oversight

City of Baltimore Home Program Baltimore, Maryland

Published by the Department of Housing and Urban Development, Office of Inspector General on 2001-12-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                      U.S. Department of Housing and Urban Development
                                                                         Wanamaker Building, Suite 1005
                                                                                   100 Penn Square East
                                                                            Philadelphia, PA 19107-3380

                                                                       District Inspector General for Audit




December 21, 2001
                                                                                   Audit Memorandum
                                                                                    No. 2002-PH-1801


MEMORANDUM FOR:                 Joseph J. O’Connor, Director, Community Planning and
                                Development, Maryland State Office, 3BD




FROM:                           Daniel G. Temme, District Inspector General for Audit,
                                Mid-Atlantic, 3AGA

SUBJECT:                        City of Baltimore
                                HOME Program
                                Baltimore, Maryland


We completed a limited review of the City of Baltimore HOME Program. We performed the
review to determine whether the City is administering its HOME Program in compliance with
HUD requirements.

Generally, we found the City is administering its HOME Program in compliance with HUD
requirements. However, we did identify a number of areas where the City needs to make
improvements in its administration of the Program. Specifically, the City needs to better monitor
HOME loans and prospective program income; improve its fiscal management of HOME
administrative costs and matching funds requirements; and increase its surveillance over HOME
Program activities to ensure program objectives are met, property condition standards in assisted
rental housing units are met, and Community Housing Development Organizations are properly
certified. Details of our review can be found under the “Results of Review” section of this
memorandum.

                                           BACKGROUND

HOME provides formula grants to States and localities that fund a wide range of activities that
build, buy and/or rehabilitate affordable housing for rent or home ownership or provide direct
rental assistance to low-income people. HOME funds are allocated based on a formula to eligible
State and local governments to strengthen public-private partnerships and to expand the supply of
decent, safe, sanitary, and affordable housing for very low-income families. HOME recipients are
required to reserve at least 15 percent of their allocation to fund housing to be owned, developed,


    Visit the Office of Inspector General’s World Wide Web site at http://www.hud.gov/oig/oigindex.html
or sponsored by experienced, community-driven nonprofit groups designated as Community
Housing Development Organizations (CHDOs).

The HOME Program is authorized under Title II of the Cranston-Gonzales National Affordable
Housing Act, as amended. Title 24, Code of Federal Regulations, part 92 implements the
statutory authority to manage the HOME Program.

The City of Baltimore operates under a mayor/city council form of government and has been a
Participating Jurisdiction (a unit of local government approved by HUD to receive funding) under
HUD’s HOME Program since 1992. As such, the City receives formula based allocations of
HOME funds. The funds are administered through the City’s Department of Housing and
Community Development (DHCD). For Fiscal Years 1992 through 2000, the City of Baltimore
was authorized $69,246,000. As of August 2001, $56,449,566 has been disbursed.

The Baltimore City Board of Estimates is a City government entity that controls all City operating
and capital budget requests, including those involving housing issues. Board members, including
the Mayor, City Council President, Comptroller, Director of Public Works, and the City Solicitor
meet regularly to discuss and approve all City expenditures and policy matters valued at $5,000 or
more, including those related to the HOME Program.

Many of the HOME Program projects financed by the City of Baltimore are associated with Low-
Income Housing Tax Credit (LIHTC). The LIHTC was enacted by Congress to encourage new
construction and rehabilitation of existing rental housing for low-income households and to
increase the number of affordable rental housing units. In establishing the tax credit incentive,
Congress recognized that a private sector developer may not receive enough rental income from a
low-income housing project to cover the cost of developing and operating the project and provide
a return to investors sufficient to attract the equity investment needed for development. To spur
investment, Congress authorized the States to allocate tax credits to qualifying housing projects.
The Internal Revenue Service and State tax credit allocation agencies jointly administer the
program. After the State agencies allocate tax credits to developers, developers typically sell the
credits to private investors. The investors use the tax credits to offset taxes otherwise owed on
their tax returns. The money paid by the investors for the tax credits is paid into the projects as
equity financing.
                                              CRITERIA

According to 24 CFR 92.504(a): “The participating jurisdiction is responsible for managing the
day to day operations of its HOME Program, ensuring that HOME funds are used in accordance
with all program requirements and written agreements, and taking appropriate action when
performance problems arise. The use of State recipients, subrecipients, or contractors does not
relieve the participating jurisdiction of this responsibility. The performance of each contractor and
sub-recipient must be reviewed at least annually.”

