As members will recall from a Broadcast E-mail dated August 10, 2012, CARH learned that the Administrator of the Housing and Community Facilities Programs at Rural Development (RD) decided that there will be no management fee increase for 2013. In another Broadcast E-mail dated August 30, members were informed of a letter sent by CARH and other affordable housing trade associations protesting the Administrator’s decision. CARH’s Board of Directors last week also met with the Administrator and reiterated our disappointment in this decision.

Unfortunately, RD will not reverse their decision to not increase management fees for 2013. Click here for a copy of Procedure Notice (PN) 458 dated September 24, 2012, that includes the official notice for HB-3560. Officials again indicated that the determining factors for not increasing management fees were: the error rate for the Improper Payment Information Act (IPIA) increased from 1.48 percent in Fiscal Year (FY) 2011 to 3.44 percent in FY 2012, unresolved issues found during supervisory visits and through the MFIS reporting system, and that a majority of state RD offices did not, as a result of the management fee survey, recommend an increase in fees.

During CARH’s board meeting, discussion centered on better ways for determining fees. National RD Office officials indicated that they were considering revisiting the Performance Assessment Review (PAR) approach which would include a performance add-on fee as well as deductions for non-performance of activities. As CARH members will recall, this initial PAR approach proposed in 2009 was controversial because of the deductions. The CARH board urged officials to garner input from the industry prior to this becoming the measure. CARH’s management committee will be scheduling a conference call to discuss this issue in the next several weeks. CARH will also be working with the other industry groups in an effort to garner consensus for determining fees in the future.