienega Gardens VIII and

Chancellor Manor represent strong vindication

for the owners of HUD-insured housing who

have argued for more than a decade that

ELIPHA and LIHPRHA represented compensa-

ble takings. Obviously, aside from the model

plaintiffs, the plaintiffs in the prepayment

cases have to present timely evidence to

support their claim that the takings were, in

fact, compensable.

Harry J. Kelly, Esq. is a partner in the law firmof Nixon Peabody, LLP in Washington, D.C.Nixon Peabody is CARH’s General Counsel.

Owners of affordable housing suffered when their prepayment

rights were blocked by later legislation.

It occasionally helps to take a look at recent

regulatory pronouncements and see how

agency interpretations are developing,

which I have taken to calling the “regulation

round-up.” There have been a few recent

developments in RHS Administrative Notices

(“ANs”), which are not regulations, but inter-

pretations of regulations. Still it is worthwhile

to see what sort of regulatory issues are

developing before us.

RHS has reissued guidance regarding lead-

based paint compliance through AN 3862

(April 29, 2003), which mainly summarizes

HUD regulations at 24 C.F.R. Part 35. HUD and

EPA are jointly charged with administering the

relevant federal lead-based paint laws. These

laws and rules actually apply to all residential

housing, not just housing receiving federal

assistance, and require notices to residents for

target housing developed before January 1,

1978. The level of regulation and required

action increases for federally assisted properties,

but not every unit is effected. For example,

these rules do not apply to non-residential

property, exclusively elderly property, zero-bed-

room unit dwellings, and properties found to

be lead-based paint free. Of course, there are

exceptions to every category so please consult

AN 3862 for details.

AN 3836 (March 26, 2003) also discusses

lead-based paint, but focuses on just federally

assisted properties receiving more than $5,000

annually in project-based assistance and devel-

oped before January 1, 1978. These properties

must conduct a lead-based paint risk assess-

ment by a qualified assessor by September 1,

2003. Properties built before 1960 should

have already completed such an assessment.

The purpose of the risk assessment is to estab-

lish interim controls or needed repairs, and

also any needed ongoing operations and

maintenance plans.

In a past CARH News we wrote about the

Soldiers and Sailors’ Relief Act, and AN 3846

(April 3, 2003) now contains instructions

about this law and the protections it affords to

families of servicemen and women. Essentially,

families of active duty members have addition-

al statutory rights to either terminate a lease

or continue to reside under the lease, at their

option. This law also provides some additional

procedures prior to eviction.

There has been increasing focus in recent

years on identity-of-interest (“IOI”) entities,

and AN 3867 (May 26, 2003) advises State

Directors about IOI approval. That AN reminds

state offices to require bids from third parties

to verify that IOI costs are reasonable and add

value to the services or goods provided.

There has also been a recent enforcement

development at HUD, which issued a May 27,

2003 memorandum from Beverly Miller,

Director, Office of Asset Management to HUD

field offices. This memorandum clarifies an

enforcement policy we wrote about in the

last edition of CARH News. HUD had issued a

policy that any Section 8 or HUD-insured prop-

erty scoring below 60 in its Real Estate

Assessment Center (“REAC”) inspection would

be automatically sent to HUD’s Enforcement

Center and the owner and manager would

have their Previous Participation Clearance

Form 2530 “flagged,” which can indefinitely

hold up new transactions. This new memoran-

dum clarifies HUD policy and allows the local

HUD Hub Director discretion in deciding

whether or not to place the flag.

On a separate note, there was a recent IRS

revenue ruling that permitted a community

service facility to be included in project basis.

Revenue Ruling 2003-77 determined that the

taxpayer could include a community service

facility in its low-income housing tax credit

project where it contained certain features.

Specifically, it would improve the quality of

life for community residents (such as day care,

literacy training, outpatient clinical health

care); it was designed to provide services to

persons with incomes of 60 percent or less of

area median income (as determined by a mar-

ket study); it was located on the same tract of

land as one of the project buildings; and any

fees for services would be affordable to per-

sons at or below 60 percent of area median

income. This should help finance community

service facilities.

As you can see, there have been

regulatory-type developments in different

areas of the affordable housing industry.

Some of these developments are more helpful

than others, but all of them are worth noting.

Richard Michael Price, Esq., is a partner inthe law firm of Nixon Peabody, LLP inWashington, D.C. Nixon Peabody, LLP isCARH’s General Counsel.

’

Regulation Round-UpBy Richard Michael Price, Esq., Nixon Peabody LLP, CARH General Counsel

Special Thanks To Our Advisory Trustee Members

AcordiaEdward Goesel

E & A ServicesMark English

T & C ServicesJames Poehlman

Belmont Management Company, Inc.

Bruce Baird

Fentress, Brown, CPAs& Associates, LLC

Todd Fentress

Warrior RunDevelopment Corp.

Robert P. Yoder, Sr.

As was reported in the last issue of

CARH News, CARH has joined togeth-

er with other industry groups to

oppose the recent US Postal Service (USPS)

proposals that would require properties to

change the dimensions and location of mail-

boxes for existing multifamily complexes.

According to results of a recent member-

ship survey (representing over 46,901 units

that are owned or managed by CARH

members), CARH members are strongly

opposed to the proposed requirements for

retrofitting existing mailboxes. Based on typical

multifamily mailboxes in use today, the new

requirements that are being proposed by the

USPS will generally result in the need for 25%

or more additional wall area and as much as

10” or more additional wall depth or hallway/

lobby protrusion space for the same number

of tenant boxes.

CARH members’ responses showed that

replacing existing mailboxes to comply with

the proposed regulations would not be possi-

ble for at least 1,474 units due to a lack of

space available to accommodate the proposed

mailbox dimensions. In addition, extensive

levels of work, including claiming dwelling

unit space and/or replacing indoor boxes with

an outdoor kiosk, or extensive remodeling

construction, would be required for at least

20,911 units. Over 10,744 units would require

significant work such as relocating mailboxes

to another area and/or moving plumbing,

hvac, or electrical systems and/or using space

that is already being used for another

purpose, such as storage, utility, office space.

Only 4,772 units could comply with the

regulations with minimal amounts of work,

meaning space is available without using

space that is already being used for another

purpose—the space can also easily accommo-

date the same number of resident boxes and

additional parcel box(es) without significant

remodeling or construction.

As a result of the survey responses from

CARH members, CARH has continued to

work to oppose the proposed retrofitting

regulations alongside other industry groups

including the National Association of Home

Builders, the National Association of Realtors,

The National Multi Housing Council, the

National Association of Housing and

Redevelopment Officials and the National

Leased Housing Association.