Title 24 CFR 92.508 states each Participating Jurisdiction must establish and maintain sufficient
records to enable HUD to determine whether the Participating Jurisdiction has met the
requirements of this part.


                                                 2
Program income is defined in 24 CFR 92.2 as gross income received by the Participating
Jurisdiction directly generated from the use of HOME funds. Program income includes, among
other items, payments of principal and interest on loans made using HOME funds or matching
contributions. CPD Notice 97-9 also prescribes that a Participating Jurisdiction must be able to
identify which projects generated program income, including the amount.

Title 24 CFR 92.207 allows a Participating Jurisdiction to expend up to 10 percent of HOME
Program funds for payment of reasonable administrative and planning costs necessary to carry out
the program.

According to 24 CFR 92.504, before disbursing any HOME funds to any entity, the Participating
Jurisdiction must enter into a written agreement with that entity.

Title 24 CFR 85.36(b)(2) states Grantees and subgrantees will maintain a contract administration
system which ensures that contractors perform in accordance with the terms, conditions, and
specifications of their contracts or purchase orders.” Also, 24 CFR 85.36(c)(1) provides all
procurement actions will be conducted in a manner providing full and open competition.

According to 24 CFR 92.218 through 222, the Participating Jurisdiction is to make contributions
to housing that qualifies as affordable housing under HOME Program guidelines. During a fiscal
year, the contributions must total at least 25 percent of the HOME funds drawn from the
Participating Jurisdiction’s HOME Program account unless the Participating Jurisdiction has
received a reduction in the match requirement. CPD Notice 97-4 states that the City of Baltimore
meets the criteria for a fiscally distressed local government and allowed its matching requirement
to be reduced by 50 percent. Therefore, the City is only required to make contributions of at least
12.5 percent of its HOME fund expenditures. These matching contributions can be made as cash
contributions from non-federal sources, forbearance of fees, or as donated property.

                      OBJECTIVES, SCOPE AND METHODOLOGY

The primary objective of our review was to determine whether the Grantee administered its
HOME Program in compliance with HUD requirements. To accomplish our objective, we:

   •   Interviewed HUD Community Planning and Development and DHCD staff;

   •   Reviewed HUD automated system reports;

   •   Reviewed pertinent project records, loan agreements, and monitoring reports;

   •   Reviewed HUD HOME Program policies and procedures;

   •   Tested transactions relating to program income, administrative expenses, matching funds,
       and CHDO activity:



                                                3
   •   Reviewed a judgmentally selected sample of completed and on-going acquisition, new
       construction, and rehabilitation rental and home ownership projects;

   •   Reviewed loan agreements for all projects that were associated with Low Income Housing
       Tax Credits, and;

   •   Conducted physical inspections and tenant file reviews at selected projects.

                                   RESULTS OF OUR REVIEW

Generally, we found the DHCD is administering its HOME Program in accordance with HUD
requirements. However, our review identified four areas where the DHCD needs to improve
procedures and increase management emphasis in the administration of its Program. Specifically,
our review showed:

       1)      Loan agreements and potential HOME Program income (payment of principal and
               interest) are not monitored and tracked.

       2)      Administrative expenditures are not adequately reviewed to ensure contracts are
               (i) formally established to acquire professional services; (ii) contract rates for
               technical inspection services are within approved limits and clearly defined; and
               (iii) invoices are sufficiently reviewed prior to payment.

       3)      Matching fund requirements are not properly applied to ensure accurate
               accountability.

