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5.10 Standard Processing for Section 223(a)(7) and 223(f)

HUD Multifamily Accelerated Processing (MAP) Guide, HUD Handbook 4430.G (2020 ed., rev. Mar. 19, 2021) · 2026 edition · updated 2026-07-29 · United States

A. The previous instructions in this Chapter apply to projects insured pursuant to Section 223(a)(7) and 223(f) for repairs and alterations, except as modified below.

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Chapter 5 Architectural and Construction Analysis 5.10 Standard Processing for Section 223(a)(7) and 223(f)

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▸ Contents — HUD Multifamily Accelerated Processing (MAP) Guide, HUD Handbook 4430.G (2020 ed., rev. Mar. 19, 2021)
HUD Multifamily Accelerated Processing (MAP) Guide, HUD Handbook 4430.G (2020 ed., rev. Mar. 19, 2021)
  1. Revision March 19, 2021 Office of the Assistant Secretary for …
  2. Table of Contents
  3. Index
  4. Chapter 1 Introduction
  5. 1.1 Multifamily Accelerated Processing Guide
  6. 1.2 Purposes of MAP
  7. 1.3.1 Lender Qualifications and Monitoring
  8. 1.3.2 Programs Covered by MAP
  9. 1.3.3 Application Processing
  10. 1.3.4 Construction Responsibilities
  11. 1.3.5 Servicing
  12. 1.4 Regulations, Policies, and the MAP Guide
  13. 1.5 Workload Management
  14. Chapter 2 Lender Qualifications and Practices
  15. 2.1 Introduction
  16. 2.2 HUD Approval of Lenders
  17. 2.3 Lender Standards
  18. 2.4 Loan Consultants, Correspondents, or Mortgage Brokers
  19. 2.5 Underwriting and Construction Administration 2.5.1 Underwr…
  20. 2.5.2 Construction Administrator Duties
  21. 2.5.3 Underwriting and Construction– HUD’s Role
  22. 2.5.4 Electronic Communications
  23. 2.6.1 Introduction
  24. 2.6.2 Definitions
  25. 2.6.3 Identity of Interest - General
  26. 2.6.4.1 Lender Owned FHA-Insured Properties
  27. 2.6.4.2 Secondary Financing Relationships
  28. 2.6.4.3 Bridge Loans and Balance Sheet Loans
  29. 2.6.4.4 Lenders with Tax Credit Equity Affiliates
  30. 2.6.4.5 Lender’s Consultants, Correspondents, or Mortgage Brok…
  31. 2.6.4.6 Other Lender Conflicts
  32. 2.6.4.7 Prohibited Practices - Inducements
  33. 2.6.4.8 Prohibited Practices - Gifts
  34. 2.6.4.9 Prohibited Practices - Charitable Donations
  35. 2.6.5.1 In General
  36. 2.6.5.2 IOI Discovered Before Processing
  37. 2.6.5.3 IOI Discovered During Processing
  38. 2.6.5.4 IOI Discovered After Firm Commitment
  39. 2.6.6 Certification
  40. 2.6.7 Syndicator or Investor Influence
  41. 2.7 New MAP Lender Application Package
  42. 2.8 Limitations and Notices
  43. 2.9 Quality Control, Records and Monitoring
  44. 2.10 Underwriters – HUD Approval
  45. 2.10.1 MAP Underwriters
  46. 2.10.2 Chief Underwriters
  47. 2.10.3 Deputy Chief Underwriters
  48. 2.11 Underwriter Trainees
  49. 2.12 MAP Underwriter Transfers
  50. Chapter 3 Programs
  51. 3.1 General Program Requirements
  52. 3.1.1 Regulatory Agreement
  53. 3.1.2 Single Asset Mortgagor Entity
  54. 3.1.3 Non-Recourse
  55. 3.1.4 Interest Rate
  56. 3.1.5 Amortization Plan
  57. 3.1.6 Loan Terms
  58. 3.1.7 Prepayment Restrictions
  59. 3.1.8 HUD Application Fee
  60. 3.1.9 HUD inspection Fee
  61. 3.1.10 Mortgage Insurance Premium
  62. 3.1.11 Lender Fees and Charges
  63. 3.1.12 Definition of Affordable Housing
  64. 3.1.13 Fair Housing and Equal Opportunity
  65. 3.1.14 Previous Participation
  66. 3.1.15 HUD's Fiscal Procedures
  67. 3.1.16 Bridge or Gap Financing
  68. 3.1.17 Secondary Financing
  69. 3.1.18 Statutory Loan Limits
  70. 3.1.19 Tax Increment Financing
  71. 3.1.20 Commercial Space
  72. 3.1.21 Military Impacted Areas
  73. 3.1.22 Student Housing
  74. 3.1.23 Real Estate Requirements
  75. 3.1.24 Transient Housing/Hotel Services Prohibition
  76. 3.1.25 Sustaining Occupancy
  77. 3.1.26 Operating Deficit
  78. 3.1.27 Short-Term Lease Premiums
  79. 3.1.28 Replacement Reserve
  80. 3.1.29 Developer Fees
  81. 3.1.30 Scattered Sites
  82. 3.1.31 Condominiums
  83. 3.1.32 Environmental Review
  84. 3.1.33 Underwritten Vacancy and Collection Loss
  85. 3.1.34 Borrower’s Certifications
  86. 3.1.35 Waivers
  87. 3.1.36 Opportunity Zones
  88. 3.2 New Construction/Substantial Rehabilitation Program Requir…
  89. 3.2.1 Properties
  90. 3.2.2 Insurance for Construction and Permanent Loan Periods
  91. 3.2.3 New Construction Transactions
  92. 3.2.4 Substantial Rehabilitation Transactions
  93. 3.2.5 Cost Certification
  94. 3.2.6 Federal Labor Standards
  95. 3.2.7 Assurance of Completion
  96. 3.2.8 Absorption Period
  97. 3.2.9 Marketing and Leasing Plan
  98. 3.2.10 Working Capital Escrow
  99. 3.2.11 Furniture, Fixture, and Equipment in Cost Basis
  100. 3.2.12 Elderly Developments
  101. 3.2.13 Occupancy Preference
  102. 3.2.14 Builder and Sponsor Profit and Risk Allowance (BSPRA)
  103. 3.2.15 Energy Efficiency
  104. 3.2.16 Cost vs. Value
  105. 3.3 Section 221(d)(4)–New Construction and Substantial Rehabil…
  106. 3.3.1 Criterion 1
  107. 3.3.2 Criterion 3
  108. 3.3.3 Criterion 4
  109. 3.3.4 Criterion 5
  110. 3.4 Section 220 Mortgage Insurance for Redevelopment Areas
  111. 3.4.1 Eligible Areas
  112. 3.4.2 Commercial Facilities
  113. 3.4.3 Maximum Loan Ratios and DSCRs
  114. 3.4.4 Builder and Sponsor Profit and Risk Allowance (BSPRA)
  115. 3.4.5 Sponsor Profit and Risk Allowance (SPRA)
  116. 3.4.6 Age Restriction Prohibited
  117. 3.5 Section 231 Mortgage Insurance
  118. 3.5.1 Definitions
  119. 3.5.2 Design and Amenities
  120. 3.5.3 BSPRA or SPRA allowances
  121. 3.5.4 Maximum Loan Ratios and DCRs
  122. 3.6.1 Eligibility
  123. 3.6.2 Term
  124. 3.6.3 Equity Requirement and Controlling Mortgage Criteria
  125. 3.6.3.1 Criterion 3–Loan to Value/Cost
  126. 3.6.3.2 Criterion 4–Statutory Limits
  127. 3.6.3.3 Criterion 5–Debt Service Coverage Ratio (DSCR)
  128. 3.6.4 CNAs, Plans and Cost Estimates
  129. 3.6.5 Davis-Bacon Act Applicability
  130. 3.6.6 Insurance of Advances or Insurance upon Completion
  131. 3.6.7 Environmental Review
  132. 3.6.8 Working Capital and Operating Deficit Reserves
  133. 3.6.9 Management Exhibits
  134. 3.6.10 Multiple Lenders
  135. 3.6.11 MIP
  136. 3.7.1 General Requirements
  137. 3.7.2 Eligible Properties
  138. 3.7.3 Ineligible properties
  139. 3.7.4 Additional Section 223(f) Requirements
  140. 3.7.5 Repairs
  141. 3.7.6 Accessibility Requirements
  142. 3.7.7 Age Restricted Projects
  143. 3.7.8 Defaults, Claims, or Enforcement Referrals
