A.13.2 Agreement Authorizing Deferment of Principal Payments for Level Annuity Monthly Payment

Definition

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

including modeling system performance in advance of construction so as to improve designs or to achieve specified minimum performance levels.

Assisted housing

“Federal financial assistance” is broadly defined to include, among many things, grants, loans, contracts, or other arrangements which may take the form of funds, services from Federal personnel, community development grants, and the use of real or personal property (24 CFR 8.3). A few but not exhaustive examples of Assisted Housing include:

a. HUD funded Section 811 or Section 202 developments and any developments that have project based rental certificates or vouchers (i.e., rent supplement, rental assistance program, Section 8 project-based assistance).
b. A HUD mortgagor receiving a subsidy through the Section 221(d)(3) Below Market Interest Rate Program or the 236 Rental Housing Program.
c. Any project assisted with Community Development Block Grant (CDBG), Neighborhood Stabilization Program (NSP), HOME, or HOPWA (Housing Opportunities for Persons With AIDS) funds or any contribution of Federal land or services.
d. As of 2009, the American Recovery and Reinvestment Act (ARRA) and the Tax Credit Assistance

Program (TCAP). Once assisted a property remains assisted even if the term and/or the conditions of assistance have ended. This use of "federal financial assistance" determines the applicability of accessibility requirements to assisted housing. See Appendix 5, Section A.5.2.4.1 and 24 CFR 8.3 for more detail.

Assurance of An assurance of completion of construction in the form of a Combined completion Performance Payment Bond or cash or a Letter of Credit in an amount approved by HUD. Base per dwelling unit HUD set the Base per Dwelling Unit Limit (Base Limit) at $15,000 per unit in limit 2016 and has annually adjusted it for inflation based on the percentage change published by the Bureau of Labor Statistics of the Department of Labor or other inflation cost index. This figure is used to establish the maximum cost of repairs and alterations eligible in a Section 223(f) insured refinance or acquisition loan. Construction costs exceeding the maximum cost of repairs and alterations constitute substantial rehabilitation, an eligible activity only in HUD insured mortgages that permit substantial rehabilitation.

BTU A British thermal unit (BTU) is a measure of the heat content of fuels or energy sources. It is the quantity of heat required to raise the temperature of one pound of liquid water by 1 degree Fahrenheit at the temperature that water has its greatest density (approximately 39 degrees Fahrenheit).

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Term	Definition
Builder's and	BSPRA is a presumed profit for development and construction of a
Sponsor's Profit and	multifamily project. It is unique to applications for new construction or
Risk Allowance	substantial rehabilitation under HUD’s “cost-based” programs (Sections 220
(BSPRA)	and 221(d)(4)) when an identity of interest exists between the Borrower
	and the General Contractor.
Capital Needs	A Capital Needs Assessment (CNA) is a due diligence report describing the
Assessment (CNA)	physical inventory of multifamily property and characterizing the condition
	and expected durability of that inventory for the purpose of budgeting future
	capital repairs and replacements. A CNA includes a financial plan or annual
	schedule of anticipated capital costs and corresponding funding needed to
	meet expected capital expenses.
Capture Rate	Renter Capture Rate is defined as the percentage of qualified potential renter
	households in the PMA that the property must capture to fill the units and
	achieve stabilized occupancy.
Cash flow	The amount, typically annual, remaining after debt service payments are
	subtracted from net operating income.
Certificate of	Certificate usually granted by a jurisdiction's building department certifying
Occupancy	a specified premise has satisfactorily complied with all zoning and building
	ordinances. This certification is a prerequisite for occupancy for its
	designated use and often the transfer of title at a sale.
Change Orders	Construction contract changes to the scope of contract work, contract price
	or contract time.
choice limiting actions	See 24 CFR § 58.22 - Limitations on activities pending clearance, which
	states "
	a. Neither a recipient nor any participant in the development process,
	including public or private nonprofit or for-profit entities, or any of their
	contractors, may commit HUD assistance under a program listed in §
	58.1

b. on an activity or project until HUD or the state has approved the recipient's RROF and the related certification from the responsible entity. In addition, until the RROF and the related certification have been approved, neither a recipient nor any participant in the development process may commit non-HUD funds on or undertake an activity or project under a program listed in § 58.1(b) if the activity or project would have an adverse environmental impact or limit the choice of reasonable alternatives ."