       4)      HOME Program activities are not sufficiently monitored to ensure projects meet
               program objectives and CHDOs are certified in accordance with local policies.

Details of these matters follow.

Loan Agreements and Program Income Were Not Monitored

Our review of HOME project activity showed the City funded eligible activities by providing
grants and loans to qualified beneficiaries to further low income rental and home ownership
opportunities. Our analyses of loan activity showed HOME funding for projects involving
LIHTC’s was provided through loans that generally required the payment of principal and
interest. HOME funds were also used to provide loans for projects not involving LIHTC’s, but
generally included debt forgiveness provisions so long as low income objectives were achieved.
Accordingly, we only reviewed loans provided in conjunction with LIHTC’s since these
agreements usually included repayment terms and likely would generate program income.




                                                4
During the period November, 1993, to August, 2001, the DHCD provided 51 HOME loans
valued at $34.9 million that financed 41 LIHTC projects. We reviewed the loan agreements and
case files for the 51 loans and determined that 48 were long term and 41 included interest-bearing
provisions1. Additionally, terms in 17 of the loans required loan payments subject to the
availability of surplus cash. When we questioned responsible DCHD personnel on how these
loans and prospective HOME Program income were managed, we were told they were not aware
of any income producing projects, and as such a loan management system had not been developed
to track and monitor loans and the payment of principal and interest, or to examine the financial
and cash status of relevant projects. DHCD officials indicated that in order to qualify for
maximum LIHTC’s, project funds generally had to be secured by a formal loan agreement.
However, in our review we identified HOME funds totaling $1.2 million that were provided in
support of 3 projects that were not fully secured by written loan agreements. Further, none of
these loans were amended to fully secure additional funds provided or additional loans for the
same project were not secured with written agreements. Officials also stated that even when loan
arrangements were made, they did not intend to collect any principal and interest and instead
would ultimately forgive the debt.

We believe HOME loans should be monitored and tracked, particularly in light of the long-term
nature of the agreements2, to ensure: loan provisions are enforced; payment of principal and
interest is properly accounted for as HOME Program income; additional funds provided to
existing projects are fully secured with written agreements; and the interests of the HOME
Program and the DHCD are protected.

Because HOME Program loans are not monitored, there are minimal assurances that the $34.9
million in principal and projected $182.6 million in potential interest for the 51 loans we reviewed
will be properly accounted for and re-programmed for HOME activities as appropriate. Further,
to protect the Program’s investment against default, additional HOME funds loaned in support of
existing projects should be properly secured with fully executed deeds of trust. Specific details
concerning the project, term, principal, interest, potential end-of-term payment amount, and
projects with loan amounts unsupported by written agreements for each of loans we reviewed are
summarized in Appendix A.

Administrative Expenses Relating to the Procurement of Services were not Adequately Reviewed

From February 1993 through May 2001, the City expended $4.8 million in HOME Program
funds for administrative costs necessary to carry out the Program. The following chart
summarizes the number of administrative transactions made and the amount of expenditures by
category:




1
  Although 41 of the 51 loans contained interest-bearing provisions, 47 required the repayment of the principal amount. Four
loans contained debt forgiveness provisions and did not require repayment of the loan amount.
2
    Loan terms ranged from 1 to 45 years.


                                                              5
                      Cost Category     Transactions         Amount
                     Direct Salary         16,472          $ 1,131,523
                     Indirect Salary           65            1,591,087
                     Other Expenses         1,508            2,069,560
                     TOTAL                 18,045          $ 4,792,170

Although our analyses of direct and indirect salary charges showed that the costs were properly
supported, our review of 163 of the 1,508 “other” administrative transactions (valued at
$1,185,092) showed the DHCD acquired professional services without formal, written
agreements. The review also showed contracts contained unauthorized and conflicting rates, and
contractors overcharged and were paid rates in excess of contracted rates. Details of these
transactions follow:

        •     We noted 18 of the 163 transactions we reviewed were payments to two different
              firms for loan and legal services not identified and formalized in written
              agreements. As a result, we reviewed all payments (totaling $506,405) to these
              two firms. During the period of February 1994 through June 2001, the DHCD
              paid $214,513 to one company for loan servicing. Also, from September 1993
              through April 2001, the DHCD paid $291,892 to another company for legal
              services.