  144. 3.7.9 Labor Standards
  145. 3.7.10 Prepayment Provisions and Prohibition
  146. 3.7.11 Maximum Loan and Debt Service Coverage Ratios (DSCR)
  147. 3.7.11.1 Section 223(f) Refinance and Acquisition Processing
  148. 3.7.12 For Cash Out/Equity Out Proceeds When Repairs are Defer…
  149. 3.7.13 Capitalization Rates and Determination of Value
  150. 3.7.14 Statutory Loan Limits
  151. 3.7.15 Cost Not Attributable to Dwelling Space
  152. 3.7.16 Reserve for Replacements (RfR)
  153. 3.7.17 Secondary Financing
  154. 3.7.18 Commercial Space
  155. 3.7.19 Real Estate Requirements
  156. 3.7.20 Mortgage Term
  157. 3.7.21 Firm Commitment Processing Only
  158. 3.7.22 Market Study
  159. 3.7.23.1 Discounts and/or Costs of Issuance
  160. 3.7.23.2 Defeasance Costs Associated with Underlying Bond Fina…
  161. 3.8 Section 223(a)(7) Refinancing
  162. 3.8.1 Eligibility
  163. 3.8.2 Terms
  164. 3.8.3 Controlling Mortgage Criteria
  165. 3.8.4 Lender Fees
  166. 3.8.5 Borrower Fees
  167. 3.8.6 CNA
  168. 3.8.7 Other Issues
  169. 3.9.1 Insurance During Construction
  170. 3.9.2 Permanent Insurance
  171. 3.9.2.1 Public Liability Insurance
  172. 3.9.2.2 Vehicle Liability Insurance
  173. 3.9.2.3 Flood insurance
  174. 3.9.2.4 Casualty Insurance
  175. 3.9.3 Other Insurance Requirements
  176. 3.10.1 Purpose
  177. 3.10.2 Underwriting Ratios for Large Loans
  178. 3.10.3 Increased Reserves for Large Loans
  179. Loan size Reserve amount shall be the greater of
  180. 3.10.4 Extended Lease-Up Period
  181. 3.10.5 Higher Net Worth and Liquidity
  182. 3.11.1 Restrictions Authorized by Statute
  183. 3.11.1.1 Restrictions Allowed by HUD Statutory Authority
  184. 3.11.1.2 Housing for Persons Age 55+ (55+ Exemption)
  185. 3.11.1.3 Housing Restricted to Persons Age 62+
  186. 3.11.1.4 Other Fair Housing Act Exemptions
  187. 3.11.2 Age Restriction in Certain Projects and Programs
  188. 3.11.2.1 Market Rate Projects
  189. 3.11.2.2 Affordable Projects and 55+ Exemption
  190. 3.11.2.3 Section 231 Projects, both Market Rate and Affordable…
  191. 3.11.3.1 Services
  192. 3.11.3.2 Meals Service Exceptions
  193. 3.11.3.3 Prohibition on Founder’s Fees
  194. 3.11.3.4 Guest Suites
  195. 3.12.1 Relocation-General
  196. 3.12.2 Projects with Federal Assistance
  197. 3.12.3 Projects with No Federal Assistance
  198. 3.12.4 Relocation Costs on HUD Forms
  199. Chapter 4 Application Processing
  200. 4.1 Introduction/General
  201. 4.1.1 Approval of Lender's Reviewers
  202. 4.2.1.1 Concept Meetings
  203. 4.2.1.2 HUD Response
  204. 4.2.1.3 Firm Commitment Application Submissions
  205. 4.2.1.4 Firm Commitment Issuance
  206. 4.2.1.5 Firm Commitment Acceptance and Rate Lock
  207. 4.2.1.6 Closing
  208. 4.2.2.1 Concept Meetings
  209. 4.2.2.2 Pre-Application Stage
  210. 4.2.2.3 Invitation Letters
  211. 4.2.2.4 Firm Commitment
  212. 4.2.2.5 Closing
  213. 4.2.2.6 Construction Period
  214. 4.2.3 Appeals
  215. 4.3.1 General Requirements
  216. 4.3.2 Processing
  217. 4.4.1 General Requirements
  218. 4.4.2 Processing
  219. 4.4.3 Construction Period Responsibilities
  220. 4.4.4 Servicing
  221. Chapter 5 Architectural and Construction Analysis
  222. 5.1 Eligible Construction Activities
  223. 5.1.1 New Construction
  224. 5.1.2 Substantial Rehabilitation
  225. 5.1.3 Class of Work
  226. 5.1.4 Defining Construction Activities
  227. 5.1.5 Eligible Construction by Program
  228. 5.2 Consultant Due Diligence Responsibilities
  229. 5.2.1 General
  230. 5.2.2.1 Needs Assessor Qualifications
  231. 5.2.2.2 Needs Assessor Responsibilities
  232. 5.2.2.3 Construction Analysts Qualifications
  233. 5.2.2.4 Construction Analyst Responsibilities
  234. 5.2.3.1 Project Architect Qualifications
  235. 5.2.3.2 Project Architect Duties and Responsibilities
  236. 5.2.3.3 Owner-Architect Agreement for Services
  237. 5.2.3.4 Project Architect as Owner’s Representative
  238. 5.2.4 Other Technical Specialists
  239. 5.2.5 HUD Approval of Qualifications
  240. 5.3 Requirements by Construction Activity and Program
  241. 5.3.1 General
  242. 5.3.2.1 Scope of Work
  243. 5.3.2.2 Construction Costs
  244. 5.3.2.3 Schedule
  245. 5.3.3.1 When Project Architects are Required
  246. 5.3.3.2 When General Contractors are Required
  247. 5.3.3.3 Licensed Trades
  248. 5.3.3.4 Scope of Work
  249. 5.3.3.5 Construction Costs
  250. 5.3.3.6 Schedule
  251. 5.3.4.1 Scope of Work
  252. 5.3.4.2 Construction Costs
  253. 5.3.4.3 Schedule
  254. 5.4 Architectural and Other Building Standards
  255. 5.5.1 New Construction and Substantial Rehabilitation
  256. 5.5.2 Section 223(f) Transactions
  257. 5.6.1 Eligibility for Streamlined Processing [12]
  258. 5.6.2 Section 223(f) with new LIHTC Applications
  259. 5.6.3 Documentation at Firm Commitment
  260. 5.6.4 Requirements for Issuing a Firm Commitment
  261. 5.6.5 Modifications to the Firm Commitment
  262. 5.6.6 Risks Related to Deferred Document Submission
  263. 5.7.1 Concept Meeting
  264. 5.7.2 Pre-Application
  265. 5.7.3 Firm Commitment Application
  266. 5.7.4 Special Considerations for Industrialized Housing
  267. 5.8.1 Plans and Specifications Revisions
  268. 5.8.2 Major Changes
  269. 5.8.3 Construction Documents
  270. 5.8.4 Recommendation for Initial Endorsement
  271. 5.8.5 Distribution of Drawings and Specifications
  272. 5.8.6 Early Start of Construction
  273. 5.9 Substantial Rehabilitation Processing through Initial Endo…
  274. 5.9.1 Concept Meeting
  275. 5.9.2 Pre-Application
  276. 5.9.3 Firm Commitment Application
  277. 5.9.4 Firm Commitment to Initial Endorsement
  278. 5.10 Standard Processing for Section 223(a)(7) and 223(f)
  279. 5.10.1 Architectural Standards
  280. 5.10.2 Concept Meetings
  281. 5.10.3 Capital Needs Assessment
  282. 5.10.4 Lender’s Review of Costs
  283. 5.10.5 Certification
  284. 5.10.6 Firm Commitment
  285. 5.10.7 Time for Completion of Repairs
  286. 5.10.8 Escrow Agreement for Deferred Repairs
  287. 5.10.9 Completion of Repairs and Alterations
  288. 5.11.1 Supplemental Loan for New Construction
  289. 5.11.2 Supplemental Loan for Existing Structures
  290. 5.12 Cost Estimating for Lenders
  291. 5.12.1 Estimation Method
  292. 5.12.2 Cost Categories
  293. 5.12.3 Allowances and Fees
  294. 5.12.4 Builder’s and Sponsor’s Profit and Risk Allowance (BSPRA)
  295. 5.12.5 Construction Time
  296. 5.13 CNAs are Required for All Applications
  297. 5.14.1 Detailed Cost Estimate
  298. 5.14.2 Substantial Rehabilitation Costs