In a June meeting with postal service

representatives, the aforementioned industry

groups emphatically communicated their

opposition to the proposed requirements for

retrofitting existing mailboxes. The groups

explained that they do not envision a compro-

mise on the retrofitting since it would be

impossible to develop criteria for changes on

existing mailboxes. An article published in the

July 19, 2003 edition of the Washington Post

recounts that “the groups said replacing the

estimated 16 million boxes in America’s

600,000 apartment buildings would cost more

than $2 billion. Besides the ‘massive’ cost, the

groups contend the changes would inconven-

ience millions of apartment residents as build-

ings underwent major rehabilitations. And

they claim the proposal could ‘force apartment

owners to run afoul’ of other federal laws

on accessibility for the disabled because

the bigger, deeper mailboxes would eat up

floor space.”

The postal service has cited security issues

such as identity theft, among others, as one of

the major reasons for these proposed changes.

A recent survey, of 2,000 building owners

(including at least 115 CARH members)

showed that “fewer than 1 percent of apart-

ment firms reported being aware of any

security problems.”

The proposed requirements to change the

mailbox dimensions in future multi-family

developments seem more palatable to industry

groups (including CARH members) as long as

the effective date for the regulations takes

into account development projects already

underway. Setting the effective date for sever-

al years out from the time that the regulations

are issued may be an acceptable solution. In

addition, the industry groups argue that any

proposed changes for new construction must

be practical solutions to the so-called security

issues cited by the postal service.

The committee is currently in the process

of finalizing a letter to the postal service to

further communicate the industry’s views on

the proposed regulations. CARH anticipates

that the letter will reflect CARH’s position, and

if that is the case, CARH plans to sign onto

that letter.

The postal service is planning to hold

another meeting with the industry groups

within the next several weeks to continue talks

on the proposed regulations. CARH will stay

involved to ensure that CARH-member input is

included in the committee’s actions. As more

news on this matter becomes available, CARH

will report it to members through broadcast

faxes and emails and through the CARH News

and CARH’s Broadcast E-mails. In the mean-

time, members may contact Lauren Block at

the CARH national office (703-837-9001) with

questions or comments.

|

CARH Continues to Oppose Proposed Retrofitting Requirements for MailboxesBy Lauren Block, Director of Marketing and Membership Services

CARH members’ responsesshowed that replacing existingmailboxes to comply with the

proposed regulations would notbe possible for at least 1,474 units

due to a lack of space available to accommodate the proposed

mailbox dimensions.

The industry groups argue thatany proposed changes for newconstruction must be practical

solutions to the so-called securityissues sited by the postal service.

The Community Development Financial

Institutions (CDFI) Fund published a New

Markets Tax Credit (NMTC) notice of

allocation availability in the July 18, 2003 issue

of the Federal Register, inviting applications

for the second round of the program.

As CARH members may know, the NMTC

Program allocates tax credit authority to

Community Development Entities (CDEs),

which in turn make investments in a variety of

businesses and activities in low-income com-

munities across America. The 2003 allocation

round marks the second round of allocations

made under the NMTC Program.

The Fund is making available $3.5 billion

in authority for investments in qualified

community development entities. You can

access the notice of allocation online at:

http://a257.g.akamaitech.net/7/257/2422/

14mar20010800/edocket.access.gpo.gov/

2003/03-18213.htm. First-round NMTC

winners are eligible to compete in the

second round. The application deadline is

September 30.

In addition, the CDFI Fund is seeking

reviewers to assist in its review of applications

received under the NMTC program. The Fund

is seeking application reviewers with consider-

able expertise in community and economic

development finance, encompassing business

and real estate development, financing of

community-based organizations, the pooling

of community development loans for sale to

secondary markets, and financial counseling,

particularly for small businesses. Working in

teams but reading each application independ-

ently and without consultation, reviewers will

evaluate the applications using the CDFI Fund’s

established criteria, including such factors as

prior performance of the CDE in funding eligi-

ble activities; raising and managing investor

funds; capacity, skills, and experience of the

management team; proposed deployment of

allocated tax credit authority; and community

impact of the expected investments. For more

information on the application review criteria,

download the 2003 NMTC Allocation

Application from the Fund’s website at

www.cdfifund.gov.

The review process for the 2003 round will

begin in late October. A mandatory reviewer

orientation session will be held in Washington,

D.C. from October 28–October 30, 2003.

Reviewers are expected to free themselves

of all other work obligations during this orien-

tation session. Reviews of applications will

be completed using a web-based review

tool. Reviewers will be able to print applica-

tions at their preferred review venue for

reading convenience, and will submit their

evaluation forms to the Fund on-line. The

Fund will require reviewers to complete

all of their assigned reviews by Friday,

November 21, 2003.

The Fund intends to categorize applications

received by type of eligible activity, and to

assign applications to reviewers based upon

the expertise of the reviewer with that type

of activity. Depending on the volume of

applications in a given category, the CDFI

Fund expects each reviewer to read and score

12–15 applications, with the average review

time of 4 hours per application.

The CDFI Fund will provide non-Federal

government reviewers with a consulting fee

for participating. The consulting fee should be

approximately $2,000 per reviewer, but may

vary based upon the number of applications

reviewed. Reviewers will be provided with a

schedule of review completion deadlines as

part of the contractual agreement with the

CDFI Fund. The CDFI Fund will also provide all

reviewers (with the exception of non-local

Federal government employee reviewers) with

approximately $180 to cover all out-of-pocket

expenses (meals, travel—excluding common

carrier—and all other incidentals) incurred

during the 3-day orientation session and the

review period. Common carrier and lodging

costs will be paid for by the Fund, however,

all other costs incurred by the reviewers at the

hotel will be charged by the hotel to each

readers personal credit card.

The consulting fee and stipend will be paid

within two weeks after sign-off by the NMTC

staff that application review duties have been

completed.

The Fund intends to make its initial

selection of reviewers and alternates in early

September, with the possibility of adding addi-

tional reviewers in early October. Individuals

that are selected will be required to complete

detailed disclosure forms to uncover potential

conflicts of interest with the applications sub-

mitted. These forms will be made available to

reviewers at the time of their selection.

However, it is important to note that the

Fund’s conflict of interest policies will, at a

minimum, prohibit the following individuals

from serving as readers in the 2003 round:

• Employees or partners of organizations

(or affiliates of organizations) that have

applied under the 2003 round of the

NMTC Program;

• Employees or partners of organizations

(or affiliates of organizations) that have

indicated an intent to make NMTC quali-

fied equity investments in organizations

that have applied under the 2003 round

of the NMTC Program;

• Employees or partners of organizations

(or affiliates of organizations) that intend

to receive loans or investments from

organizations that have applied under the

2003 round of the NMTC Program, where

such loans or investments were funded by

the proceeds of NMTC qualified equity

investments; and

• Individuals that have financial interests

that are specifically contingent upon the

selection of an application for the receipt

of a New Markets Tax Credit allocation

(including consulting fees, bonuses or

prospective employment opportunities).

If you are interested in serving as a

reviewer, you must indicate your interest by

logging on to http://www.cdfifund.gov/

programs/nmtc/application/readers/

index.asp, completing a brief questionnaire

on-line, and submitting an electronic version

of your resume. You must submit these docu-

ments to the Fund by August 22, 2003 to

ensure consideration for the New Markets

Tax Credit review session. For more informa-

tion, please contact Lauren Block in the CARH

national office at 703-837-9001.