              Although a significant number of administrative expense transactions were
              processed for these two companies, we could not find any evidence written
              agreements were established or that the services were competitively bid. DHCD
              personnel indicated formal procedures were not in place to review and evaluate
              administrative expenses that might be better obtained through a procurement
              process. Because contracts were not formally established, the nature and extent of
              the loan and legal services required by the DHCD was not documented and full
              and open competition was not fostered in obtaining these services. Consequently,
              we question whether the interests of the DHCD and HOME Program are being
              adequately protected and the services were obtained at a reasonable price.

       •      We noted 77 of the 163 transactions we reviewed were used to pay for contracted
              technical inspection services. Our review of the invoices and contract documents
              showed:

                    4 in 5 of the 77 transactions, contract rates were higher than those
                      authorized by the Board of Estimates. In June 1999, the Board of
                      Estimates authorized the DHCD to award contracts for construction
                      and rehabilitation inspection services at rates not to exceed $150 per
                      hour. In 5 of the 77 transactions we reviewed, rates were established at
                      $200 per hour, which resulted in $1,750 in overpayments.




                                              6
                     4 7 of the 77 transactions were associated with poorly written
                       agreements that contained conflicting pay rates in different sections of
                       the contract.

                     4 4 of the 77 transactions were incorrectly computed by the vendor and
                       paid by the DHCD, resulting in overcharges totaling $3,585.

              DHCD officials stated contracts and invoices were not adequately reviewed prior
              to execution and payment. Consequently, $5,335 was paid for technical inspection
              services at rates exceeding approved authorizations.

Matching Contribution Procedures Were Not Followed

In accordance with HOME Program regulations regarding Participating Jurisdiction matching
contributions, the DHCD made cash contributions obtained from the issuance of municipal bonds
and claimed as matching contributions those funds that were used to finance eligible affordable
housing projects. However, contrary to prescribed procedures, the DHCD prematurely declared
and duplicated match claims. During the period July 1996 through June 2001, the DHCD made
16 matching contribution transactions totaling $2.8 million. We analyzed these transactions and
the procedures used by responsible personnel and found in 4 of the 16 transactions, authorized
amounts exceeded expenditures by $46,114. HOME Program guidelines state that matching
contributions can only be claimed to the extent that the funds are expended. Additionally, one
transaction valued at $100,000 was claimed twice. As a result, as of June 30, 2001, the DHCD
overstated its matching contributions by $146,114. A detailed summary of the overstated
matching contribution amounts is as follows:

                                 Authorized Funding                                   Overstatement of
                Project                                                Actual Cost
                                  (Match Claimed)                                      Match Claim
          1413 Druid Hill Ave        $ 200,000 a                       $ 100,000       $ 100,000
          Osborne Payne                160,000                           134,347           25,653
          Mt. Pleasant Apts.           462,711                           445,820           16,891
          318 S. Broadway              256,652                           253,084            3,568
          Brunt Manor II               250,000                           249.998                2
          TOTAL                                                                         $ 146,114

                                a – Authorized amount of $100,000 was claimed twice



Although the DHCD had more than enough matching contributions to meet prescribed minimums,
even when taking into account the $146,114 overstatement identified during the audit, surplus
conditions may not always prevail as projects may be significantly reduced in scale or canceled.
Accordingly, the DHCD should amend matching contribution procedures and only make matching
claims when authorized funds are expended.

