The Federal Housing Administration (FHA) has traditionally confined its origination, asset management, and disposition strategies to individual asset types: single family, multifamily, co-ops, etc. Increasingly, the Department is being encouraged to explore the relationship between different parts of its portfolio and across asset types so as to maximize portfolio performance and the return on the taxpayers investment. For example, to what extent do disposition strategies on the assigned single family mortgages impact the performance of the single family insurance-in-force portfolio? How do single family disposition plans affect the multifamily portfolios?
Over the years, FHA has invested substantial resources in communities through its insurance and subsidy programs. The Department thus has a strong economic interest in protecting the health of its insurance funds and reducing losses. Property dispositions and mortgage sales have typically focused only on maximizing the return on individual properties or mortgage portfolios. Anecdotal information suggests that alternate disposition strategies which contemplate the linkages between different parts of the portfolio may offer an opportunity to improve overall portfolio performance. One such strategy could include competitive offerings of multiple asset types organized around "place" . Possible structures include packaging:
"Place-based" asset sales could potentially be of particular value in maximizing the overall return to the FHA Fund in communities that are lagging economically and where FHA has a large financial investment.
"Placed-based" asset sales might include the following features:
The Department believes it can learn a great deal about optimal disposition methods from those who know best the varying aspects of FHA's portfolio, including asset type, assigned and insured mortgages and real estate owned.
In an effort to tap bidders' knowledge, for this transaction, FHA has designated special pools in three places (New Orleans, Los Angeles, and Washington D.C.- specific pool numbers are identified below). We are asking bidders on these pools, on a voluntary basis, to provide the following information on at least one of the places:
While the information above is requested on at least one of the aforementioned pools, it will not be used for the purposes of determining the winning bidder, and your submission is voluntary. Pools will be awarded solely based on a financial bid. The Department intends to use the information in developing future loan sales strategies.
The following pools have been identified as "placed-based" pools for this Single Family Loan Sale. The purpose of creating placed-based pools is to identify communities where HUD has invested a large amount of government resources and to solicit input from bidders in this loan sale as to how HUD can maximize the return on this investment, across the board, in future loan sales. Bidders in this loan sale who are bidding on any of the following pools are being asked to attach the Placed-based Survey (see the questions, above) as a part of their bid. As a result, HUD hopes to be better informed in it's structure of future asset sales. The pools which have been designated as "placed-based pools" are as follows:
In an effort to assist bidders in assessing HUD's investment in these three specific communities, the following supplemental material has been attached:
Los Angeles - Investment of Resources
Los Angeles - Assigned Single Family Properties
New Orleans - Investment of Resources
New Orleans - Assigned Single Family Properties
Washington, DC - Investment of Resources
Washington, DC - Assigned Single Family Properties
NOTE: Each map legend lists the number of properties in each category. In a couple of instances, the mapping software was unable to locate an address in it's database which specifically matched a property address. In such cases, the property was omitted from the map.
In interpreting the maps and the attached spreadsheets, the following definitions are provided:
A "place" may be a neighborhood, a zip code, a city, or even a region. The objective in defining a place is to select a geographic area where the economics of the individual properties are tightly interlinked.