Performance Work Statement.pdf

SECTION II – DESCRIPTION/PERFORMANCE WORK STATEMENT: Appraiser and Underwriter Research Data to Support the Review of Map Appraisals and Rent Comparability Studies

General Description/Background HUD requires a dynamic database that is adept at meeting the varied needs of appraisers, underwriters and account executives. Our regulations and administrative procedures require HUD Multifamily staff appraisers and underwriters evaluate loan and mortgage insurance applications submitted to the Department. Multifamily is estimating it will process over $20,000,000,000 in mortgage insurance applications in the year 2020. In addition, this database will be used to confirm rents requested by owners on Section 8 Project based contracts. We require reliable and verifiable data to support determinations made on these mortgage insurance applications and Section 8 Contracts. It is of primary importance that the data is accepted by the multifamily and commercial real estate industry, as the data will be used verify data submitted by owners and lenders who used licensed appraisers and verifiable data on their applications and rent requests.

The database must be capable of determining rents and values of varied and complex multifamily and mixed-use commercial properties. Properties may range from small apartment buildings in suburbs to complex commercial properties with retail, office, townhomes, penthouses and rental apartments in major cities. The type of research required is determined by Multifamily Accelerated Processing (MAP) applications received by the Department and Rent Comparability Studies (RCSs) submitted by owners seeking to renew Project Based Section 8 Contracts. Our staff will not only evaluate the subject property in the application or Section 8 Contract renewal, but also the comparables that have been selected to support the values in their application and contract renewal requests.

I. Objectives

The objectives of the contract are to provide HUD staff with access to a database that achieve the following:

1. Provide data which allows HUD Multifamily appraisers and underwriters to determine market rents for existing Section 8 Rent contracts (Subsidized) and/or make risk-based decisions before insuring new subsidized and unsubsidized properties.

2. Provide data which is recognized by the multifamily and commercial real estate industry and is accepted by lenders and owners as reliable and verifiable. Based on research done using this database, staff may question an applicant about information on their MAP application, such as future vacancy or rent trends, or in the case of an Section 8 contract renewal, staff may question comparable property selected on the owner submitted Rent Comparability Study. HUD and HUD business partners require reliable and industry accepted data for these risk-based decisions. Specific data requirements are listed in Scope and Detailed Data Requirements of this PWS.

3. Provide real-time data (updated monthly) on demand to HUD Multifamily appraisers and underwriters to determine current market rents for existing Section 8 Rent contracts (Subsidized) and/or make risk-based decisions before insuring new subsidized and unsubsidized projects under MAP guidelines.

4. Provide appraisers and underwriters with a broad range of macro and micro data which will allow them to confirm whether accurate property attributes have been utilized in a MAP application or RCS. An example of macro data is the market trends (vacancy, rents) for a property, an example of micro data is the name and phone of sales agent on a property for sale.

5. Allow users to define research parameters. Staff shall be able to select a multifamily property, mixed used property or land and the database will provide data on similar projects that compare to it. Each comparable shall be identified on a qualitative scale which is compared to the subject property; however, the HUD users should be able select different comparable properties if it is their opinion that that there are better comparables than those generated by the database.

II. Scope

1. HUD Multifamily appraisers and underwriters require comparable data for the following property uses:

• Multifamily housing unsubsidized properties

• Land sales of properties having residential zoning or other zoning that would allow residential use

• Mixed use Retail, and Office

2. The contractor must provide a database that covers counties listed in the HUD MF Market which includes 7,418 cities in the US and US territories which are listed on the MF Market (see MF Market by City and State.pdf attachment). In the case of limited market information, individualized search is to be completed by the contractor as requested by appraiser or underwriter. All users require access to all geographic areas. A HUD staff in Boston, may evaluate an application for project San Francisco.

3. Provide Access to 20 assigned HUD staff. Staff are based in five (5) MF Regional Offices and seven (7) Satellite offices:

• Southwest Region: Fort Worth (Regional Center) and Kansas City (Regional Satellite

Office).

• Midwest Region: Chicago (Regional Center), and Detroit and Minneapolis (Regional Satellite Offices).