New Markets Tax Credit Update

CARH’s 2004 Mid Year Meeting CARH’s 2004 MidYear Meeting will be held from January 25–27, 2004at The Westin Kierland Resort and Spa in Scottsdale,Arizona. Register online at www.carh.org or contactthe national office staff at 703-837-9001 for moredetails.

Carolinas Council for Affordable Housing Annual Meeting The Carolinas Council forAffordable Housing (CCAH) 2003 Annual Meeting is scheduled for August 10–12, 2003 in Asheville,North Carolina. For further information, please contact Nancy Cross at 919-774-7713.

Florida CARH 2003 Annual Meeting Florida CARHwill hold it’s 2003 Annual Meeting in conjunctionwith USDA RD Florida State Meeting at the HotelOrlando North in Maitland, Florida from August19–21, 2003. Please contact Kate Scatko at 727-449-1182 for more information.

Organizational Meeting to Plan Colorado CARHChapter CARH will hold an organizational meetingto begin planning a new CARH chapter in Colorado.The meeting will be held on August 21, 2003 at theAdams Mark Hotel in Colorado Springs, Colorado.For more information, please contact Lauren Block atthe CARH national office at 703-837-9001.

CARH’s Basic Apartment Management Course The Council for Rural Housing & Development ofOhio (CRHDO) will be cosponsoring CARH’s BasicApartment Management Course from August20–21, 2003. For more details, contact theEducation Chairperson for CRHDO, Carie Lutes, at 330-325-1828 or colonialms@cs.com.

Council for Rural Housing & Development ofOhio’s 2003 Annual Meeting The Council for RuralHousing & Development of Ohio (CRHDO) is holdingtheir 2003 Annual Meeting September 8–9, 2003 atthe Hilton Columbus, located in the town center ofEaston. They will be holding a golf outing and bikeouting at the Bent Tree Golf Course on September 8,followed by a 20th Anniversary sit-down dinner atthe hotel. For more details, contact the CRHDOPresident, Jeff Woda, at 614-459-3929 orjwoda@wodagroup.com.

Minnesota CARH’s 2003 Annual MeetingMinnesota CARH’s 2003 Annual Meeting is sched-uled for September 22–23, 2003 at the GrandCasino in Hinkley, Minnesota. For more details,please contact Tara Falteysek, Executive Director of Minnesota CARH at 800-944-3078 orfalteysek@aol.com.

Michigan Rural Development Council’s 2003Annual Meeting Michigan Rural DevelopmentCouncil’s (MRDC) 2003 Annual Meeting is scheduledfor September 23–24, 2003 and will be held at theHoliday Inn in Mount Pleasant, Michigan. For moreinformation, contact Melissa at 517-347-9665.

Housing Association of Mississippi’s 2003 AnnualMeeting The Housing Association of Mississippi(HAM) will hold their 2003 Annual Meeting at theSilver Star Resort and Casino in Philadelphia,Mississippi from October 15–17, 2003. Please contactOlis Price, HAM Executive Director, at 601-709-6000Ext. 135 for more details.

CARH Board of Directors Meeting CARH’s Boardof Directors will meet at the Ritz Carlton, PentagonCity in Arlington, Virginia on October 19–20, 2003.Please contact the national CARH office at 703-837-9001 for more details.

Rural Rental Housing Association of Indiana’sHousing Harvest 2003 Rural Rental HousingAssociation of Indiana and Rural Development ofIndiana will host their second annual joint meeting,Housing Harvest 2003 from October 21–22 inIndianapolis, IN, at the Sheraton North Hotel &Suites. For more information, including registration,visit www.rrhain.org or contact RRHAIN’s ExecutiveDirector, Amanda Simmons at 866.546.7742.

CARH’s 2004 Annual Meeting & LegislativeConference CARH’s 2004 Annual Meeting & LegislativeConference will be held June 6–8, 2004 at the Ritz-Carlton Hotel, Pentagon City in Arlington,Virginia. For further information, please contact the national office staff at 703-837-9001.

CARH’s 2005 Mid Year Meeting-- The 25thAnniversary Celebration CARH’s 2005 Mid YearMeeting will be held January 23–25, 2005 at the Ritz-Carlton Hotel in New Orleans, Louisiana. For further information, please contact the national office staff at 703-837-9001.

CARH’s 2005 Annual Meeting & LegislativeConference CARH’s 2005 Annual Meeting &Legislative Conference will be held June 5–7, 2005 atthe Ritz-Carlton Hotel, Pentagon City in Arlington,Virginia. For further information, please contact thenational office staff at 703-837-9001.

CARH Meetings

CARH’s Legislative Update

The first session of the 108th Congress

began on January 7, 2003. As a result

of the November 2002 elections,

party control of the United States Senate

changed hands from the Democrats to the

Republicans. In the United States House of

Representatives, control remained with the

Republicans. While the new fiscal year for the

federal government began on October 1,

2002, the Omnibus Appropriations bill for

Fiscal Year 2003 was not signed into law by

President George W. Bush until February 20,

2003. For information on the Fiscal Year 2003

funding levels for affordable housing pro-

grams of interest to CARH members, please

refer to the Press Release section of CARH’s

home page.

Legislation that was not enacted at the

end of the 107th Congress will have to be

reintroduced in the new Congress. In addition

to Fiscal Year 2004 funding levels for several

housing programs, support for enactment of

legislation that would restore owners’ prepay-

ment rights also remains a top priority.

The following chart reflects the issues of

concern to CARH. This chart will be updated

throughout the year to reflect other issues

that may come to the forefront during the

first session of the 108th Congress. Updated

information on these issues will also be sent

to CARH members through CARH’s Broadcast

Email system.

| |

Subject CARH Position

Section 515 ProgramBudget proposes $71 million for FiscalYear 2004. No new construction.

Oppose administration’s request. At least $120million for Fiscal Year 2004. This is the level sup-ported by the Senate Appropriations Committeefor Fiscal Year 2003.

Section 521 Rental AssistanceBudget proposes $740 million for FiscalYear 2004. Not sufficient should addi-tional funds be added for new construc-tion in the Section 515 program.

Oppose administration’s request. An additional$60 million should be added for Section 515new construction.

Section 538 Rural Rental HousingLoan Guarantee ProgramBudget proposes $100 million forFiscal Year 2004.

Support administration’s request.

Section 502 – Guarantee ProgramBudget proposes $2.725 billion forFiscal Year 2004.

Oppose administration’s request. At least $4.528 billion or Fiscal Year 2003 level.

Income Limits for Low IncomeHousing Tax Credit (LIHTC) properties

Support legislation which would allow statesto use the higher of area median income orstatewide income for the purpose of calcu-lating LIHTC application income limits.

New Housing Production Programs Support production programs.