  299. 5.14.3 Refinance/Acquisition Costs
  300. 5.15.1 HUD Underwriting Assignment
  301. 5.15.2 CNA e-Tool and HUD Underwriting
  302. 5.15.3 Instructions and Training for Users
  303. 5.15.4 Consultation and Review Timeliness
  304. Chapter 6 Energy and Water Conservation
  305. 6.1 Purpose and Summary Requirements
  306. 6.1.1 New Construction and Substantial Rehabilitation Standards
  307. 6.1.2 Incentives for Improved Building Performance
  308. 6.2 Statutes and Regulations
  309. 6.3 Green Building Certifications Specifications Recognized fo…
  310. 6.3.1 New Construction and Substantial Rehabilitation Certific…
  311. 6.3.2 Certifications for Existing Buildings
  312. 6.3.3 Certifications Not Recognized by HUD
  313. 6.4 General Requirements for Green MIP
  314. 6.4.1 Continuing Performance Required under Green MIP
  315. 6.4.2 ENERGY STAR® Appliances and High-Performance Components
  316. 6.4.3 HUD Forms – Borrower’s Certifications
  317. 6.4.4 Regulatory Agreement Rider 5 Required for Green MIP
  318. 6.4.5 Data Collection Plan
  319. 6.4.6 Real-Time Consumption Monitoring, Smart Home Tools
  320. 6.4.7 Design and Construction Team Qualifications
  321. 6.4.8 Energy Professionals Qualifications
  322. 6.4.9 Energy Modeling and Modeling Software
  323. 6.4.10 Change Orders Modifying Energy Measures
  324. 6.5 Requirements for Section 223(a)(7) Applications
  325. 6.5.1 Existing Green MIP Mortgages
  326. 6.5.2 Proving Continuing Performance Under ENERGY STAR® Existi…
  327. 6.5.3 Delivery of ENERGY STAR® Existing Building Certification
  328. 6.5.4 Recording Baseline Data - CNA
  329. 6.6 Green MIP Requirements for Section 223(f) Applications
  330. 6.6.1 Properties with Previously Earned Certifications
  331. 6.6.2 Newly Built Properties with No Prior Certification
  332. 6.6.3 Existing Properties with No Prior HUD Recognized Green B…
  333. 6.7 Green MIP Requirements for Sections 220, 221(d)(4), 231-Ne…
  334. 6.7.1 ENERGY STAR® Appliances and Systems Required
  335. 6.7.2 Project Architect’s Green MIP Responsibilities
  336. 6.7.3 Recording Baseline Data-CNA
  337. 6.8 Green MIP Requirements for Section 241(a)
  338. 6.9 Underwriting Owner’s Utility Cost as Part of Operating Exp…
  339. 6.9.1 Methods for Underwriting Owner’s Utility Costs Changes
  340. 6.9.2 Underwriting Owner Utility Operating Expense for New Pro…
  341. 6.9.3 CAUTION: Changed Energy Use Not Proportionate to Resulti…
  342. Chapter 7 Valuation & Market Analysis
  343. 7.1 Introduction
  344. 7.2 Selection of Appraisers and Market Analysts
  345. 7.3.1 Appraiser Qualifications
  346. 7.3.2 Market Analyst Qualifications
  347. 7.4 Valuation Reviews of Third-Party Reports
  348. 7.5.1 Purpose and Focus of the Study
  349. 7.5.2 Effective Date
  350. 7.5.3 Forecast Period for Market Study
  351. 7.5.4 Project Rents Used in Market Study
  352. 7.5.5 HUD as an Intended User
  353. 7.5.6 Executive Summary
  354. 7.5.7 Description of the Proposed Project
  355. 7.5.8 Primary Market Area
  356. 7.5.9 Economic Context
  357. 7.5.10 Demographic Analysis
  358. 7.5.11 Current Housing Market Conditions
  359. 7.5.12 Rental Units in the Pipeline
  360. 7.5.13.1 Net Demand Analysis
  361. 7.5.13.2 Effective Demand
  362. 7.5.13.3 Evaluation of Net Demand and Effective Demand
  363. 7.5.13.4 Demand for LIHTC Projects
  364. 7.5.14 Findings and Conclusions
  365. A. According to USPAP Advisory Opinion 14:
  366. 7.5.16 Data, Estimates, and Forecasts
  367. 7.6 Appraisal Requirements
  368. 7.6.1 Effective Date
  369. 7.6.2 Brevity
  370. 7.6.3 Complex or Unusual Appraisal Assignments
  371. 7.6.4 HUD Forms to Include in the Report
  372. 7.6.5 USPAP Jurisdictional Exception Rule
  373. 7.6.6 Occupancy Percentage
  374. 7.6.7 Sections 220, 221(d)(4), and 231
  375. 7.6.8 Section 223(f)
  376. 7.6.8.1 Value for Rent Controlled Properties
  377. 7.6.8.2 Cost/ Summation Approach
  378. 7.6.8.3 Sales Comparison Approach
  379. 7.6.8.4 Income Approach
  380. 7.6.9 Reconciliation of the Approaches to Value
  381. 7.6.10 Section 231 Substantial Rehabilitation
  382. 7.6.11 Remaining Economic Life (REL)
  383. 7.6.12 Confidentiality Rule of USPAP
  384. 7.6.13 Appraiser’s Certification
  385. 7.6.14 Inspection of the Subject and Comparables
  386. 7.6.15 Required Appraisal Report Exhibits
  387. 7.6.16 Market Analysis
  388. 7.7.1 Rental Estimates
  389. 7.7.1.1 Rent Comparables
  390. 7.7.2 Adjustments
  391. 7.7.3 Final Rent Estimate
  392. 7.7.4 LIHTC and/or Bond Financed Projects
  393. 7.7.5 Trending of Rents
  394. 7.7.6 Equipment Included in Rent
  395. 7.7.7 Occupancy/Vacancy and Collection Losses
  396. Property Type
  397. 7.7.8 Project Rent Concessions
  398. 7.7.9 Occupancy
  399. 7.7.10 Utilities/Services
  400. 7.7.11 Project Location, Amenities, and Other Factors
  401. 7.7.12.1 Ancillary Income
  402. 7.7.12.2 Resale/Submetering of Utilities
  403. 7.7.12.3 Resale of Internet and Media Services
  404. 7.7.12.4 Cell Tower Income
  405. 7.7.12.5 Short-Term Lease Premiums
  406. 7.7.12.6 Corporate Leases
  407. 7.7.12.7 Pool and Pet Fees
  408. 7.7.12.8 Ineligible Income
  409. 7.7.12.9 Commercial Income
  410. income collected under the contract if it is a fixed monthly p…
  411. Commercial Space and Income Limitations
  412. 7.7.13 Limited Waiver of Commercial Income and Space Limits
  413. 7.7.14 Commercial Space Valuation
  414. 7.8.1 Purpose
  415. 7.8.2 Sources of Expense Data
  416. 7.8.3 General
  417. 7.8.4 Estimate of Operating Expenses by Units of Comparison
  418. 7.8.5 Expense Comparables
  419. 7.8.6 Expense Adjustments
  420. 7.8.7 Updating Procedures
  421. 7.8.8 Consistent Expense Line Items
  422. 7.8.9 Underwritten NOI and Program Guidance
  423. 7.9 Site Analysis
  424. 7.9.1 Analysis of Location
  425. 7.9.2 Specific Location
  426. 7.9.3 Civic, Social, and Commercial Centers
  427. 7.9.3.1 Schools
  428. 7.9.3.2 Neighborhood Shopping
  429. 7.9.3.3 Religious and Recreation Centers
  430. 7.9.4 Transportation
  431. 7.9.5 Special Hazards and Nuisances
  432. 7.9.6 Parking Facilities
  433. 7.9.7 Site Suitability
  434. 7.9.8 Land/Site Valuation
  435. 7.9.9 Warehousing of “Excess” Land Area
  436. 7.10.1 Lender’s Responsibilities
  437. 7.11.1 Lender’s Responsibilities
  438. 7.11.2 HUD Review
  439. 7.12.1 Lender’s Responsibilities
  440. 7.13.1 General
  441. 7.13.2 Completing Form HUD-92264
  442. 7.13.3 Applicable Approaches for "As Is" Value
  443. 7.13.4 Valuation for 220 and 221(d)(4)
