Single Family and Commercial Model Validation

Notice Type: Sources Sought Notice

Posted Date: 08-JAN-18

Office Address: Department of Housing and Urban Development; OCPO, Office of Support Operations; Office of Support Operations, NO; 451 7th Street S.W. Washington DC 20410

Subject: Single Family and Commercial Model Validation

Classification Code: B - Special studies and analysis - not R&D

Solicitation Number: SSH20180070

Contact: diane toledo-gaskins, Phone 2024024140, Email [email protected]

Setaside: N/AN/A

Place of Performance Country: US

Description: Department of Housing and Urban Development

OCPO, Office of Support Operations

Office of Support Operations, NO

THIS IS A SOURCES SOUGHT NOTICE ONLY. SSH20180070 This is not a request for offers, quotes or proposals. This notice does not represent a commitment by the Government to issue a solicitation or award a contract. This is a market research tool only to determine the capability of potential sources. This is a SOURCES SOUGHT NOTICE to determine the availability and capability of qualified small businesses (including certified 8(a), Small Disadvantaged, HUBZone firms; Veteran and Service-disabled Veteran-owned Small Businesses, Women-owned Small Businesses and Economically Disadvantaged Women-owned Small Business (EDWOSB) to provide annual validation of Single Family Models and Commercial Models. This is not a request for offers, quotes or proposals. This notice does not represent a commitment by the Government to issue a solicitation or award a contract. This is a market research tool only to determine the capability of potential sources. The Department of Housing and Urban Development (HUD), Office of Risk Management and Regulatory Affairs (ORMRA), Federal Housing Administration (FHA), is to annually validate the financial/actuarial models. 12 USC 1708(a) (4) states that the purpose of the independent actuarial study is to analyze the financial position of the following critical financial/actuarial models:

1. TASK A, the Mutual Mortgage Insurance Fund (MMIF), and 2. TASK B, the General Insurance and Special Risk Insurance (GI/SRI) account. 1. Annual validation of different types of Single Family Models, The intended uses of the Single-Family models to be validated are to: * Estimate FHAs liability for loan guaranty for the forward and HECM programs for FHAs financial statements; * Estimate selected elements of the Mutual Mortgage Insurance Fund capital ratio; * Develop budget estimates (credit subsidy rates and volume) and re-estimates; and, * Estimate principal limit factors for Home Equity Conversion Mortgage. 2. Annual validation of different types of Commercial Models. The intended uses of the commercial models to be validated are to: * Estimate FHAs liability for loan guaranty for the commercial loans for FHAs financial statements; * Develop budget estimates (credit subsidy rates and volume) and re-estimates

TASK A - SINGLE FAMILY (MMIF)

The MMIF is a group of accounts of the federal government in which transactions associated with FHAs guarantee programs for single family mortgages are recorded. FHA currently insures roughly 8 million forward mortgages with insurance-in-force of $1.1 trillion and 600,000 reverse mortgages with $112 billion in insurance-in-force under the Home Equity Conversion Mortgage (HECM) program. The intended uses of the SINGLE-FAMILY models to be validated are to: A. Estimate FHAs liability for loan guaranty for the forward and HECM programs for FHAs financial statements; B. Estimate selected elements of the MMIF capital ratio; C. Develop budget estimates (credit subsidy rates and volume) and re-estimates; and, D. Estimate principal limit factors for HECM. SINGLE FAMILY models serve these four purposes: (1) The forward mortgage insurance model is used to estimate the forward liability for loan guaranty, the forward elements of the MMIF capital ratio, forward budget re-estimates and the credit subsidy elements of budget development. (2) The forward volume model is used to generate the size and composition of each budget cohort. (3) The HECM mortgage insurance model is used to estimate the HECM liability for loan guaranty, the HECM elements of the MMIF capital ratio, HECM budget re-estimates and the credit subsidy elements of budget development. (HECM volume is projected to change in with the age eligible population. The composition of HECM budget cohorts reflects the composition of recent books of business.) (4) The HECM Principal Limit Factor (PLF) model is used to calculate principal limit factors by borrower age and interest rate.

TASK B - COMMERCIAL (GI/SRI)

The GI/SRI is a group of accounts of the federal government in which transactions associated with FHAs guarantee programs for Multifamily, Hospital, and Nursing Home/Assisted Living/Board & Care facilities mortgages are recorded. FHA currently insures roughly 14,000 commercial mortgages with insurance-in-force of $100 billion in insurance-in-force.