Nonelderly Occupancy in ElderlyProjects

Extend Section 8 provision, which gives ownersoption of limiting non elderly to lesser of 10% toSection 515.

PrepaymentReinstate owners’ prepayment rights.

Permit prepayment in all cases whereowner’s original contract with RHS permitted prepayment.

Section 502 – Direct ProgramBudget proposes $1.366 billion forFiscal Year 2004.

Support administration’s request.

National Housing Trust Fund Support legislation that would establish anational affordable Trust fund. Fund wouldprovide for the development, rehab and preservation of housing.

9% Credit for RHS Properties Current Internal Revenue code should bechanged to permit the 9% Low IncomeHousing Tax Credit (LIHTC) for RHS proper-ties, similar to the treatment of HUDfinanced properties.

Overturn recent TAMs issued bythe IRS. Technical Advice Memoranda(TAMs) issued by the IRS would reverseindustry practices for including typicaldevelopment costs in basis.

Support legislation that would clarify that certaindevelopment costs typically included in tax crediteligible basis as generally accepted practices. Theconcept of “development cost basis” would besubstituted for “eligible basis” as currently existsin Section 42(d)(1) of the Internal Revenue Code.

Elimination of Double Taxation ofCorporate Dividends. Administrationproposes as part of it economic stimu-lus proposal to eliminate double taxa-tion of corporate dividends.

If enacted in its current form, the administration’s proposalto eliminate double taxation of corporate dividends couldnegatively impact several tax credits used for new con-struction and rehabilitation of existing housing in ruralareas throughout the country. Specifically, the Low IncomeHousing Tax Credit (LIHTC) program would be adverselyimpacted. The affordable housing crisis facing ruralAmerican would be worsened and the major economicstimulus that the LIHTC provides would be lost.

House Action Senate Action Conference Action

H.R. 2673 passed the full House on July 14,2003. $731.3 million approved for the programfor Fiscal Year 2004.

S. 1427 passed the Senate AppropriationsCommittee. $721.3 million approved for theprogram for Fiscal Year 2004.

N/A

H.R. 2673 passed the full House on July 14,2003. $116.5 million—includes funds for newconstruction—for the program for Fiscal Year2004.

S. 1427 passed Senate AppropriationsCommittee. $115.1 million—includes funds fornew construction—for the program for FiscalYear 2004.

N/A

H.R. 2673 passed the full House on July 14,2003. $100 million approved for the programfor Fiscal Year 2004.

S. 1427 passed the Senate AppropriationsCommittee. $100 million approved for theprogram for Fiscal Year 2004.

N/A

H.R. 2673 passed the full House on July 14,2003. $1.366 billion approved for the pro-gram in Fiscal Year 2004.

S. 1427 passed the Senate AppropriationsCommittee. $1.359 billion approved for theprogram in Fiscal Year 2004.

N/A

H.R. 284 introduced by Representatives AmoHoughton (R-NY) and Richard Neal (D-Mass.)would allow the income flexibility as support-ed by CARH.

S. 595 introduced by Senators Orrin Hatch(R-UT) and John Breaux (D-LA) would allowthe income flexibility as supported by CARH.

N/A

Discussions ongoing Discussions ongoing N/A

Discussions OngoingDiscussions Ongoing

N/A

H.R. 2673 passed the full House on July 14,2003. $2.725 billion approved for the pro-gram in Fiscal Year 2004.

S. 1427 passed the Senate AppropriationsCommittee. $2.725 billion approved for theprogram in Fiscal Year 2004.

N/A

Hearings being conducted on the budget. Hearings being conducted on the budget. N/A

H.R. 1102 introduced by RepresentativeBernard Sanders (I.VT) would support CARH’sposition.

S.1411 introduced by Senators LincolnChaffee (R.-RI) and John Kerry (D.-Mass)would support CARH’s position.

N/A

Discussions ongoing Discussions ongoing N/A

H.R. 1928, introduced by RepresentativesNancy Johnson (R-Conn.) and Charles Rangel(D-NY) would support CARH position.

Discussions Ongoing N/A

H.R. 2, the Jobs and Growth Tax Act of 2003, aspassed by the House would reduce both the dividendand capital gains tax rates of 15% for those in thehigher tax income tax brackets and to five percent forthose in the 15% and 10% tax brackets. The Houserejected the administration’s proposal on the elimina-tion of double taxation of corporate dividends.

S. 2, the Jobs and Growth Tax Act of 2003 aspassed by the Senate would allow a 50% exclu-sion for corporate dividend income in 2003, 100percent in 2004 through 2006 and then sunsetprovision.

Tax rates for both dividends and capital gainswill be cut to 15% for most taxpayers begin-ning this year. Taxes on dividends and capitalgains for individuals in lower income bracketsare reduced to five percent and eliminatedentirely in 2008.

| |

On June 19, 2003, the Housing and Community Opportunity

Subcommittee of the House Financial Services Committee held

a hearing on rural housing issues. This was the first hearing in

almost ten years that the subcommittee has held that focused solely on

rural housing. Betty Bridges, CARH’s 2003–2004 President testified on

behalf of CARH. Betty appeared on a panel with individuals represent-

ing the National Housing Law Project, the National Rural Housing

Coalition, Housing Assistance Council, the Mortgage Bankers and the

National Association of HomeBuilders. In her testimony Betty empha-

sized the following:

CARH members generally have had a productive working

relationship with the Rural Housing Service (RHS), but they have also

experienced a high degree of frustration at the lack of resources and

consistency from state to state. The RHS has not been fully able to

meet its intended purpose and goals because—

• It is organized in a manner that inhibits the sharing of information

and training, thereby greatly adding transaction costs and prevent-

ing many meritorious transactions;

• The agency is not adequately funded to either expand or maintain

its housing stock, and is unable to effectively coordinate with exist-

ing resources from other agencies; and

• RHS’s programs are subject to artificial statutory restrictions that

limit development and preservation.

Betty asked the

committee to enact

legislation that would

restore owners’ prepay-

ment rights and to

authorize additional

funding for the programs

administered by the

RHS as well as the

Department of Housing

and Urban Development.

In addition to Betty’s

full testimony, a copy of

CARH’s Aging Portfolio

Position Paper was also

entered into the perma-

nent committee record.

CARH would urge the Senate Banking, Housing and Urban

Affairs Committee to also hold rural housing hearings in the near

future. We hope that these hearings will lay the foundation for a

comprehensive rural housing bill to be considered by the Congress

in the 108th Congress.

House Subcommittee Holds Rural Housing Hearing

Betty Bridges, CARH’s 2003–2004 President,testifying on behalf of CARH in front of theHousing and Community OpportunitySubcommittee.

MINC Update (MINC, Management Agent Interactive

Network Connection)

January 1, 2003. Yes, that was the date RHS

has said you need to be MINC compliant. Are

you ready? Is your software provider ready?

You need to check on it.