  444. 7.13.5 Valuation for Section 231 Substantial Rehabilitation
  445. 7.13.6 Valuation for RAD Transactions
  446. 7.13.7 Contingency Reserves
  447. 7.13.8 Interest During Construction
  448. 7.13.9 Inspection Fee
  449. 7.13.10 Offsite Costs
  450. 7.13.11 Rehabilitation Cost not Attributable to Residential Use
  451. 7.13.12 Developer’s Fee, when Applicable
  452. 7.13.13 Exclusions to Estimated Replacement Cost
  453. 7.14.1 Estimate of a Project’s Operating Deficit
  454. 7.15 Leaseholds/Ground Leases
  455. 7.15.1 Definitions
  456. J. Operating Expenses. See Section 7.7.
  457. 7.15.2 Legal Requirements
  458. 7.15.3.1 Acceptable Form of Ground Rent Computation
  459. 7.15.3.2 Unacceptable Lease Payments (Ground Rent)
  460. 7.15.3.3 Ground Rent During Construction
  461. 7.15.4 Valuation of the Leasehold Estate
  462. 7.15.5 Rehabilitation of an Existing Project
  463. 7.15.6 Maximum Mortgage Amount for Criterion 3
  464. 7.15.7 Fee-Joinders
  465. 7.16.1 General Comments and Exceptions
  466. 7.16.2 Full Term Tax Abatement
  467. 7.16.3 Partial Term or Variable Tax Abatement
  468. 7.16.4 Deferral of Real Estate Taxes
  469. 7.17.1 For Section 223(f)
  470. 7.17.1.1 Criterion 3 Market Value
  471. 7.17.1.2 Criterion 5 Debt Service Analysis
  472. 7.17.1.3 Form HUD-92264T for LIHTC Projects without Section 8
  473. 7.17.1.4 Form HUD-92264T for Section 8 Project-Based Assistanc…
  474. 7.17.1.5 Form HUD-92264T for Section 8 Project-Based Assistanc…
  475. 7.17.2 Fee Income
  476. 7.17.3 Income Limits
  477. 7.17.4 Expenses/Fees
  478. 7.18.1 Scope of Work
  479. 7.18.2 Jurisdictional Exception Rule
  480. 7.18.3 Record Keeping Rule
  481. 7.18.4 Loan Committee
  482. 7.18.5 Workload Sharing
  483. 7.18.6 Consultations with Other Staff
  484. 7.18.7 Environmental Processing
  485. 7.18.8 Technical Appraisal Review Requirements
  486. 7.18.9 Documentation of the Appraisal Review
  487. Chapter 8 Mortgage Credit
  488. 8.1 Introduction
  489. 8.2 Borrower Types – Single Asset Borrower Entity
  490. 8.3 Reviewing Principals and Other Parties in Control
  491. 8.3.1 Determining Principals and Who is in Control
  492. B. “Principals” may include any of the following:
  493. 8.3.2 Underwriting Active Principals and Those with Control
  494. 8.3.3 Previous Participation Certification Requirements
  495. 8.3.4 Nonprofit Principals
  496. 8.3.5 Foreign National Participation in FHA-Insured Multifamil…
  497. Definition of Principal for Regulatory Agreement Section 50
  498. 8.4 Investigating Credit and Character
  499. 8.4.1 Use of Credit Reports and Credit Investigation
  500. 8.4.2 Lender’s Review of the Credit Report
  501. 8.4.3 Delinquent Federal Debt, Judgments and Pending Litigation
  502. 8.4.4 Trade and Credit References
  503. 8.4.5 Rejection Due to Unacceptable Character and Credit
  504. 8.5.1 Financial Statement Analysis
  505. 8.5.1.1 Submission of Financial Statements–New Construction
  506. 8.5.1.2 Existing Project Financial Statements
  507. 8.5.1.3 Review of Financial Statements and Other Documents
  508. B. Exceptions:
  509. 8.5.1.4 Letters and Lines of Credit
  510. 8.5.1.5 Sponsor’s Continuing Commitments
  511. 8.5.1.6 General Contractor with Adequate Capital
  512. 8.5.1.7 LIHTC, Historic Tax Credit or New Market Tax Credit Tr…
  513. 8.5.1.8 Real Estate Owned Schedule and Mortgage Debt Schedule
  514. 8.6.1.1 Purpose
  515. 8.6.2 Principal Types
  516. 8.6.3 Threshold
  517. 8.6.4 Threshold Applies to Current and Expected Balance
  518. 8.6.5 Effective Date and Duration
  519. 8.6.6 Lender Submission and Procedure
  520. 8.7 Secondary Financing
  521. 8.7.1 Public Sources
  522. 8.7.2 Private Sources – Section 223(f)