HOME Program Activity and CHDO Monitoring Needs Improvement




                                                           7
Based on 1999 HUD CPD performance assessments of the City’s HOME Program, the DHCD
experienced significant problems in maintaining an effective and comprehensive HOME Program
and CHDO monitoring system. According to the DHCD, resource and personnel shortages
precluded the implementation of an effective monitoring program. Further, the DHCD did not
establish formal monitoring procedures. In January 2000, the DHCD developed procedures, and
established and resourced a formal monitoring program. Our analyses of monitoring initiatives
completed through October 2001 showed that the DHCD, while experiencing some difficulties in
implementing the procedures during 2000, made much improvement in 2001. For example, of the
157 project reviews required in three monitoring areas during 2000, 51 (32 percent) were not
completed. During 2001, only 6 of 154 (4 percent) were not completed. Details are summarized
as follows:

            Summary of Project Monitoring Reviews Completed During 2000 and 2001
                                             Monitoring Reviews - 2000            Monitoring Reviews - 2001
                                                                    Not                                Not
Monitoring Area                      Required     Completed       Completed   Required   Completed   Completed


Desk Review - Rent Rolls               75             57             18         64          64           0
Housing Quality Inspections            41             21             20         45          45           0
On-Site Verification -
  Rent Rolls/Income Certifications     41             28             13         45          39           6
TOTALS                                 157            106            51         154         148          6
PERCENT                              100.00%        67.52%         32.48%     100.00%     96.10%       3.90%



While significant improvement was made in 2001, we found 6 of 154 reviews were not completed
as the DHCD waived on-site monitoring visits at projects not having documentation and
procedures to demonstrate the achievement of low-income affordability objectives. We believe
monitoring reviews should have instead been completed and used to compel project managers to
adhere to Program guidelines.

Further, our review of DHCD monitoring efforts showed the DHCD did not sufficiently monitor
CHDOs to ensure they were certified on an annual basis as required by their own HOME
guidelines. For example, as of August 2001, 5 of the 15 active CHDOs had expired certifications.

Unless more effort is dedicated to fully implement its monitoring program, the DHCD cannot be
assured HOME Program activities will meet their objectives. Although the DHCD has made
progress in establishing and implementing a HOME monitoring program, it needs to place more
emphasis on its monitoring responsibilities to ensure required project reviews are completed and
used to improve project compliance with Program objectives, and to ensure CHDOs are properly
certified.

Recommendations:

We recommend you require the City to:



                                                              8
1A.    Develop and maintain a loan management system designed to track, monitor and report
       the status of HOME Program funds loaned to eligible entities. At a minimum, ensure that
       the system maintains visibility over:

          •    Loan terms (project, principal, interest, time period, and special conditions);
          •    Prospective program income; and,
          •    Project financial status and surplus cash (when appropriate).

1B.    Strengthen procedures to ensure that all HOME Program funds loaned to eligible entities
       are fully and properly secured with written agreements. Ensure formal loan agreements are
       established with those projects identified during the audit as having been provided
       unsecured HOME Program funds.

1C.    Develop administrative cost review procedures that will allow for periodic analyses of
       expenses to make sure procurement procedures are used to the maximum extent practical.
       Ensure loan and legal service requirements, if needed, are formalized and contracts are
       competitively awarded to obtain these services.

1D.    Ensure all existing technical inspection service contracts contain rates that are within
       Board of Estimates approved thresholds and contain contract specifications that are clear
       and consistent.

1E.    Enhance invoice review procedures to ensure payments are made in accordance with
       contract rates and provisions.

1F.    Amend existing matching fund contribution procedures so that match claims are processed
       when project funds have been expended. In addition, decrease the matching contribution
       amount claimed as of June 30, 2001 by $146,114 for those projects identified during the
       audit as having less than expected expenditure amounts.

1G.    Place more emphasis on HOME project and CHDO monitoring to ensure that required
       reviews are performed and used to enforce project compliance with HOME Program
       objectives and to ensure CHDOs are annually certified.

The results of our review were discussed with DHCD and CPD officials during the review and at
an exit conference held on December 13, 2001. DHCD officials stated they agreed with the
review and have initiated actions to implement the recommendations made in this audit
memorandum. DHCD officials acknowledged their verbal concurrence with the issues and
recommendations as representative of their formal position and elected not to provide written
comments.