The intended uses of the commercial models to be validated are to:

A. Estimate FHAs liability for loan guaranty for the commercial loans for FHAs financial statements; B. Develop budget estimates (credit subsidy rates and volume) and re-estimates. The following TASK B - COMMERCIAL models serve these purposes:

FHA applies three different types of modeling frameworks to the commercial (multifamily and healthcare) portfolios: I. Logistic Regression Models II. Financial Simulation Model III. Monte-Carlo Simulation Model

Within the logistic regression models, there are various sub-models. The differences between the sub-models are the variables and the types of loans or Risk Categories specified for each equation. But they are all structurally the same type of model, just with different variables. The list of the model categories and the sub-categories are: I. Logistic Regression Models 1. Multifamily Apartment Claim Model i. Unassisted New Construction/Substantial Rehabilitation Default Model ii. Unassisted Refinance Default Model iii. Assisted New Construction/Substantial Rehabilitation and Refinance Default Model iv. Claim Transition Model 2. Multifamily Apartment Prepayment Models v. Unassisted New Construction/Substantial Rehabilitation Prepayment Model vi. Unassisted Refinance Prepayment Model vii. Assisted New Construction/Substantial Rehabilitation and Refinance Prepayment Model 3. Residential Care Facilities (Nursing Home/Assisted Living/Board & Care facilities) Models viii. Section 232 New Construction/Substantial Rehabilitation Claim Model ix. Section 232 Refinance Claim Model x. Section 232 New Construction/Substantial Rehabilitation Prepayment Model xi. Section 232 Refinance Prepayment Model 4. Hospital Loan Prepayment Model xii. Section 242 Prepayment Model II. Hospital Loan Financial Simulation Model xiii. Section 242 Claim Model III. Monte-Carlo Simulation Model Stochastic Simulation Model with data input from all the previous models.

Capability statements must address at least two prior contracts that reflect similar type and scope of work and the number of concurrent staff resources available. The anticipated period of performance is a base period through 12 months plus 4 option periods. The NAICS Code is 523920. The small business size standard is 1000 employees. Interested small business offerors are encouraged to respond to this notice. However, be advised that generic capability statements are not sufficient for effective evaluation of respondents' capacity and capability to perform the specific work as required. Response must directly demonstrate the company's capability, experience, and/or ability to marshal resources to effectively and efficiently perform each of the tasks described above in sufficient level of detail to allow a definitive response; and evidence that the contractor can satisfy the minimum requirements listed above in compliance with FAR 52.219-14 ("Limitations of Subcontracting"). Failure to definitively address each of these tasks will result in a finding that respondent lacks capability to perform the work. Responses to this notice shall be limited to ten pages, and must include: 1. Company name, mailing address, e-mail address, telephone and FAX numbers, website address (if available), and the name, telephone number, and e-mail address of a point of contact having the authority and knowledge to clarify responses with Government representatives. 2. Name, title, telephone number, and e-mail addresses of individuals who can verify the demonstrated capabilities identified in the responses. 3. Business size for NAICS XXXX (size standard $ or number of employees) and status, if qualified as an 8(a) firm (must be certified by SBA), Small Disadvantaged Business (must be certified by SBA), Woman-Owned Small Business, HUB Zone firm (must be certified by SBA), and/or Service-Disabled Veteran-Owned Small Business (must be listed in the Verbize Vendor Information Pages). 4. DUNS number, CAGE Code, Tax Identification Number, and company structure (Corporation, LLC, partnership, joint venture, etc.). Companies also must be registered in the Central Contractor Registry (SAM, at http://www.SAM.gov [www.SAM.gov]) to be considered as potential sources. 5. Identification of the firm's GSA Schedule contract(s) by Schedule number and contract number and SINs that are applicable to this potential requirement are also requested. 6. If the company has a Government approved accounting system, please identify the agency that approved the system. Please submit copies of any documentation such as letters or certificates to indicate the firm's status (see item #3, above) Teaming arrangements are acceptable, and the information required above on the company responding to this announcement, should also be provided for each entity expected to be teammates of the respondent for performance of this work. To the maximum extent possible, please submit non-proprietary information. Any proprietary information submitted should be identified as such and will be properly protected from disclosure. This notice is for planning purposes only, and does not constitute an Invitation for Bids, a Request for Proposals, a Solicitation, and a Request for Quotes, or an indication the Government will contract for the items contained in this announcement. This request is not to be construed as a commitment on the part of the Government to award a contract, nor does the Government intend to pay for any information submitted because of this request. The Government will not reimburse respondents for any cost associated with submission of the information being requested or reimburse expenses incurred to interested parties for responses to this announcement. Responses to this announcement will not be returned, nor there any ensuing discussions or debriefings of any responses. However, information obtained because of this announcement may be reflected in the subsequent solicitation, and HUD, OCPO may contact one or more respondents for clarifications and to enhance the Government's understanding. This announcement is Government market research, and may result in revisions in both its requirements and its acquisition strategy based on industry responses. RESPONDENTS MUST SUBMIT CAPABILITY STATEMENTS VIA E-MAIL to Diane Toledo-Gaskins at [email protected] no later than January 19, 2018 at 12:00 PM Eastern Standard Time for consideration.

Link/URL: https://www.fbo.gov/spg/HUD/NO/NO/SSH20180070/listing.html