  523. NOTE: Project-specific exceptions or waivers to these policies…
  524. 8.7.3 Private Source – New Construction/Substantial Rehab
  525. 8.7.4 Section 223(a)(7) Refinance Program
  526. 8.7.5 Condition for Repayment of Secondary Financing
  527. 8.7.6 Secured Public Secondary Financing Conditions
  528. 8.7.7 Unsecured Private Secondary Financing Conditions
  529. 8.7.8 Tax Credit Equity Bridge Loans
  530. 8.8 Application Exhibits and Responsibilities
  531. 8.8.1 General Responsibilities of Lender’s Underwriter
  532. 8.8.2 Additional Exhibits Required of Project Participants
  533. 8.8.3 Evaluating Nonprofit Sponsors and Borrowers
  534. 8.8.4 Credit Review of a Nonprofit Sponsor and Borrower
  535. 8.8.5 Nonprofit Developer Fees
  536. 8.8.6 Consultant Fees
  537. 8.8.7 Establishing a Profit-Motivated Borrower Entity
  538. 8.8.8 Lender’s Review and Recommendation
  539. 8.8.9 Mortgage Credit Duties of HUD
  540. 8.9.1 Sections 220, 221(d)(4), 241(a) and 231 Projects
  541. 8.9.2 Section 207 Pursuant to 223(f) Projects
  542. 8.9.3 Section 223(a)(7) Projects
  543. 8.10.1 Mortgage Amounts and Cash Requirements
  544. 8.11.1 Determining Mortgage Amounts, Cash Requirements, and Re…
  545. B. Identity of Interest Purchase Transaction . Refer to Chapte…
  546. 8.12.1 General
  547. 8.12.2 Application for Mortgage Insurance
  548. 8.12.3.1 Firm Commitment
  549. 8.12.3.2 Initial Endorsement
  550. 8.12.3.3 Grant and Loan Proceeds Must be Advanced
  551. 8.12.4 Grants and Loans from a Non-Governmental Source
  552. B. Initial Endorsement.
  553. 8.13 Insurance Upon Completion
  554. 8.14 Determining Cash Requirements for Completion
  555. 8.15.1 Review of Financing Documents
  556. 8.15.2 Loan Rates
  557. 8.15.3 Tax-Exempt Loans and/or Bonds
  558. 8.15.4 Itemized Statement of Costs
  559. 8.15.5.1 Prepayment of Note
  560. 8.15.5.2 State/Local Occupancy Use and/or Rent Restrictions
  561. 8.15.6 Pre-Cost Certification Conference Information
  562. Chapter 9 Environmental Review and Requirements
  563. 9.1 Introduction
  564. 9.1.1 Legal Authorities, Guidance, Standards, and Documentation
  565. 9.1.2 Project Description, Aggregation, and Extent of Review
  566. 9.1.3 Levels of Environmental Review
  567. 9.1.4 Local, State, Tribal or Federal Requirements
  568. 9.2.1 Lender Responsibilities and Limitations
  569. 9.2.2 HUD Responsibilities
  570. 9.2.3 Timing Considerations
  571. 9.2.4 Verifying Qualifications of Professionals
  572. 9.2.5 Consulting with Regional or Satellite Offices
  573. 9.3 HEROS Environmental Reports
  574. 9.4 Contamination and Toxic Substances
  575. 9.4.1 Phase I Environmental Site Assessment Requirements
  576. 9.4.2 Phase II Environmental Site Assessment Requirements
  577. 9.4.3 Remediation Response Planning
  578. 9.4.4 Remediation Plans with Complete Removal of Contamination
  579. 9.4.5 Remediation Plans with Incomplete Removal of Contamination
  580. 9.4.6 Monitoring Wells, Flushing Wells, and Testing Wells 9.4.…
  581. 9.4.6.2 Monitoring Well Protocols
  582. 9.4.6.3 Monitoring Wells for Off-site Contamination
  583. 9.4.6.4 Flushing Wells
  584. 9.4.6.5 Testing or Monitoring Wells Ordered by LSTF
  585. 9.4.6.6 Non-operating Wells
  586. 9.4.7 Off-Site Contamination
  587. 9.4.8 Escrow
  588. 9.4.9 Waivers
  589. 9.4.10 LSTF Approvals and Reviews
  590. 9.4.11 Superfund Sites
  591. 9.4.11.1 Superfund National Priority List (NPL) Sites
  592. 9.4.11.2 Superfund Sites Not on the NPL
  593. 9.4.11.3 EC/IC Put in Place by EPA
  594. 9.4.12 Unacceptable Sites
  595. 9.4.13 Underground Storage Tanks Not Regulated by the LSTF
  596. 9.5.1 General Responsibilities
  597. 9.5.2 Projects with Complete Removal of Site Contamination 9.5…
  598. 9.5.2.2 Architecture/Engineering and Cost
  599. 9.5.2.3 Mortgage Credit
  600. 9.5.3 Projects with Incomplete Removal of Site Contamination
  601. 9.5.4 Insurance and Guarantee Requirements
  602. 9.5.5 Management, Coordination, and Communication
  603. 9.6.1 Lead-Based Paint (24 CFR Part 35.115(a))
  604. 9.6.2 Asbestos (24 CFR 50.3(i))
  605. 9.6.3.1 Background
  606. A. Radon Report :
  607. B. Radon Professionals :
  608. C. Exceptions to a Radon Report :
  609. D. Testing Protocols :
  610. E. Occupant Notification :
  611. F. Mitigation Standards :
  612. G. Mitigation Timing :
  613. H. Certificate of completion :
  614. I. Operation and Maintenance Plans :
  615. J. Existing Mitigation Systems :
  616. K. Cost estimates :
  617. 9.6.3.3 Requirements for Section 223(f) Projects
  618. 9.6.3.4 Requirements for Substantial Rehabilitation and Conver…
  619. 9.6.3.5 Requirements for New Construction
  620. 9.6.4 Historic Preservation (24 CFR 50.4(a))
  621. 9.6.5 Floodplain Management (24 CFR 50.4(b)(2))
  622. 9.6.6 Flood Insurance (24 CFR 50.4(b)(1))
  623. 9.6.7 Wetlands Protection (24 CFR 50.4(b)(3))
  624. 9.6.8 Noise Abatement and Control (24 CFR Part 51, Subpart B)
  625. 9.6.9 Explosive and Flammable Hazards (24 CFR Part 51 Subpart C)
  626. 9.6.10 Air Quality (24 CFR 50.4(h))
  627. 9.6.11 Airport Hazards (24 CFR Part 51 Subpart D)
  628. 9.6.12 Coastal Barrier Resources (24 CFR 50.4(c)(1))
  629. 9.6.13 Coastal Zone Management (24 CFR 50.4(c)(2))
  630. Endangered Species (24 CFR 50.4(e))
  631. 9.6.15 Farmlands Protection (24 CFR 50.4(j))
  632. 9.6.16 Sole Source Aquifers (24 CFR 50.4(d))
  633. 9.6.17 Wild and Scenic Rivers (24 CFR 50.4(f))
  634. 9.6.18 Environmental Justice (24 CFR 50.4(l))
  635. 9.6.19 Additional Nuisances and Hazards
  636. 9.6.20 Environmental Assessments (24 CFR 50 Subpart E)
  637. 9.6.21 Operation and Maintenance Plans
  638. Chapter 10 Management Analysis
  639. 10.1 Introduction
  640. 10.2 Exhibits Required for Firm Commitment
  641. G. Marketing, Leasing, and (if applicable) Relocation Plan :
  642. 10.3 Lender Review of Management Documents
  643. 10.4 HUD Asset Management Review
  644. 10.5 Review of Previous Participation
  645. 10.6 Bonding Requirements for Agents
  646. 10.7.1 Applicability
  647. 10.7.2 Required Contents
  648. 10.7.3 Length/term of the Agreement
  649. 10.7.4 Management Fee
  650. 10.8 Approval of Proposed Management Agent
  651. 10.9 Affirmative Fair Housing Marketing
  652. 10.10 Management Agents and Escrow Administration
  653. Chapter 11 Lender Underwriting, HUD Review and Closing
  654. 11.1 General
  655. 11.2 Lender Underwriting
  656. 11.2.1 Pre-application
  657. 11.2.2 Firm Commitment Application
  658. 11.2.3 Third-Party Report Certifications
  659. 11.2.4 HUD Forms Submission
  660. 11.3.1 HUD Underwriter Responsibilities
  661. 11.3.2 Pre-Application and Firm Commitment Processing
  662. 11.3.3 Underwriting Recommendation
  663. 11.3.4 Firm Commitment Issuance, Extensions, Amendments and Re…
  664. 11.3.5 Waivers
  665. 11.3.6 Interest Rate Lock
  666. 11.4 Program Closing Provisions
  667. 11.5 Loan Fees
  668. 11.5.1 Deferred Fee Collection
  669. 11.5.2 Broker’s Fees
  670. 11.6.1 Preliminary Title Report
  671. 11.6.2 Air Rights and Other Shared Interest Projects
  672. 11.7 Borrower Entity’s Organizational Documents
  673. 11.8.1 Term
  674. 11.8.2 Prepayment Provisions
  675. 11.8.3 Conditions for Including Lockouts and/or Penalties
  676. 11.8.4 Late Charge Provisions
  677. 11.8.5 Override of Prepayment Lockout
  678. Chapter 12 Construction Period
  679. 12.1.1 General
  680. 12.1.2 HUD Construction Analyst (CA)
  681. 12.1.3 HUD Inspector
  682. 12.2.1 General Requirements
  683. 12.2.2 Contract Administration
  684. 12.2.3 Cost Certification
  685. 12.3.1 Purpose of Inspection
  686. 12.3.2 Access
  687. 12.3.3.1 Assignment
  688. 12.3.3.2 Offsite Fabricated Construction
  689. 12.3.3.3 Trip Report Review
  690. 12.3.3.4 HUD Inspector Oversight
  691. 12.3.4 HUD Inspector’s Duties
  692. 12.3.4.1 Orientation
  693. 12.3.4.2 Facilities
  694. 12.3.4.3 Inspections
  695. 12.3.4.4 Start of Construction Date
  696. 12.3.4.5 Shop Drawings and Other Data
  697. 12.3.4.6 Work Stoppage
  698. 12.3.4.7 Occupancy
  699. 12.3.4.8 Additional Duties of the Inspector
  700. 12.3.4.9 Construction Record
  701. 12.3.4.10 Projects Insured Upon Completion
  702. 12.3.4.11 Off-Site Inspection
  703. 12.3.5 Construction Progress Meetings (monthly meetings)