If you have any questions, please contact Cliff Cole, Assistant District Inspector General for Audit
at                (804)                 771-2100,                   extension                  3794.




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                                                                                                                                                               Appendix A
                         Summary of Loans Reviewed and Estimated Program Income Amounts

                                         LOAN                                                                                                                PRINCIPAL -
                          LOAN           TERM INTEREST                                                                                                     INTEREST DUE
         PROJECT         AMOUNT         (YEARS) RATE       PRINCIPAL REPAYMENT PROVISIONS             INTEREST REPAYMENT PROVISONS              DUE DATE    AT MATURITY

CHA II                     $282,000       40    1.00%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        10/31/36         $419,860
919-931 N Broadway       $1,410,000       30    1.00%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        05/31/24        $1,900,467
221-223 E Preston          $180,000       25    1.00%    Deferred Until Maturity                     Unspecified                                05/31/20         $230,838
2321-2323 Maryland Ave     $200,000       25    1.00%    Deferred Until Maturity                     Unspecified                                10/31/20         $256,486
Royalton Arms              $450,000       30    1.00%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        06/30/25         $606,532
Royalton Arms              $173,937       1              Due by June 22, 1995                                                                   06/22/95         $173,937
Johnston Square          $1,320,000       20    1.00%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        12/31/14        $1,610,651
                                                                                                     Accr/Def for 15 years, then added to
                                                                                                     principal. Then accrue and pay for 30
Maxwell I                  $180,000       45    6.25%    Repaid with Int during final 30 years       years.                                     05/31/40        $2,754,703
Maxwell II                 $532,000       20    6.13%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        12/31/15        $1,746,891


Res Hill VIII            $383,880 (a)     20    6.13%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        10/31/15        $1,260,519
                                                         Annual Payments Subject to Available Net    Annual Payments Subject to Available Net
Harford Commons            $900,000       30    1.00%    Cash Flow, Otherwise Deferred               Cash Flow, Otherwise Deferred              08/31/26        $1,213,064
                                                         Annual Payments Subject to Available Net    Annual Payments Subject to Available Net
Renaissance Plaza        $3,986,058       30    8.07%    Cash Flow, Otherwise Deferred               Cash Flow, Otherwise Deferred              02/28/27       $40,897,632
Oliver Plaza             $1,350,000       40    1.00%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        11/30/36        $2,009,966
Highlandtown Coop        $2,220,000       40    1.00%    Forgiven at Maturity                                                                   06/30/36               $0
Mt. Pleasant               $100,000       40    0.00%    Forgiven at Maturity                                                                                          $0
Mt. Pleasant               $150,000       40    0.00%    Monthly Payments                                                                       10/31/37         $150,000
                                                         Monthly Payments (described as "must
Mt. Pleasant               $400,000       40    0.00%    repay" in Deed of Trust Note)                                                          10/31/37         $400,000
                                                         Monthly Payments Subject to Available Net
Mt. Pleasant               $600,000       40    0.00%    Cash Flow, Otherwise Deferred                                                          10/31/37         $600,000
Broadway North              $50,000       40    0.00%    Forgiven at Maturity                                                                                          $0
Broadway North             $450,000       40    6.00%    Annual Payments from Surplus Cash           Annual Payments from Surplus Cash          02/28/38        $4,628,573
Bon Secours                $230,000       40    6.00%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        07/31/38        $2,365,715
Pembrooke Apartments       $270,000       40    0.00%    Deferred Until Maturity                                                                06/30/39         $270,000
                                                                                                     Accr/Def for 15 years, then added to
                                                                                                     principal. Then accrue and pay for 25
Res Hill IX                $332,000       40    6.55%    Monthly Payments                            years.                                     09/30/38        $4,200,261
                                                                                                     Accr/Def for 15 years, then added to
                                                                                                     principal. Then accrue and pay for 25
Res Hill X                 $298,000       40    6.55%    Monthly Payments                            years.                                     10/31/39        $3,770,114
Bon Secours II             $250,000       40    6.00%    Deferred Until Maturity                     Accrued and Deferred Until Maturity        11/30/39        $2,571,429
Park Heights Senior        $650,000       40    6.00%    Annual Payments from Surplus Cash           Annual Payments from Surplus Cash          05/31/39        $6,685,717
Polish Natl Alliance       $153,400       30    1.00%    Annual Payments from Surplus Cash           Annual Payments from Surplus Cash          07/31/30         $206,760