SPAMYou have probably heard it and if you have an email address you proba-

bly get it, and are annoyed like the rest of us. Unfortunately, the August

2003 edition of Consumer Reports says it is not going to go away any-

time soon. In fact, their investigation turned up some very interesting

facts: a spammer can pay as little as $500 to cast over a million, yes,

that is a million emails for that price tag. Imagine the cost of printing

and direct mailing through the post office a million pieces ... now

you know why spam is so attractive to spammers. Additionally, they

only need a few takers of their message and it is well worth their

investment.

On a personal note, my inbox is so polluted with emails, last month

I asked my staff to explore an email filtering software. (At 50 spams a

day, it got to be way too intruding.)

What is the solution/answer? There isn’t a very good one. However,

here are the options available to you:

1. Your ISP (Internet Service Provider), if its one of the big ones, has

filtering software in their own network. As a matter of fact, AOL

already filters out billions a day.

2. You can purchase spam-blocking software. I am currently doing a 30

day trial with a product called “iHateSpam” by Sun Belt Software. So

far, it is helping. I don’t have full understanding of all its functionality,

and, therefore, am not in a position to recommend it. There are sev-

eral others out there: Stata Labs, Mailshell, Symantec, Blue Squirrel,

MailFrontier. Check out their websites if you want further information.

3. This month’s (July) Consumer Reports offers several suggestions to

reduce being added to spam lists. Avoid posting your email address

on public sites and using it in chat rooms. Refuse to patronize spam-

mers or even open their emails (that is the only way in the long run

they will stop). If your email program (MS Outlook) offers a “preview

pane” disable it to prevent a return message from going to its sender

validating you received it. Report spam to your ISP and forward it to

the FTC at uce@ftc.gov (uce = unsolicited commercial email). If you

receive a spam that promotes a brand, complain to the company.

And last, if you have broadband access, install a firewall. CU also

made one more interesting point, don’t click on the emails

“unsubscribe” link unless you trust the sender. It simply informs

the sender you are there and tells them you are a valid address

for future spam.

This is one of those situations we will have to work together to

control. Good luck, lets stamp out spam together!

Happy Computing!

Mitch Copman is President of CLASSIC Real Estate Systems, LLC,located in Norcross, Georgia. Mitch is also CARH’s 2003 Treasurer.

Tech-No-Helper!?By Mitch Copman, President CLASSIC Real Estate Systems, LLC

|

CARH has scheduled an organizational meeting for the rural

housing professionals who are interested in forming a state-

affiliation association in the state of Colorado. There is currently

no organized group specifically focusing on the needs of rural proper-

ties in Colorado, and it appears there is a need for more training and

services for those properties.

Joseph Deihl, RAHP and Executive Director of Washington CARH,

spoke at the Rural Development conference in Greeley, Colorado in

April. He also manned a booth with information on CARH membership.

Due to the response generated at that meeting, CARH will hold an

organizational meeting in August to provide a forum for owners,

managers, developers, nonprofits, and any other interested industry

professionals to meet and to formally organize a state association.

Colleen Fisher, CARH’s Executive Director, will attend the meeting

and will give an industry report from the national prospective. Lauren

Block, CARH’s Director of Marketing and Membership Services, will also

attend to provide more information on the benefits of CARH member-

ship and of forming a CARH chapter. Mr. Deihl, the co-chair of CARH’s

state associations committee, will give a “school of hard knocks”

presentation on starting a state association. The attendees will then

have time to discuss the administrative details of starting the chapter

and take the first few steps toward that goal.

Letters of invitation have been sent to all borrowers and manage-

ment companies in Colorado. In addition, anyone interested in

participating in the formation of this new CARH chapter is welcome

to attend the meeting. The meeting will take place on Thursday, August

21, 2003 at the Adams Mark Hotel (4 South Cascade Ave., Colorado

Springs, CO 80903; Hotel Phone: 719-473-5600) in Colorado Springs,

Colorado. If you would like to attend, please contact Lauren Block in

the national CARH office at 703-837-9001.

CARH looks forward to serving the needs of the rural housing

industry in Colorado!

CARH Plans Organizational Meeting in Colorado

Experienced legal counsel and consulting concerning Rural Development housing

There are few places where owners and developers of USDA financed housing can turn for knowl-

edgeable assistance, but Nixon Peabody’s Affordable Housing Practice Group and independent rural

housing consultant John Meyers have now teamed up to offer an array of services in the complex,

highly-regulated area of federally funded rural housing. From refinancing and prepayment to compli-

ance and planning, our extensive experience enables us to provide valuable services to investors, lenders,

owners, and managers of properties financed by the Rural Housing Service (formerly the Farmers

Home Administration).

• Coping with the complexities of rural housing finance

• Prepayment, preservation, and refinancing

• Regulatory compliance matters

• Adverse agency decisions and appeals

• Experience that counts

Richard Price • 202.585.8716 • rprice@nixonpeabody.com • www.nixonpeabody.comJohn Meyers • 502.451.2727 • john@johnmeyers.com • www.johnmeyers.com

Turning plans into projects.

Launching officially in Washington, D.C.

at CARH’s 2003 Annual Meeting and

Legislative Conference, CARH and

Association Preferred ISP (APisp) began provid-

ing members a full range of Internet Services.

Inquiring members posed good questions that

we have chosen to share in this issue.

Question: What is APisp and exactly what do

you offer?

Answer: APisp is providing dial up Internet

access to CARH members, their properties and

tenants through out the United States and

Canada under the name Business Preferred ISP,

or www.BPisp.com. For just $16.95 per

month, CARH members will receive unlimited

local Internet access, 5 email accounts, 5

megabytes of personal Web space, 24/7 toll-

free customer assistance and technical support

and access to over 40 online news services.

National Internet access providers such as

AOL, CompuServe, MSN and Earthlink all cost

considerably more ($21.95 to $23.95) and do

not have the breadth of coverage in rural

areas that so many of our CARH members

need. Having surveyed properties nationwide,

we know we can offer service in at least 75%

of all rural areas.

Question: How do I get started?

Answer: Enrolling is as easy as a ten-minute

toll free phone call to (877) 204-2051, or for

those who already have internet access, a brief

sign up process on the Web by going to

www.BPisp.com and clicking on the “Sign Up

Now” star. There are several payment options

including the best value of an additional 5%

discount for a 1-year subscription, bringing the

monthly fee to $16.09.

Question: I have had my email address for

years and I am really attached to it. How can I

switch to BPisp.com and also keep my existing

email address with my old ISP. How do I

inform all my friends and associates of my

new email address?

Answer: In the case of free email services

such as Hotmail, Yahoo, Juno and others,

there is no need to change your email address.

If you choose to use Outlook or Outlook

Express as your email client, you may refer to

the “How To” tab on the www.BPisp.com

Web site for a detailed explanation of how to

set this up.

Should you choose to change your email

address to a “bpisp.com address”, consider

overlapping services for 30 days, during which

time you may send email notification to all

those listed in your address book. There

are some fun or professional postcards that

you may find on any of several services

which offer free greeting cards such as

www.bluemoon.com, www.americangreet-

ings.com or yahoo.com.