  704. 12.3.6 Reporting Serious Construction Problems
  705. 12.4.1 General Requirements
  706. 12.4.2 Architect's Supplemental Instructions
  707. 12.4.3 Architect Administering the Construction Contract
  708. 12.5 Architect’s Adequacy
  709. 12.5.1 Deficient Administration
  710. 12.5.2 Reasons for Termination of Services
  711. 12.5.3 HUD Office Actions
  712. 12.5.4 Request for Contract Termination
  713. 12.5.5 Contract Termination
  714. 12.6.1 Substantial Completion
  715. 12.6.2 Final 100% Draw Completion Inspection
  716. 12.6.3 Warranty Inspections
  717. 12.7.1 General
  718. 12.7.2 Lender’s Role in Processing Application for Insurance o…
  719. 12.7.3 Stages of Advances
  720. 12.7.4 Approval of Initial/Interim Advances
  721. 12.7.5 Contractor’s Monthly Requisition and Related Matters
  722. 12.7.6 Next to Final Advance
  723. 12.7.7 Final Advance
  724. 12.7.8 Keeping the Mortgage in Balance
  725. 12.8.1 General Requirements
  726. 12.8.2 Change Order Classification
  727. 12.8.3 Additive change Orders
  728. 12.8.4 Deductive Change Orders
  729. 12.8.5 Changes that Adversely Affect Property Income
  730. 12.8.6 Extension of Contract Time
  731. 12.8.7 Changes to Items of Delayed Completion
  732. 12.8.8 Emergency Changes
  733. 12.8.9 Insurance Upon Completion
  734. 12.8.10 Changes to Offsite Construction
  735. 12.8.11 Other Changes
  736. 12.9.1 General Procedure
  737. 12.9.2 Voiding Changes
  738. 12.9.3 Unapproved Changes
  739. 12.10.1 Architectural
  740. 12.10.2 Cost
  741. B. Approved time extensions:
  742. 12.11.1 Appraisal Reconsideration, When Required
  743. A. Processing:
  744. 12.12.1 Wages
  745. 12.12.2 Labor Violations
  746. 12.12.3 FHEO Noncompliance
  747. 12.12.4 Compliance with Any Applicable Relocation Plan
  748. 12.13 Surveys
  749. 12.14 Permission to Occupy
  750. 12.14.1 Physical Completion
  751. 12.14.2 Signatures, Approval and Permission
  752. 12.14.3 Submission Documents
  753. 12.14.4 Partial Occupancy Approval
  754. 12.15.1 Application for Disbursement of Escrowed Funds
  755. 12.15.2 Release of Letters of Credit
  756. 12.15.3 Working Capital Deposit
  757. D. Final Release of Escrow.
  758. 12.15.4 Initial Operating Deficit Deposit
  759. 12.15.5 Amount of Contractor's Retainage and Release
  760. E. Early partial release of retainage.
  761. 12.15.6 Cash-Out Escrow from Land Equity
  762. 12.16 Insurance Upon Completion (IUC)
  763. 12.17.1 Repairs and Alterations
  764. 12.17.1.1 Completion of Repairs and Alterations
  765. 12.17.1.2 Payment for Repairs
  766. 12.17.1.3 Release of Cash-Out/ Equity from Loan Proceeds
  767. 12.17.1.4 Funds Remaining in the Escrow
  768. 12.17.2 Inspection
  769. 12.17.3 Schedule of Values for Reimbursement from the Repair E…
  770. 12.17.4 Final Report
  771. 12.17.5 Change Orders
  772. 12.17.6 Warranty Inspections
  773. 12.17.7 Projects in Difficulty
  774. 12.18 Casualty Events During Construction
  775. Chapter 13 Cost Certification
  776. 13.1 Projects that Must Certify
  777. 13.2 Projects Exempt from Cost Certification
  778. 13.2.1 Low Income Housing Tax Credits
  779. 13.2.1.1 Audit Fee Not Applicable
  780. 13.2.1.2 Establishing Substantial Completion Date
  781. 13.2.1.3 Treatment of Operating Income Generated During Constr…
  782. 13.2.1.4 Copy of Final Sources and Uses Statement
  783. 13.2.1.5 Modification to Form HUD-92580
  784. 13.3 Types of Cost Certification
  785. 13.4 Entities That Must Cost Certify
  786. 13.5 Cost Certification Sequence of Events
  787. 13.6 Project Completion and Cut-Off Dates
  788. 13.7 Administrative Completion Date
  789. 13.8 Submission Date
  790. 13.9 Required Forms
  791. 13.10 Required Statements and Certifications
  792. 13.10.1 Simplified Form of Cost Certification
  793. 13.10.2 Long Form Cost Certification
  794. 13.10.3 Section 223(f) Projects
  795. 13.11 Deficiencies in Cost Certification Submission
  796. 13.12 Mortgage Credit Limited Review
  797. 13.13 Mortgage Credit Detailed Review
  798. 13.14.1 Construction Contract
  799. 13.14.2 Architect’s Fee(s)
  800. 13.14.3 Interest Accrued
  801. 13.14.4 Taxes Accrued
  802. 13.14.5 Property Insurance Accrued
  803. 13.14.6 Mortgage Insurance Premium
  804. 13.14.7 HUD Application, Commitment, and Inspection Fees
  805. 13.14.8 Financing Expenses
  806. Exclude:
  807. 13.14.9 Title and Recording Expenses
  808. 13.14.10 Legal, Organization, and Audit Expenses
  809. 13.14.11 Offsite Costs
  810. NOTE:
  811. 13.14.12 Other Costs
  812. 13.14.13 Builder’s and Sponsor’s Profit and Risk Allowance
  813. 13.14.14 Non-Profit Developer Fee
  814. 13.15.1 Actual Costs
  815. 13.15.2 Mortgage Increase or Detailed Review Not Requested
  816. 13.15.3 Cost Review
  817. 13.15.4 Lump Sum Construction Contract Cost Certification
  818. 13.15.5 Summary of Cost Certification Review (on Form HUD92331)
  819. 13.16 Non-Profit Borrower’s Initial Equity Investment
  820. 13.17 Determine the Borrower’s Initial Investment
  821. 13.18 Section 223(f) Modified Form of Cost Certification
  822. 13.19 Special Instructions for Substantial Rehabilitation
  823. 13.20 Mortgage Reduction after Cost Certification
  824. 13.21 Increase in Mortgage Amount
  825. 13.22 Restrictions on Mortgage Increases
  826. 13.23 Processing a Mortgage Increase
  827. 13.24 Authorization to Reopen Mortgage Transaction
  828. 13.25 Deferment of Principal Payments
  829. 13.26 Document Distribution
  830. 13.27 Office of Inspector General
  831. 13.28 Cost Certification Incontestability
  832. 13.29 Post-Closing Escrows
  833. 13.30.1.1 Advance Amortization Requirements
  834. 13.30.1.2 Income and Expense Statement Requirement
  835. 13.30.1.2.1 Agreement of Borrower
  836. 13.30.1.2.2 Treatment of Items in Statement
  837. 13.30.1.3 Amount of Required Prepayment
  838. 13.30.1.4 Excess (Unused) Mortgage Loan Proceeds
  839. 13.30.2.1 Preparing Form HUD-92580, Maximum Insurable Mortgage
  840. 13.30.2.2 Decrease in Loan Amount
  841. 13.30.2.3 Increase in Loan Amount
  842. 13.30.2.4 Statement of Status of Escrows
  843. 13.30.2.5 Borrower’s Investment
  844. 13.30.3 Final Closing – Insurance Upon Completion
  845. Chapter 14 LIHTC and Other Tax Credit Programs
  846. 14.1 Introduction
  847. 14.2 LIHTC Underwriting Guidance
  848. MAP Guide Section Number Content
  849. MAP Guide Section Number Content
  850. Content
  851. 14.3 Historic and New Markets Tax Credits
  852. 14.4 Subsidy Layering Review
  853. 14.5 Evidence of Tax Credit Allocations
  854. 14.6 HAP Contract Renewals for Section 8 Projects
  855. 14.7 Application/Submission Requirements
  856. 14.8 Architecture and Engineering
  857. 14.9 Identities of Interest in Tax Credit Transactions
  858. 14.10 Mortgage Amounts, Contingency and Escrow
  859. 14.11 Structuring of Secondary Debt
  860. 14.12.1 Treatment of Developer Fee
  861. 14.12.2 Deferred Developer Fee (DDF)
  862. 14.13 Tax Credit Equity Pay-In Schedule
  863. Benchmarks for Equity Installments
  864. 67,68
  865. 14.14 Definition of “Net Equity”
  866. Net Equity = (Total Equity) – (Equity Pay In 1) – (Allowed Ded…
  867. Sample Owner’s Proposed Reductions:
  868. Total $1,900,000
  869. 14.15 Equity Bridge Loans in Tax Credit Projects
  870. 14.16 Syndicator and Investor Fees from Operations
  871. 14.17 Mark to Market (M2M) Transactions
  872. 14.18 Firm Commitment Additional Conditions
  873. 14.19 Other Matters
  874. 14.19.1 Bond-Financed Projects in New York City
  875. 14.19.2 Lien Priority