                                                                                   10
                                                                                                                                                                                            Appendix A
                                                       Summary of Loans Reviewed and Estimated Program Income Amounts
                                              LOAN                                                                                                                          PRINCIPAL -
                               LOAN          TERM INTEREST                                                                                                                INTEREST DUE
         PROJECT              AMOUNT        (YEARS) RATE             PRINCIPAL REPAYMENT PROVISIONS                INTEREST REPAYMENT PROVISONS              DUE DATE      AT MATURITY

Butcher's Row II                $306,600       30        6.00%     Annual Payments from Surplus Cash             Annual Payments from Surplus Cash             07/31/31        $1,760,954
                                                                                                                 Construct Loan period interest Accr/Def
                                                                                                                 until perm loan. All interest accrued and
Bennett House                   $250,000       40        6.00%     Deferred Until Maturity                       deferred until maturity.                      10/31/40        $2,571,429

                                                                                                                 Accr/Def for 15 years, then added to
                                                                                                                 principal. Then accrue and pay for 15
Res Hill XI                     $272,000       30        5.92%     Monthly Payments                              years.                                        04/30/30        $1,527,243
Bon Secours III                 $250,000       40        6.00%     Deferred Until Maturity                       Accrued and Deferred Until Maturity           07/31/41        $2,571,429
Park View at Coldspring         $675,000       40        1.00%     Annual Payments from Surplus Cash             Annual Payments from Surplus Cash             06/30/41        $1,004,983
C.R. Uncles Senior            $1,000,000       40        1.00%     Annual Payments from Surplus Cash             Annual Payments from Surplus Cash             06/30/42        $1,488,864
Coel-Grant-Higgs Senior       $1,300,000       40        6.00%     Annual Payments from Surplus Cash             Annual Payments from Surplus Cash             11/30/42       $13,371,433
Forest Park Senior            $1,900,000       40        1.00%     Annual Payments from Surplus Cash             Annual Payments from Surplus Cash             05/31/42        $2,828,841
                                                                                                                 Accr/Def for 20 years, then added to
                                                                                                                 principal. Then accrue and pay for 25
Res Hill XII                    $348,502       45        6.00%     Repaid with Int during final 25 years.        years.                                        08/31/46        $4,796,994
Pratt St Transitional           $639,102       40        6.00%     Annual Payments from Surplus Cash             Annual Payments from Surplus Cash             08/21/42        $6,573,623
St. Elizabeth's                 $450,000       30        1.00%     Deferred Until Maturity                       Accrued and Deferred Until Maturity           09/05/27         $606,532
Belair Elderly                $1,065,828       30        1.00%     Deferred Until Maturity                       Accrued and Deferred Until Maturity           02/06/27        $1,436,575
Hillside Park                    $45,000       40        0.00%     Forgiven at Maturity                                                                                               $0

                                                                                                                 Construct Loan period interest Accr/Def
                                                                                                                 until perm loan. Annual Payments from
Hillside Park                   $454,900       40       10.50%     Annual Payments from Surplus Cash             Surplus Cash                                  11/30/38       $24,683,518
Hillside Park                $354,331 (a)                                                                                                                                       $354,331
                                                                                                                 Construct Loan period interest Accr/Def
                                                                                                                 until perm loan. Annual Payments from
Druid House Transitional        $404,768       40        6.25%     Annual Payments from Surplus Cash             Surplus Cash                                  05/31/40        $4,574,712