You may also create and add an “auto-

signature” to all of your correspondence

indicating “New Email Address” at the bottom

of each email which you send out. The

“Signature” function is found under the

“Tools” heading in Outlook.

In many cases, your ISP will offer the

service of “email only” for a nominal fee.

If your previous email address was used for

business, this may be quite worth the extra

$4.95/month. If you use an email client such

as Outlook or Outlook Express, you may auto-

matically forward your email into the same

email client. Most of the larger ISP’s like MSN

or AOL offer this option of a stand-alone email

account, or minimal usage service, which

includes email. You may make these arrange-

ments by calling a toll free number listed on

their sites or going to the link on their sites

which list the various plans available, selecting

the service choice that would best suite

your need.

Question: How do I cancel my old ISP?

Answer: Go to the “How To” tab found at

the top of all BPisp.com pages. Select this

question and voila! You will find a detailed list

of how to cancel the most frequently used

ISP’s with contact information for each.

As always, Kathleen Weaver is available inthe APisp office, 541-761-1007, to answer anyadditional questions or to enroll multipleproperties in one fell swoop. We are pleased tobe of service!

Q & A on CARH’s Newest Preferred Buyer ServiceBy Kathleen Weaver, APisp

Frequently AskedAPisp Questions

� What is APisp andexactly what do youoffer?

� How do I get started?

� I have had my emailaddress for years and I am really attached toit. How can I switch toBPisp.com and alsokeep my existing emailaddress with my old ISP.How do I inform all myfriends and associatesof my new emailaddress?

� How do I cancel my old ISP?

SUBSCRIPTION FORM

Are you ready to start receiving CARH’s Electronic AN Express?

Please complete the form below and mail or fax back to the national office with your payment of $225.

Make checks payable to the Council for Affordable and Rural Housing.

Company Name

Your Name

Phone Number

❍ I would like to receive the Electronic AN Express

Email Address

CARH is dedicated to making sure that you

receive the latest industry news as quickly as

possible. Therefore, we are proud to offer you a

subscription to CARH’s Electronic AN Express.

The AN Express is CARH’s subscription-based

publication that contains key Federal Register

excerpts from the Rural Housing Service, the

Department of Housing and Urban Development,

the Internal Revenue Service, the Federal Housing

Finance Board, and other agencies that impact

the industry. It also includes Rural Development

Administrative Notices; procedure manual changes;

and data sets such as the Income Limits, Difficult

Development Areas, and notices of funding

availability. With your electronic subscription, this

critical industry information is delivered to you

each day in one email. (On days that no relevant

material is released, you will receive no email.)

Your Electronic AN Express provides a list of the

relevant industry regulations and notices released

that same day. Items on the list are hyperlinks

so with one click, you can instantly view the

documents through your web browser. If you

prefer to keep ANs on file, simply print out the

documents you need.

It has never been easier or faster to access this

information. Searching for these documents on

your own is time-consuming. For a thorough

search, you can spend anywhere from a half an

hour to several hours per day, depending on the

amount of information released each day. Now,

with the Electronic AN Express, all the information

comes to you in one easy list for your review,

at your convenience. CARH does the hard work

for you: each day we search through thousands

of agency documents to present you with a

list of only the information that is relevant to

your business.

No other organization can get you this infor-

mation faster! And no other organization can get

you this information for a more affordable price!

An annual subscription price of $225, means that

your subscription will cost you about $19 per

month which is only about $4.70 per week—

less than $1 per day for this daily service!

Serving you Faster—CARH’s Electronic AN Express

On July 22, 2003, CARH, along with

nine other housing trade associations,

sent comments to the Department of

Housing and Urban Development (HUD)

regarding the agency’s Management Review

Form (HUD-9834). The joint comment letter

began with a recognition that the agency had

issued numerous policy and procedural

changes involving the Section 8 program and

that these changes necessitated an update to

the agency’s Form 9834. Changes to the form

have been anticipated by the industry for sev-

eral years. While the industry letter applauds

the agency for its efforts to change the form

so that it corresponds to industry practices, it

also outlines significant flaws and urges HUD

to take another look at not only the form

itself, but also the scope and purpose of a

management review.

In the past, HUD has relied heavily on

Form 9384 to review physical, financial and

occupancy practices of Section 8 housing

owners/managers as it had no reliable process-

es in place to accomplish such oversight. As a

result of the creation of the Real Estate

Assessment Center (REAC), HUD has made

significant advances in its ability to oversee

property operations. The formulation and

implementation of a standard physical inspec-

tion protocol as well as a process for the elec-

tronic submission and review of audited finan-

cial statements have significantly improved

HUD’s ability to monitor the performance of

properties that receive Section 8 project-based

subsidies. In addition, HUD created a

Departmental Enforcement Center to resolve

any problems identified as a result of the

physical or financial assessment conducted

by REAC. The agency has further refined its

data collection abilities with the development

of the Real Estate Management System

(REMS). Finally, the agency has revised

procedures for the administration of Section 8

(HAP) contracts.

These new tools that have been imple-

mented by the agency significantly reduces the

scope of the management review. HUD’s

revised form 9834 generally ignores the REAC

physical and financial reviews and the available

REMS data. In many respects, the manage-

ment review form requires gross duplication

of effort—not an efficient use of the

Performance-Based Contractor Administrators

or the HUD staff. The industry recommended

that the agency substitute an industry-devel-

oped form that formulated a few years ago

when the agency provided its first re-write of

the form. This form would separate compli-

ance issues from “best practice” issues and

provides for scoring on compliance issues.

CARH Submits Comments on HUD’S Management Review Form

Pull on your cowboy boots and your

ten-gallon hats! CARH is heading

“out west” to Scottsdale, Arizona for

the 2004 mid year meeting, and you won’t

want to it miss it!

The meeting

will be held from

January 25–27,

2004 at The

Westin Kierland

Resort and Spa

in Scottsdale,

Arizona, which is

located in north-

east Phoenix,

adjacent to Kierland Commons, a 38-acre

specialty retail development featuring shops,

boutiques and restaurants. The 735-room

resort offers a multitude of civilized charms—

from exceptional dining and entertainment to

a spa that honors the healing cultures of old

Arizona to 27-holes of Troon-managed

world-class golf at the Kierland Golf Club.

At the end of the day, Westin’s signature

Heavenly Bed® and Heavenly Bath® await—

just two of the special touches that have

earned Westin the #1 rating in the upper-

upscale category of Business Travel News

“2001 Survey of Top Hotel Chains.” Rest-

assured that your will be in good hands at

The Westin Kierland Resort and Spa, the

only Westin property in the Phoenix/

Scottsdale region.

Phoenix has garnered well-earned praise

as one of the world’s top five golf destina-

tions. As the sixth-largest city in the United

States, with nearly 1.3 million residents,

Phoenix offers a multitude of cultural and

recreational activities.

