WASHINGTON -- HUD's new guidelines for making sure subsidized housing deals don't generate excessive profits are flawed because they provide no criteria for reviewing tax-exempt bond projects and do not permit state agencies to review the deals, industry officials and lawyers say.

"The substance of the guidelines is clearly geared to low-income housing tax credit properties and we do not understand" how the guidelines would be applied to bond-financed projects and others that do not receive housing credits, said the law firm of Peabody & Brown in written comments to the Department of Housing and Urban Development.

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