                                                                   Annual Payments from Available Net Cash       Annual Payments from Available Net Cash
Eutaw Place                     $606,593       40        8.01%     Flow                                          Flow                                          11/30/36       $13,226,838

                                                                   Annual Payments from Available Net Cash       Annual Payments from Available Net Cash
Eutaw Place                   $1,433,407       40        8.01%     Flow                                          Flow                                          11/30/36       $31,255,623

                                                                   Annual Payments from Available Net Cash       Annual Payments from Available Net Cash
Esplanade Apartments          $2,590,000       30        6.33%     Flow                                          Flow                                          11/30/25       $16,329,549
Bon Secours at Liberty          $400,000       30        6.00%     Deferred Until Maturity                       Accrued and Deferred Until Maturity           12/31/30        $2,297,396
Bowley's Lane                   $800,000       30        1.00%     Deferred Until Maturity                       Accrued and Deferred Until Maturity           02/28/28        $1,078,279
Bowley's Lane                $762,708 (a)                                                                                                                                       $762,708
Burdol (Burleith)               $473,119       30        1.00%     Deferred Until Maturity                       Accrued and Deferred Until Maturity           04/30/28         $637,693
Burdol (Dolfield)               $626,881       30        1.00%     Deferred Until Maturity                       Accrued and Deferred Until Maturity           04/30/28         $844,941
TOTAL                        $34,910,014                                                                                                                                     $217,514,603

                           (a) = Additional HOME funding provided that was not secured with a fully executed deed of trust
                                                                                                                       11
                                                                                 Appendix B


Distribution

Director, Community Planning and Development, Maryland State Office, 3BD
Secretary’s Representative, Mid-Atlantic, 3AS
Special Agent in Charge, 3AGI
DIGA’s
Audit Liaison Officer, 3AFI
Departmental Audit Liaison Officer, FM (Room 2206)
Deputy Chief Financial Officer for Finance, FF (Room 2202)
Director, Office of Budget, FO (Room 3270)
Acquisitions Librarian Library, AS (Room 8141)
Principal Staff
Secretary’s Representatives
The Honorable Fred Thompson, Chairman, Committee on Governmental Affairs, 340 Dirksen
       Senate Office Building, US Senate, Washington, DC 20510
The Honorable Joseph Lieberman, Ranking Member, Committee on Governmental Affairs, 706
       Hart Senate Office Building, US Senate, Washington, DC 20515
Ms. Cindy Fogleman, Subcommittee on Oversight and Investigations, Room 212, O’Neil House
       Office Building, Washington, DC 20515
Director, Housing and Community Development Issue Area, US GAO, 441 G Street, N.W.,
       Room 2474, Washington, DC 20548, Attn: Stanley Czerwinski
The Honorable Dan Burton, Chairman, Committee on Government Reform, 2185 Rayburn
       Building, House of Representatives, Washington, DC 20515
The Honorable Henry Waxman, Ranking Member, Committee on Government Reform, 2204
       Rayburn Building, House of Representatives, Washington, DC 20515
Ms. Sharon Pinkerton, Deputy Staff Dir, Counsel, Subcommittee on Criminal Justice, Drug
       Policy and Human Resources, B373 Rayburn House Office Building, Wash, DC 20515
Mr. Steve Redburn, Chief, Housing Branch, Office of Management & Budget, 725 17th Street,
       N.W., Room 9226, New Executive Office Building, Washington, DC 20503
Mr. Andrew R. Cochran, Senior Counsel, Committee on Financial Services, U.S. House of
       Representatives, 2129 Rayburn House Office Building, Washington, DC 20515
Mr. Armando Falcon, Director, Office of Federal Housing Enterprise Oversight, 1700 G Street,
       N.W., Room 4011, Washington, DC 20552
Mr. James R. Majors, Chief, Multi-Family Commercial Development, Department of Housing and
       Community Development, 417 East Fayette Street, Suite 1036, Baltimore, MD 21202




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