• Southeast Region: Atlanta (Regional Center), and Jacksonville (Regional Satellite

• Northeast Region: New York (Regional Center), and Boston and Baltimore (Regional Satellite Offices).

• West Region: San Francisco (Regional Center), and Denver (Regional Satellite

4. Data must be accessible to Twenty (20) assigned users on personal computers and HUD issued computers. Staff may work from home, in their assigned Regional or satellite office, reassigned. Reassignments are requested by the COR and typically don’t exceed 5 per year.

Licenses maybe reassigned to any of the twelve offices.

5. Staff should have the access to the data within 5 minutes of selecting their research parameters.

6. At minimum, data should update monthly.

7. Data, such as charts, graphs, photographs, and reports shall be downloadable in PDF form.

Comparative data, such as unit square footage, rents, unit types, shall be downloadable in PDF or Excel formats.

III. Detailed Data Requirements

1. Provide HUD MF 24/7 access to electronic data which is updated monthly that allows appraisers and underwriters to confirm information included in the Rent Comparability Studies (RCSs), and the Multifamily Accelerated Processing (MAP) appraisals submitted to the department and to provide additional forecasting information that allows them to further asses rents, sale data, and project risk such as current and future vacancy.

Requirements for an RCS are defined in Chapter 9 of the most current HUD Multifamily Section 8 Renewal Guide. The HUD Multifamily Section 8 Renewal Guide:

https://www.hud.gov/program_offices/housing/mfh/mfhsec8

2. Requirements of a MAP Appraisal are found in Chapter 7 of the most current MAP Guide.

The HUD MAP Guide:

https://www.hud.gov/program_offices/administration/hudclips/guidebooks/hsg-GB4430

3. Sale and rental comparable data should include photos of each property and generate maps for locating them. Available data will include not only existing completed projects but also properties that are under construction and announced/proposed projects that are anticipated to come on the market. In the case of limited data for markets or sub-markets the contractor is to provide research assistance to provide data such as comparables or market information as describes in pre-packaged reports, item 6 below.

4. Customized searches for both sale and rental comparables of multifamily properties are required. This includes searching by property address, define an area by radius, or by drawing on an interactive map that can be saved, updated and customized. Customization should allow the HUD user to delete projects which are not fully comparable and replace with projects we think better compare to the subject as well as create lists by age, unit count, condition, rents.

5. Generate in both data and graph form. While not all data need be available graph and chart, at a minimum multifamily patterns in rent growth, vacancy, sales price per unit, and capitalization rates should be available. For each of these, the data and associated graphs should provide 5-10 years of historical data, current data, and the industry standard 5-year forward projection based on what is currently under construction and anticipated completion of those properties and what demand will be based on renter household https://www.hud.gov/program_offices/housing/mfh/mfhsec8 growth, vacancy, quality, age, and other factors which assist in the HUD user evaluating the owner submitted RCS and MAP Appraisal.

6. Data for all Individual Property Research for Apartments, Retail, and Office Properties shall include the following:

• Improved Sales with Photos (exterior and interior) and Maps

• Apartment Rents & Commercial Leases with Photos and Maps

• Land Sales with Photos and Maps

7. Prepackaged Reports. These should be templates for each property or market selected so that they are easy and quick to produce. The information should update monthly at a minimum. Staff should have the access to the data within 5 minutes of selecting their research parameters. Forecasted data for market and submarket reports shall use the industry standard demographic/econometric research data and not be extrapolated from historical data. Potential vendors should provide sample reports.

Prepackaged Report #1 A report which includes market information used by underwriters to assist in the evaluation of MAP applications and appraisals. This report is for a single, existing property and shall include:

• Detailed Property Information with Photos

• Subject Unit Mix and Current Subject Rents and Vacancy Rate

• Detailed Rent Comps with Photos and Maps

• Projects Under Construction and Recent Deliveries

• Detailed Sale Comps with Photos, Maps, and Cap Rates

• Market Demographics

• Submarket Data including rents, vacancy – 5-10 years history, present data and data forecasted over the next 3 years

• Supply & Demand Trends

Prepackaged Report #2 A Rent Survey Reports for a single, existing property. These reports will be used to determine if rents requested in Section 8 Contract renewals and in MAP applications are supported by the market. The following data is the minimum requirement:

• Detailed Property Information with Photos

• Subject Unit Mix and Current Subject Rents and Vacancy Rate

• Detailed Rent Comparables with Photos and Maps

• Projects Under Construction, Recent Deliveries, and Demolitions

• Trends in Rents – 5-10 years history, present data and data forecasted over the next 3 years

• Trends in Vacancy – 5-10 years history, present data and data forecasted over the next 3 years

Prepacked Report #3 Market & Submarket Reports for Apartment, Retail and Office Markets. This report provides market trends for the both markets and submarkets as listed in the MF City and State Market attachment. The minimum data required for this report is:

• Projects Under Construction, Recent Deliveries, and Demolitions

• Market Trends in Sales broken down per unit and per square footage of the unit

• Market Trends in Rents – 5-10 years history, present data and data forecasted over the next 3 years

• Trends in Vacancy – 5-10 years history, present data and data forecasted over the next 3 years

Micro Data Search

Staff shall also be able to obtain the micro data below to confirm information submitted on applications.

This information shall be available on all properties in the database.

• Photographs of the properties

• Location on a map

• Fees and concessions which impact rent

• Address of property, including city and county, with map location

• Property assessor parcel number and parcel map, year built, last purchase date,

• Owner’s name and phone number for a comparable sale this would include both the Seller’s name and phone number and the Buyer’s name and phone number

• Lot Size and zoning for sale comparables

• Sales Price if applicable

• Financing information for sale comparables

• New Lender information for sale comparables

• Description of property improvements, includes number and types of buildings & parking,

• Detailed Property description, including types of units, size, unit mix, amenities, age, rehab dates

• Vacancy rate,

• Income description- all sources

• Detailed Expense amounts where available

• Listing agent name and phone number for sale comparables

• Sales agent name and phone number for sale comparables

• Management Agent Contact info

• Move-in cost for residents, including reoccurring costs, deposits and other

• Pet policies

• Market or subsidized and type of subsidy

• Inclusion in a relative rating scale when compared to other properties, such 1-5, with superior and inferior properties identified.

IV. Deliverables and Milestones

1. The Department requires that staff with access to the data have access 24 hours, seven days a week.

2. Training and Technical Support: The contractor is to provide guidance and training for new and existing users and to assist users in initial onboarding and navigating database. The contractor is to provide a phone accessible help desk to assist users during business hours. New users should be provided with training by a live person to assist them in learning and navigating the system.

3. At HUD’s option up to two group trainings which include all assigned users may be requested by the COR. Trainings will be virtual and at a minimum should allow all 20 assigned users to view a single computer screen, hear multiple speakers, and allow both with HUD and contractor speaking ability. Typically, trainings are accomplished using Zoom, TEAMS or a similar platform.

One is completed at the start of the FY, in October and a second training, if needed is in March.

The second training may include supervisors of the staff assigned keys. This training should accommodate up to 50 staff its purpose is to keep staff and supervisors updated with the capabilities of the product.

4. Usage Report: HUD requires two usage reports each year which provide usage in some meaningful measure such as minutes, by report, data retrieved, pages downloaded. The Report should incorporate graphs that compare usage and allow the COR to review individual and aggregate staff use monthly & year to date. Usage reports are due the first Monday in March and August. Usage report provides information on the present Fiscal year, October 1- September 30 and includes the 20 current assigned users.

V. Schedule N/A

VI. Supplementary Guidance

1. The HUD Multifamily Section 8 Renewal Guide:

https://www.hud.gov/program_offices/housing/mfh/mfhsec8 . Requirements of a RCS Appraisal are found in Chapter 9 of the most current Section 8 Renewal Guide.

2. The HUD MAP Guide:

Requirements of a MAP Appraisal are found in Chapter 7 of the most current MAP Guide.

3. Invoicing and Payments: Contractors are required to use and submit invoices after services have been received in the Invoice Process Platform (IPP) https://ipp.for.fiscal.treasury.gov/

Billing issues, questions, and invoices are to be directed to Contracting Officer or assigned

COR.

https://www.hud.gov/program_offices/housing/mfh/mfhsec8 https://ipp.for.fiscal.treasury.gov/