Greater Phoenix gives visitors the opportu-

nity to enjoy countless activities ranging from

outstanding museums, galleries, performing

arts, fine dining, horseback riding and cowboy

shoot-outs. The climate makes outdoor

activities, such as desert jeep tours, hot-air

ballooning, and water recreation a way of life.

Not to mention, scenic Arizona destinations

like the Grand Canyon and Sedona are just

easy day trips away!

You can register for the meeting online at

www.carh.org to take advantage of the early

registration discounts. All CARH members will

also receive a registration form and more

details about the meeting in an August

mailing from the CARH national office.

CARH’s 2004 Mid Year Meeting: Westward Bound!By Lauren Block, Director of Marketing and Membership Services, CARH

The Westin Kierland Resort and Spa, site ofCARH’s 2004 Mid Year Meeting.

As a result of the elections held at the 2003 Annual Meeting and

Legislative Conference, CARH welcomes two new members to

the board of directors.

Rodney Dudley was elected to fill the second year of the first term

of a board member who was elected for an executive officer position.

After his first year, Mr. Dudley will then be eligible for two two-year

terms. Mr. Dudley is the Vice President and fifty-percent owner of

Intervest Development Corporation, which is located in Madison,

Mississippi. Intervest Development Corporation has developed over 40

properties (1,500 units) in the last ten years, primarily through acquisi-

tion/rehab. They manage 57 properties, and about eighty percent of

their work is with Rural Development. Mr. Dudley is also the President

of the Housing Association of Mississippi, Inc. (HAM) which is the pri-

mary liaison between USDA Rural Development and the owners and

managers in the state. HAM is also a state-affiliated CARH chapter. In

addition, Mr. Dudley is also on the board of directors of the Mississippi

Multifamily Council, an arm of the Homebuilders Association of

Mississippi. Prior to his position at Intervest, Mr. Dudley was a CPA

for 20 years and partner in a regional CPA firm, specializing in real

estate taxation.

Kenyon Salo was elected to serve two two-year terms on the board.

Mr. Salo is the General Manager of SK Companies, CEO of SK

Management, CEO of SK Maintenance and owner’s representative of

Rural Development section 515 properties in five states: Vermont,

Massachusetts, Rhode Island, Connecticut and New Hampshire, where

SK Companies is based. He represents 1,130 units of Rural

Development Section 515 properties layered with four percent Low-

Income Housing Tax Credits. Mr. Salo is also on the board of directors

of the Rural Rental Housing Association of Southern New England

(RRHASNE), a CARH state-affiliated chapter.

In addition, CARH salutes Bruce Baird, of Belmont Management

Company, Inc. in Buffalo, New York, for his service on the executive

committee. Mr. Baird served as the secretary for five years. Following

Mr. Baird’s retirement, Bill Shumaker, of Provident Management, Inc.,

in Mansfield, Ohio, was elected to serve on the executive committee

as the secretary.

CARH Welcomes Two New Board Members

National Family Housing Site Manager of the Year:Sherrie PerkinsSherrie Perkins began her career in Rural

Development properties with Investors

Management Company of Valdosta, Georgia,

in May of 2000. She managed two multifamily

complexes and one elderly complex totaling

115 units. In October 2002, two additional

multifamily complexes were added to her

responsibilities, making her overseer of 163

units. All five complexes remain at 90 percent

or greater occupancy. She was promoted to

Regional Property Manager in October 2002

and now oversees 20 complexes in Georgia

and one in Florida.

Ms. Perkins is married to Anthony Perkins

and lives in Lake Park, Georgia. They have four

sons ranging in age from 28 to 15 years old.

She enjoys time with family, bowling, loves

animals, and is an avid reader.

National Farm Labor Housing Site Manager of the Year:Carmen RoquetaCarmen Roqueta joined Everglades

Community Association in 1993 as its initial

Tenant Resource Liaison to bolster services to

migrant and seasonal farmworkers then

residing in Miami-Dade county’s largest labor

camp. One year later, those 400 units were

completely destroyed by Hurricane Andrew,

and Ms. Roqueta was responsible for helping

over 300 families move across town to the

hurricane shelter. Today, Carmen serves as

Director of Tenant Services managing 448

single-family, duplex, and townhouse apart-

ments, 66 mobile homes and 80 beds for

“unaccompanied” or “single” workers. It is a

project unmatched in its on-site services: it

has a community health center, a community

center, a 10-acre park, three childcare centers

and 10,000 square feet of neighborhood retail

space. The sense of community shared by its

nearly 2,250 residents makes it an outstanding

place to live.

Carmen Roqueta has faced tasks that few

property managers in the nation have faced.

She has twice moved over 300 families across

town as new rental housing replaced the hur-

ricane shelters. She has converted an adjacent

20-year old PHA-managed site into one that is

now physically and socially integrated into

Everglades Village. She has helped tenants

conform to new rules, new leases and new

oversight. She has leased up two new sites of

239 and 143 units. But most importantly,

Carmen is the person most responsible for

the sense of community that permeates

“Everglades Farmworker Village.” Under her

leadership, ECA set out fair and firm tenant

rules and believes migrant and seasonal farm-

workers possess the strength to meet them.

Her personal philosophy is to “manage to

families strengths not their weaknesses”

and to “manage to the hopes of 98% of

our tenants not to the cynicism of the

remaining 2%.” The results are self-evident.

Once prospective tenants were fearful of

ECA’s tough love style and rules, but today

tenants believe that firm and fair rules

make a more livable neighborhood. Current

tenants spread the word about their beloved

community and constantly recruit new

residents through a word-of-mouth

marketing campaign.

Site Managers continued from page 4

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know we also have the largest coast-to-coast network

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vinyl and tile. All of which can be purchased,

delivered and professionally installed with one simple

phone call. Make it right now. Call 1-800-524-5979

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petitive pricing, trained representatives, helpful credit

programs and centralized billing services, you’ll find

that Sherwin-Williams has really got this whole

floorcovering thing down.

Floorcovering Centers

services of a renowned expert in the Section

515 arena.

After the excitement of Monday night’s

auction, attendees welcomed Tuesday’s more

abbreviated schedule. Three sessions were

offered Tuesday morning. During “Changes in

the Tax Credit World: Business In 2003,” Rick

Goldstein, Nixon Peabody, LLP and John

Hughes, National Council of State Housing

Agencies shared with attendees the implica-

tions of the recently enacted Jobs and Growth

Tax Act of 2003 and the behind the scenes

maneuvering not to include the administra-

tion’s dividend tax proposal by CARH, a

coalition of housing groups and key members

of Congress. The possibility of another com-

prehensive tax bill this year was discussed,

as were the status of other tax proposals of

the administration, including the single-family

housing tax credit and tax proposals by

members of Congress.

“Serving Seniors: Meeting the Needs of

Older Low-Income Renters,” featured Michael

Reardon, Esq. and Kate Sullivan, Esq., both of

Nixon Peabody LLP. Like the Section 515 pro-

gram, other federal loan programs provide

financing and subsidy to house seniors.