  876. 14.19.3 Tax Credit Regulatory Agreements
  877. 14.19.4 Tax Exempt Bonds - FHA Insured Permanent Debt
  878. 14.19.5 Refinancing of M2M Properties
  879. 14.19.6 Income Averaging
  880. 14.20 FHA Tax Credit Pilot Program Expansion
  881. Chapter 15 Oversight of MAP Program Requirements
  882. 15.1 Oversight of MAP Lenders
  883. 15.2.1 Functions
  884. 15.2.2 Data and Reports
  885. 15.2.3 Timing of MAP Lender Reviews
  886. 15.3.1 General
  887. 15.4 Administrative Record
  888. 15.5 Settlement Agreements
  889. 15.6 Letters of Caution, Warning Letters or Sanctions
  890. 15.7 Warning Letters and Targeted Enforcement Measures
  891. 15.7.1 Warning letter
  892. 15.7.2 Targeted Enforcement Measures
  893. 15.8 MAP Probation
  894. 15.9 MAP Suspension
  895. 15.10 MAP Termination
  896. 15.11 MAP Lender Review Board
  897. 15.12 MAP Lender Review Board: Staff Responsibilities
  898. 15.13 MAP Lender Review Board: Procedures
  899. 15.14 Notice of Violation
  900. 15.15 Notice of Action
  901. 15.16 Appeal Conference and Procedures
  902. 15.17 Suspension, Debarment or LDP
  903. 15.17.1 Parties subject to a suspension, debarment or LDP
  904. 15.17.2 Limited Denial of Participation
  905. 15.17.3 Suspension and debarment
  906. 15.17.4 Procedures to refer a suspension, debarment or LDP
  907. 15.18 Referral to Mortgagee Review Board or OIG
  908. 15.19 Other Enforcement Actions
  909. Chapter 16 Master Leases with Market Tax Credits
  910. 16.1 Introduction
  911. 16.2 Background
  912. 16.3 General Programmatic Requirements
  913. A. Firm Commitment Special Conditions:
  914. 16.5 Cost Certification and Final Endorsement
  915. Chapter 17 Section 207: Refinancing Cooperative Housing Projects
  916. 17.1 Introduction and Background
  917. 17.2 Program Eligibility
  918. 17.3 Program Requirements
  919. 17.3.1 Loan Parameters
  920. 17.3.2 General Operating Reserve (GOR)
  921. 17.3.3 Model Forms and Closing Documents
  922. 17.4 Application Processing
  923. 17.5.1 Architectural and Cost Processing
  924. 17.5.2 Valuation Processing: Appraisal Scope-of-Work
  925. 17.5.3 Environmental Processing
  926. 17.5.4 Mortgage Credit Processing
  927. 17.5.5 Asset Management Processing
  928. 17.6 Loan Closing Procedures
  929. Chapter 18 Section 223(a)(7)
  930. 18.1 Introduction
  931. 18.2 Purpose of Section 223(a)(7)
  932. 18.3.1 Standard Processing Time
  933. 18.3.2 Inapplicable Mortgages
  934. 18.3.3 Maximum Mortgage
  935. 18.3.4 Mortgage Term
  936. Loan Data
  937. Loan Requirements
  938. Loan Data
  939. 18.3.5 Mortgage Insurance Premium
  940. 18.3.6 Environmental Review Requirements
  941. 18.3.7 Fees
  942. 18.3.8 Project Numbering
  943. 18.3.9 Regulatory Agreement
  944. 18.3.10 Cost Certification
  945. 18.3.11 Commencement of Amortization
  946. 18.3.12 Source of Funds for Prepayment Penalty Costs
  947. 18.3.13 Refinancing Partial Payment of Claim (PPC) Properties
  948. 18.3.14 Commitment, Regulatory Agreement and Closing
  949. 18.4 Processing
  950. 18.4.1 Project Analysis
  951. B. The following is an example of a sample transaction – the d…
  952. C. The following is an example of a sample transaction – the d…
  953. D. The following is an example of a sample transaction – the d…
  954. 18.4.2 Verification of Existing Borrower Debt
  955. 18.4.3 CNA Requirement
  956. 18.4.4 Site Visits
  957. 18.4.5 Section 202 Mortgage Refinancing
  958. Loan Requirements Section of the Act
  959. 18.4.6 Ownership and Property Management Changes
  960. 18.5 Application Requirements Checklist
  961. Chapter 19 Closing Guide
  962. Part I: Introduction and Procedures
  963. 19.1.1 Applicability
  964. 19.1.1.1 Objective
  965. 19.1.1.2 Defined Terms
  966. 19.1.2.1 General
  967. 19.1.2.2 Firm Application
  968. 19.1.2.3 After Firm Commitment Issuance and Prior to Package S…
  969. B. Lender’s Introductory Response and Interim Communication:
  970. 19.1.2.4 HUD Review of Closing Packages
  971. 19.1.2.5 Changes to Tentative or Confirmed Closing Dates
  972. 19.1.3.1 Administrative Clearance to Close
  973. 19.1.3.2 HUD Signature Page
  974. 19.1.3.3 Note Endorsement
  975. 19.1.3.4 Circulation and Submission of Recordable Documents
  976. 19.1.3.5 Form of Closing Docket Submission
  977. 19.1.3.6 Restriction on Post-Closing Revision to Closing Docket
  978. 19.1.3.7 Closing Type: Mail or In-Person
  979. 19.1.4 Post-Closing Handling of Closing Dockets
  980. 19.2.1 Initial Endorsement Activities
  981. 19.2.2.1 Davis Bacon Labor Standards (DBLS) Clearance Required
  982. 19.2.2.2 Procedures for Firm Application, Issuance, and Initia…
  983. 19.2.2.3 Early Start of Construction
  984. 19.2.2.4 Procedures for Final Closings
  985. 19.2.3 Early Start of Construction
  986. 19.2.4.1 HUD Prior Written Approval Needed
  987. 19.2.4.2 Prior Document Review by HUD Counsel.
  988. 19.2.4.3 Implementation
  989. 19.3.1.1 Definitions
  990. 19.3.1.2 Assurance of Completion
  991. 19.3.1.3 Commencement of Preparation for Final Closing
  992. 19.3.1.4 Prerequisites for Final Closing
  993. 19.3.1.5 Final Closing Procedures
  994. 19.3.1.6 Internal Closing Forms
  995. 19.3.2.1 Request for Final Endorsement
  996. 19.3.2.2 Final Endorsement of the Note
  997. 19.3.2.3 Release of Final Advance
  998. 19.3.2.4 Release of Working Capital Deposit
  999. 19.3.3.1 Requirements for Final Advance
  1000. 19.3.3.2 Application for Insurance of Advance of Mortgage Proc…
  1001. 19.3.4.1 Disputes
  1002. 19.3.4.2 Relevant Issues for HUD’s Consideration
  1003. 19.3.4.3 Closing Without Full Participation of the Contractor.
  1004. 19.3.5.1 Introduction
  1005. 19.3.5.2 Workouts
  1006. Part II: Closing Documents and Program-Specific Requirements
  1007. 19.4.1.1 Required Use of HUD Forms and Closing Protocols
  1008. 19.4.1.2 Completion of HUD’s OMB-approved Forms
  1009. 19.4.1.3 Date of Documents
  1010. 19.4.1.4 Closing Checklists
  1011. 19.4.1.5 Submission of Closing Documents
  1012. 19.4.1.6 Changes to Form Documents and Deviations from Closing…
  1013. 19.4.1.7 Multi-Tiered Review of Requests for Substantive Changes
  1014. 19.4.2.1 General Requirements
  1015. 19.4.2.2 Permitted Modifications for State Requirements and Pr…
  1016. 19.4.2.3 Supplemental, Consolidated, Amended or Restated Loan
  1017. 19.4.2.4 Ground Lease
  1018. 19.4.2.5 Fee-Joinders
  1019. 19.4.3.1 General Requirements
  1020. 19.4.3.2 Description of Collateral
  1021. 19.4.4.1 General Requirements
  1022. 19.4.4.2 Prepayment Provisions
  1023. 19.4.4.3 Endorsement Panel
  1024. 19.4.4.4 Late Charge Provision
  1025. 19.4.4.5 Changes to Loan Interest Rates
  1026. 19.4.4.6 Change(s) to Permanent Financing After Initial Closing
  1027. 19.4.4.7 Supplemental, Consolidated, Amended or Restated Loan
  1028. 19.4.5.1 Form
  1029. 19.4.5.2 Notice Address for HUD
  1030. 19.4.5.3 Section 50
  1031. 19.4.5.4 Section 30 - Additional Occupancy Restrictions and Po…
  1032. 19.4.5.5 Residual Receipts Rider
  1033. 19.4.5.6 Additional Riders
  1034. 19.4.6.1 General
  1035. 19.4.6.2 Borrower’s Counsel Legal Review and Opinion
  1036. 19.4.6.3 Required Organizational Documents for Borrower
  1037. 19.4.6.4 Tax Credit Transactions
  1038. 19.4.6.5 Final Closings
  1039. 19.4.7.1 Logistics
  1040. 19.4.7.2 Title and Survey Review Standards
  1041. 19.4.7.3 Pro Forma Title Policy Submission
  1042. 19.4.7.4 Title Policy Requirements
  1043. 19.4.7.5 Title Policy Issuance and Escrow Services
  1044. 19.4.7.6 Survey, Survey Map/Plat and Surveyor’s Report.
