timely manner, or if the project is not operated in accordance with any other conditions of the sale. This remedy is in addition to any escrow of repair funds which may be required as a condition of sale or any other remedy available to HUD.

§ 290.53 Methods of disposition.

Disposition shall be through a publicly advertised competitive offering or a negotiated sale.

(a) Competitive offerings shall be by purchase proposals or by competitive bid, as recommended by the Director.

(1) A purchase proposal is a solicited submission of a plan to purchase and operate a project either without reference to price or where the price of a project is fixed by HUD in advance.

(2) When the competitive offering is by purchase proposals HUD shall review the proposals considering, among other factors which the Director deems appropriate: the acceptability of the management and ownership plan; the probability of adequate performance under the proposal; and the feasibility of the proposal in relation to the particular needs of the project and the tenants.

(3) HUD shall notify each person and entity submitting an acceptable proposal that its proposal is acceptable and request submission of an executed Contract of Sale and Purchase to HUD at a specific time and place. That Contract shall include a proposed purchase price for the project and any other information requested by HUD. HUD shall then proceed to evaluate and award the contract in the same manner as for competitive offerings by bid, provided that in the case of a clearly superior proposal such proposal may be selected if the Director makes a written determination supporting such selection.

(4) All other competitive offerings shall be by competitive bid.

(b) In selecting qualified purchasers for formerly subsidized projects by competitive bid, purchase proposal or negotiation, HUD shall establish requirements and criteria which HUD must consider in determining whether or not a proposed purchaser is qualified to own and operate the project in a manner acceptable to HUD. HUD

may establish review panels to select qualified purchasers. Regardless of which disposition method is used, in selecting a purchaser HUD shall be satisfied that sufficient levels of competency have been met with respect to:

(1) Ability to provide sound financial management;

(2) Ability to provide sound physical management;

(3) Ability to respond to the economic and social needs of the tenants and to work with resident organizations;

(4) Responsiveness of the proposed ownership plan to the needs of the tenants and the project;

(5) Aadequacy of the purchaser's organizational, staff and financial resources to implement the proposed ownership approach;

(6) Ability to satisfy all the conditions of the disposition;

(7) Any other criteria HUD determines are relevant if advance notice of such criteria is given to prospective purchasers.

(c) Negotiated Sales. (1) HUD may negotiate the sale of any project to an agency of the Federal, State or local government.

(2) HUD may negotiate the sale of a formerly subsidized multifamily housing project when HUD determines that such a sale would best meet the objectives of this part. Such negotiated sales may be recommended when:

(i) The purchaser is a nonprofit cooperative corporation formed by the present or prospective tenants for the purpose of holding title to the project;

(ii) The purchaser is a nonprofit or limited dividend entity and it is determined by HUD to be the best source of ownership in the locality capable of the successful long-term operation of the project in a way which is responsive to all the HUD requirements for operation of the project;

(iii) The project is to be converted to homeownership and individual condominium or homeownership units are to be sold; or

(iv) The purchaser is a nonprofit consumer cooperative corporation with successful experience in the operation of nonprofit housing.

(3) When an offer to purchase is received as part of a negotiated sale, it

shall be evaluated to assure that it complies with all HUD requirements for the sale of the project. Particular attention shall be paid to the financial feasibility of the proposed ownership plan.

(4) When a sale is negotiated to a nonprofit cooperative corporation or a nonprofit consumer cooperative corporation, the sales price shall be computed by determining the value of the project in one of the following ways:

(i) If the project is sold to lower income tenants without a subsidy, the value shall be the amount which can be supported by debt service payments equal to the rental income to the project operated as a nonprofit cooperative with the tenants paying 25% of :income for rent or the market rental

rate, whichever is lower, minus payments for all operating expenses, taxes and required reserves;

(ii) If the project is sold with section 8 subsidies the value shall be determined as in paragraph (c)(4)(i) of this section except that the project rents set pursuant to section 8 shall be used to determine rental income. Where appropriate (as in a partially subsidized project), a combination of the above methods may be used to determine price;

(iii) In all other cases, the value shall be the fair market value as determined by HUD.

(iv) The prepaid expenses incurred in converting to cooperative ownership may be recovered by deferring payment on the mortgage and placing project rents into an escrow for the purpose of paying those expenses or HUD may make such other provision for payment as HUD determines are reasonable and appropriate.

(d) Previous Participation Review. All purchasers of HUD-owned projects must be approved under the Previous Participation Review and Clearance procedures in 24 CFR 200.210 et seq., except Federal, State or local government agencies.

§ 290.55 Property disposition committee.

(a) There shall be a Property Disposition Committee (PDC) with authority to approve all dispositions of HUDowned multifamily housing projects.

(b) The PDC shall consist of the following officials or their designees:

(1) The Chairperson shall be the Assistant Secretary for Housing-Federal Housing Commissioner.

(2) The Deputy Assistant Secretary for Multifamily Housing Programs.

(3) The Director of the Office of Multifamily Housing Management and Occupancy.

(4) The Director of the Office of Multifamily Housing Development. (5) The General Counsel.

(6) The Deputy Assistant Secretary for Public Housing and Indian Programs.

(c) The PDC may delegate its authority to approve property dispositions to PDC's convened at the Regional or Area Office level on such terms and conditions as the PDC may prescribe.

(d) The Director of the Office of Multifamily Financing and Preservation shall serve as a non-voting member of the Property Disposition Committee and shall be responsible for presenting disposition recommendations to the Committee for its decision.

§ 300.1 Scope of chapter.

This chapter consists of general information and does not purport to set forth all of the procedures and requirements that apply to the operations of the Association. Complete specific information as to any aspect of such operations may be obtained from the regional offices listed in § 300.9.

§ 300.3 Description.

The Government National Mortgage Association (hereafter in this chapter called the Association) purchases, services, and sells mortgages insured or guaranteed by the Federal Housing Administration (FHA) and the Veterans Administration (VA), furnishes fiduciary services to itself and other departments and agencies of the Government, and guarantees privately issued securities backed by trusts or pools of mortgages or loans which are insured or guaranteed by FHA and VA and certain loans insured by the Farmers Home Administration.

§ 300.5 Creation and status.

The Association is a Government corporation in the Department of Housing and Urban Development. The origin of the Association is in the creation on February 10, 1938, under title III of the National Housing Act, of the National Mortgage Association of Washington. On April 11, 1938, its name was changed to Federal National Mortgage Association. Effective November 1, 1954, it was rechartered by the Congress as a mixed-ownership

corporation. Effective September 1, 1968, it was partitioned by the Congress into two corporations, one of which is the Association. The operations of the Association are conducted under its statutory charter contained in title III of the National Housing Act, 12 U.S.C. 1716 et seq.

§ 300.7 Area of operations.

The Association is authorized to conduct its business in any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States.

§ 300.9 Offices.

The Association directs its operations from its office located at 451 Seventh Street SW., Washington, D.C. 20414. It has made provisions for the carrying on of such operations through the Federal National Mortgage Association (FNMA). The regional offices of FNMA are listed below:

Atlanta, Ga. 30303, 34 Peachtree Street NE.: Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee.

Chicago, Ill. 60603, 1112 CommonwealthEdison Building, 72 West Adams Street: Ilinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.

Dallas, Tex. 75201, 411 North Akard Street: Arkansas, Colorado, Kansas, Louisiana, Missouri, New Mexico, Oklahoma, Texas.

Los Angeles, Calif. 90005, 3540 Wilshire Boulevard: Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, Wyoming.

Philadelphia, Pa. 19103, 5 Penn Center Plaza: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, Virgin Islands, Virginia, and West Virginia.