Michael relayed some recent resyndication

transactions involving the Section 202 pro-

gram, the major seniors housing program.

Kate discussed recently revised rules which

will hopefully facilitate non-profit and for-

profit participation in the program.

Non-profit and for-profit owners continue

to grapple with preservation challenges. The

session “Preservation Activities” explored

preservation-related activities and pending

transactions. The speakers who included

Linda Goldstein, Esq., Goulston & Storrs; Pat

Sheridan, Rural Housing Service; Richard Price,

Esq., Nixon Peabody, LLP; Patrizia Bailey,

AIMCO; and Norm McCloughlin, Kitsap

County Consolidated Housing Authority,

discussed the underlying challenges they have

all experienced which unnecessarily complicat-

ed preservation transactions. In order for the

agency to begin to successfully implement

procedures that will preserve the existing port-

folio, the transfer process must be streamlined

and the agency must be willing to look at

financing options currently not in place but

are everyday practices in the real estate and

mortgage communities.

CARH’s closing luncheon at the hotel

honored the RHS 2002 National Mangers of

the Year. Unfortunately, due to the length of a

congressional hearing, Representative Robert

Ney (R. OH), Chair of the Housing and

Community Opportunity Subcommittee who

was to be one of two keynote speakers, was

not able to attend our luncheon. However, in

his place was Clinton Jones, Senior Republican

Staff to the House Financial Services

Committee. Our other keynote speaker

Representative Mike Ross (D-AK), a member

of the House Financial Services Committee

was able to attend the luncheon. Mr. Ross is

quite familiar with rural issues in that a large

section of his district and surrounding districts

are rural. He praised the site managers of the

year for their dedication to the affordable

housing industry.

From the 18,000 properties in the RHS

portfolio, each state Rural Development office

selected candidates to submit to an RHS

appointed panel, which included Lauren

Block, CARH’s Director of Marketing and

Membership Services, for consideration of the

national awards. The panel selected four

award recipients. The 2002 awards went to

the following individuals: Elderly Housing—

Brenda Witcher, Martins Landing II Apartments

(Harris Brown Management), Martinsville,

Virginia and Cathy Wortham, Windsor Place

Apartments (Sun Belt Management)

Wedowee, Alabama; Family Housing—Sherrie

Perkins, Arbor Trace Apartments, Brookhaven

Apartments, Francis Lake Apartments

(Investors Management), Lake Park, Georgia;

and Farm Labor Housing—Carmen Roqueta,

Everglades Village (Everglades Community

Association), Florida City, Florida. (See page

4 of this issue of CARH News for further

descriptions of these outstanding managers’

accomplishments.)

Despite the official conclusion of the

meeting following the luncheon, many CARH

members went to Capitol Hill and met with

their members of Congress and staff and dis-

cussed CARH’s legislative priorities, particularly

increased funding for all affordable housing

programs. In case you missed this year’s meet-

ing, the 2004 meeting will again be held at

the Ritz-Carlton, Pentagon City in Arlington,

Virginia, on June 6–8, 2004. As indicated earli-

er, our opening reception will be held at the

world famous International Spy Museum in

Washington, D.C. You will not want to miss

next year’s meeting. Mark your calendars now!

Annual Meeting continued from page 6

George Washington’s Mount Vernon estate, site of the opening reception for CARH’s annual meeting.

the SPECTRUM companiesSPECTRUM ENTERPRISES

SPECTRUM SEMINARS INC.

Compliance Monitoring, Consulting and Trainingfor the Low Income Housing Tax Credit

contact Keith Garovoy, Director

kgarovoy@spectrumlihtc.com(207) 767-8000

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CARHnewsCOUNCIL FOR AFFORDABLE AND RURAL HOUSING 121 N. Washington Street, Suite 301Alexandria, VA 22314

(703) 837-9001 voice(703) 837-8467 fax

WEB SITE http://www.carh.orgE-MAIL carh@carh.org

Address Service RequestedFirst Class Mail

Presorted First Class

U.S. PostagePAID

Permit No. 5659Merrifield, VA

PRESIDENTBetty Bridges

Third Renaissance, Inc.

VICE PRESIDENTBob Rice, RAHECrest Realty, Inc.

SECRETARYBill Shumaker

Provident Management, Inc.

TREASURERMitchell A. Copman

Classic Real Estate Systems, LLC

CHAIRMAN OF THE BOARDRobert P. Yoder, Sr., RAHE

Warrior Run Development, Inc.

PAST PRESIDENTRay Huff, RAHE

Auburn Realty

BUDGET COMMITTEE CHAIRMitchell A. Copman

Classic Real Estate Systems, LLC

EDUCATION COMMITTEE CHAIRDeneen Mulligan

Quantum Management, Inc.

HOUSING AUTHORITY COMMITTEE CO-CHAIRS

Norman McLoughlinKitsap County Housing Authority

Perry O’Malley, RAHPButler County Housing Authority

INITIATIVES COMMITTEE CO-CHAIRSMark English

E & A Services, Inc.Tom Flynn, RAHE

Flynn Management & Development Corps.

LEGISLATIVE COMMITTEE CHAIRPamela Borton, RAHE

Southwind Management Services, Inc.

MANAGEMENT COMMITTEECO-CHAIRS

Sandi SampsonSun Belt Management, Inc.

Kevin FlynnFlynn Management and Development Corps.

OWNER COMMITTEE CHAIRJim Poehlman, RAHET & C Associates, S.C.

STATE ASSOCIATION COMMITTEE CO-CHAIRS

Joe Diehl, RAHPWashington State CARH

Arrice FaughtAlabama CARH

BOARD OF DIRECTORSKatie Alitz

Boston Capital

Amy Brown, CPAFentress, Brown, CPAs & Associates, LLC

Rodney DudleyIntervest Development Corp.

Mark EnglishE & A Services, Inc.

Tashia Hale Jotar Management Services, Inc.

Mary-Heitt Doyle, RAHE National Management Corporation

Bob MargolisT.M. Associates, Inc.

Perry O’Malley, RAHP Butler County Housing Authority

Joseph G. PoehlerJoseph G. Poehler & Associates

Kenyon SaloSK Companies

Sandi Sampson Sun Belt Management, Inc.

Stephen N. Singleton Royal American Management, Inc.

Michael Sivia A. F. Evans Development

Peter Talbot Michel Associates, Ltd.

Mark ValentiValenti Held Property Management

Ex-Officio MemberTravis A. Miller

The Miller Companies

NATIONAL OFFICE STAFFEXECUTIVE DIRECTOR

Colleen M. Fisher

EXECUTIVE ASSISTANTEppie Marecheau

DIRECTOR OF MARKETING AND MEMBERSHIP SERVICES

Lauren E. Block

MEETINGS AND SPECIAL EVENTS CONSULTANT

Anne R. Stuart

GENERAL COUNSELNixon Peabody

LEGISLATIVE REPRESENTATIVERaymond K. James, Esq.

Coan & Lyons