  1045. 19.4.8.1 General
  1046. 19.4.8.2 Supplemental Opinions
  1047. 19.4.8.3 Litigation Disclosure
  1048. 19.4.9.1 General
  1049. 19.4.9.2 Unsecured Secondary Financing
  1050. 19.4.9.3 Secured Secondary Financing – Public Sources
  1051. E. Instructions for submission to the HUD Closing Attorney.
  1052. 19.4.9.4 Secured Secondary Financing – Private
  1053. 19.4.9.5 Restrictive Covenants and Use Agreements for Secondar…
  1054. 19.4.9.6 Equity Bridge Loans (EBL) for Tax Credit Projects
  1055. 19.4.9.7 Deferred Developer Fees (DDF) for Low Income Housing …
  1056. 19.4.9.8 Secondary Financing That Is Unavailable at Initial Cl…
  1057. 19.4.10.1 General
  1058. 19.4.10.2 Firm Commitment
  1059. 19.4.10.3 Lender’s Certificate
  1060. 19.4.10.4 Tax-Exempt Bond/IRS Code 142(d) Projects
  1061. 19.4.10.5 Restrictive Covenants/Tax Regulatory Agreement
  1062. 19.4.10.6 Borrower’s Counsel Opinion
  1063. 19.4.10.7 Bond Counsel’s Opinion
  1064. 19.4.10.8 HUD Note – Prepayment Prohibitions
  1065. 19.4.10.9 HUD-Required Language for Trust Indenture/Funding Lo…
  1066. 19.4.10.10 Bond Disbursement Agreement and Bond Loan Agreement
  1067. 19.4.10.11 Bond Note
  1068. 19.4.10.12 Supremacy of HUD Requirements and Conflicts
  1069. 19.4.11.1 Firm Commitment Condition
  1070. 19.4.11.2 Subordination of Restrictive Covenants
  1071. 19.4.11.3 Borrower's Attorney's Opinion (Tax Credits)
  1072. 19.4.11.4 LIHTC Equity Pay-In
  1073. 19.4.11.5 Equity Investor Certification
  1074. 19.4.11.6 LIHTC Rider
  1075. 19.4.11.7 Pre-Approval of Special Limited Partners
  1076. 19.4.11.8 Determinative Criteria for SLP Pre-Approval
  1077. 19.4.11.9 Post-Closing Requirements for HUD Pre-Approval of SLP
  1078. 19.4.12.1 General Requirements
  1079. 19.4.12.2 Escrow Agreement for Deferred Repairs (Form HUD-9247…
  1080. 19.4.12.3 Escrow Agreement for Operating Deficits (Form HUD-92…
  1081. 19.4.12.4 Escrow Agreement for Working Capital (Form HUD-92412M)
  1082. 19.4.12.5 Escrow Agreement for Incomplete Construction (Form H…
  1083. 19.4.12.6 Escrow Agreement for Latent Defects (Form HUD-92414M)
  1084. 19.4.12.7 Escrow Agreement of Sponsor to Furnish Additional Fu…
  1085. 19.4.13.1 Permits and Governmental Approvals
  1086. 19.4.13.2 Zoning and Building Code Compliance
  1087. 19.4.13.3 Evidence of Utility Access and Service
  1088. 19.4.13.4 Property Insurance
  1089. 19.4.13.5 UCC Searches
  1090. 19.4.13.6 Certifications
  1091. 19.4.13.7 Certified Closing Statement
  1092. 19.5.1.1 General
  1093. 19.5.2 Project Completion Funds
  1094. 19.5.3 Disbursement Agreement
  1095. 19.5.4.1 General Requirements
  1096. 19.5.4.2 HUD Amendment to AIA Document B108 (Form HUD-92408M) …
  1097. 19.5.4.3 Professional Liability Insurance
  1098. 19.5.5.1 Construction Contract
  1099. 19.5.5.2 Prevailing Wage Rates
  1100. 19.5.5.3 Identity of Interest Disclosure
  1101. 19.5.5.4 Cost Breakdown
  1102. 19.5.5.5 Completion of Forms
  1103. 19.5.5.6 Liquidated Damages
  1104. 19.5.5.7 Cost Certification
  1105. 19.5.5.8 Side Agreements
  1106. 19.5.6.1 General Requirements
  1107. 19.5.6.2 Surety Requirements
  1108. 19.5.6.3 Letters of Credit
  1109. 19.5.6.4 Assurance of Completion for Off-Site Improvements
  1110. 19.5.7.1 Introduction
  1111. 19.5.7.2 HUD-Insured Advance Requirements for Building Compone…
  1112. 19.5.8 Lender’s Certificate for New Construction or Substantia…
  1113. 19.5.9.1 General Requirements
  1114. 19.5.9.2 Maximum Insurable Mortgage Form
  1115. 19.5.9.3 Modifications to Original Loan Terms
  1116. 19.5.9.4 Modification Documents
  1117. 19.5.9.5 Borrower’s Attorney’s Opinion
  1118. 19.5.9.6 Title Evidence at Final Endorsement
  1119. 19.5.9.7 Final As-Built Survey & Surveyor’s Report
  1120. 19.5.9.8 Updated Organizational Documents of Borrower
  1121. 19.5.9.9 Lender’s Current Payment Letter and Certification
  1122. 19.5.9.10 Guarantee Following Completion
  1123. 19.5.10.1 Conditions for Approval of Final Advance of Mortgage…
  1124. 19.5.10.2 Exceptions to General Rule
  1125. 19.5.10.3 Application for Insurance of Advance of Mortgage Pro…
  1126. 19.5.10.4 Approval of a Final Advance
  1127. 19.5.10.5 Escrow for Completion
  1128. 19.5.11.1 General Rule
  1129. 19.5.11.2 Exception to General Rule
  1130. 19.6.1.1 General
  1131. 19.6.1.2 Promissory Note (Form HUD-94001M)
  1132. 19.6.1.3 Evidence of Zoning and Building Code Compliance
  1133. 19.6.1.4 Utilities
  1134. 19.6.1.5 Request for Endorsement of Credit Instrument (Form HU…
  1135. 19.6.1.6 Short-Form Cost Certification
  1136. 19.6.1.7 Repairs and Alterations
  1137. 19.6.1.8 Latent Defects Guarantee
  1138. 19.6.1.9 Projects with Expanded Work
  1139. 19.6.2.1 General
  1140. 19.6.2.2 Five-Year Lockout
  1141. 19.6.2.3 Refinances of Second Mortgages.
  1142. 19.6.2.4 Differences from Section 223(f) Procedures
  1143. 19.6.3.1 Introduction
  1144. 19.6.3.2 Effect on Existing Financing
  1145. 19.6.3.3 Additional Requirements for 241(a) Supplemental FHA L…
  1146. 19.6.3.4 HUD Form Documents for 241(a) Supplemental Loans
  1147. 19.6.4 Section 213 Cooperative Housing Loans
  1148. 19.6.5.1 General
  1149. 19.6.5.2 Firm Commitment
  1150. 19.6.5.3 Construction Requirements
  1151. 19.6.5.4 Closing
  1152. Part III: Sample Language, Certifications, and Riders
  1153. 19.7 HUD-Required Provisions for Borrower’s Organizational Doc…
  1154. 19.8 Rider to Security Instrument – LIHTC Projects
  1155. LENDER
  1156. 19.9 Rider to Regulatory Agreement for Residual Receipts Requi…
  1157. BORROWER
  1158. 19.10 Survey Affidavit of No Change
  1159. AFFIANT:
  1160. 19.11 Certification of Architectural/Engineering Fees
  1161. 19.12 Building Code Verification
  1162. 19.13 Zoning Letter
  1163. 19.14 Third Party Obligee Certification
  1164. 19.15 HUD [Rider / Amendment] To Restrictive Covenants
  1165. Note: This document has been submitted to OMB for PRA approval…
  1166. 19.16 Equity Bridge Loan Rider – LIHTC Projects
  1167. Section 213 Cooperative Program Rider to Regulatory Agreement …
  1168. Appendix 2 Quality Control Plans and Identity of Interest
  1169. A.13.2 Agreement Authorizing Deferment of Principal Payments f…

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