Mark-to-Market and the Green Retrofit Program

In 1999, HUD selected a consulting team including The Compass Group to serve as Financial Advisor for the Permanent Mark-to-Market Program of the Office of Affordable Housing Preservation (OAHP). This consulting team has retained the Financial Advisor contract since that time, winning each subsequent re-competition. The Mark-to-Market Program was created under congressional mandate to ensure the preservation of affordable housing; reform the operation and improve the efficiency of federal rental housing assistance programs; address the problems of financially and physically troubled properties; and encourage owners to restructure loans while limiting the cost to the government of the pertinent housing and mortgage insurance programs.

The team provides OAHP with its experience in and knowledge of the pertinent areas including affordable housing programs, property market analysis, financial restructuring, business management consulting, training, economic forecasting and analysis and asset and portfolio management. Additionally, the team has developed all of the operating procedures for the program, developed and delivered training and technical assistance to staff and contractors, drafted all the legal documents that govern the program and its multi-billion dollar investments, develops oversight programs, designs financial models for restructuring guidance, and develops underwriting review protocols, portfolio stratification and workload forecasts based on rental market analyses. Compass also reviews transactions for OAHP, and Compass principals Heegaard and Wilkins have served as members of OAHP’s senior loan committee. Over the course of the Mark-to-Market program, the team will help OAHP oversee the restructuring of approximately 4,000 loans totaling about $6 billion.

In July 2007, the team helped lead the development of OAHP’s M2M Green Initiative. The Green Initiative was a nationwide pilot to encourage owners of properties undergoing financial restructuring through the M2M program to rehabilitate and operate their properties using sustainable Green Building principles, promoting energy efficiency, recycling, indoor air quality and integrated pest management. Based in part on this foundation, the client received $250M in funding through the American Recovery and Reinvestment Act of 2009, and is applying these funds through the Green Retrofit Program to enable energy and green retrofits in the multifamily assisted housing stock. Compass has been instrumentally involved in program design, and authored the financial model for these investments.

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