Classification of work Class of Work (i.e., Repair, Level 1, 2, or 3 Alterations) describes the level of (class of work) construction activity involved for the proposed repair work to be completed. Closing Coordinator Assigned by HUD to the transaction to facilitate communication between the lender and HUD housing and Office of General Counsel (OGC) staff and to provide instructions and guidance on the closing process. Closing docket All documents required for closing.

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Term	Definition
CNA e-Tool	An electronic application that automates and standardizes the initiation,
	preparation, submission, review, and approval of a capital needs assessment
	for the Office of Multifamily Housing. SeeAppendix 5, Section A.5.7.1.2.
Code of Federal	The Code of Federal Regulations (CFR) is the codification of the general and
Regulations	permanent rules published in the Federal Register by the executive
	departments and agencies of the federal government. It is divided into 50
	titles that represent broad areas subject to federal regulation. Each volume
	of the CFR is updated once each calendar year and is issued on a quarterly
	basis.
Commercial	Any space or facility permitted and acceptable for "Nonresidential Use" from
Use/Space	which income is derived or anticipated.
Concentrated Risk	A review conducted by HUD related to identifying and mitigating risks posed
Review	to the FHA Insurance fund associated with increasing levels of insured loan
	balances of entities and their identified Key Principals. See also "Prior Credit
	Approval" in Chapter 8, Section 8.6 and Appendix 8, Section A.8.3.
Concept Meeting	An initial meeting required for all new applications that provides an
	opportunity for participants to describe and discuss key issues involved with
	a property and its application.
Conflict of interest	A conflict of interest is any personal or family relationship, business interest,
	or financial investment or relationship which would give the appearance of
	influencing or actually influence a participant in an insured mortgage
	transaction to act in a manner that would undermine the integrity of
	underwriting and executing HUD insured transactions consistent with
	program requirements. See detailed discussion inChapter 2, Section 2.6.
Consolidated	Form HUD-91070M, to be used for transactions where HUD issued a firm
Certifications	commitment on or after May 1, 2019, which consolidates numerous
	certifications HUD requires a borrower to execute in connection with an
	application for project mortgage insurance.
Construction Analyst	A qualified Construction Analyst with experience in multifamily construction
	hired by the lender to review the drawings and specifications prepared by
	the Project Architect and any related contracts for design and construction
	services.
Construction	Documents that define a construction project and establish the tasks and
Documents	responsibilities of the design and construction participants including the
	owner and/or the owner's representative, the project architect, the
	professional engineer if any, the general contractor and sub-contractors.
	Documents typically include the owner/architect agreement(s), the plans
	and specifications, the general contract and prime sub-contracts.
Construction Loan	A person responsible for management of the Lender’s responsibilities during
Administrator	the construction period.

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Term	Definition
Contingency	In construction, contingency refers to a percentage of money reserved to
	cover unanticipated additional project costs or anticipated costs that cannot
	be quantified absent excavation, demolition or similar effort not possible
	prior to construction start.
Cost Certification	Cost certification establishes the Borrower's actual costs, including
	contractor's cost, and establishes the "maximum insurable mortgage" for
	Final Endorsement of the insured mortgage.
Cost Not Attributable	Cost Not Attributable to dwelling use is the construction cost estimate of
(to Dwelling Space)	spaces or features of a project not directly used for residential dwellings.
	Cost Not Attributable is used to adjust the statutory limited mortgage
	amount to add costs that may be excluded from the statutory limit. It is
	calculated only for properties where Criterion 4 is the determining criterion.
	See Criterion 4.
cost-plus construction	A form of construction contract in which the contractor is provided a
contract	specified percentage profit over and above the actual costs of construction.
	See also "Lump sum contract."
Covered multifamily	Defined at 42 U.S.C. 3604(f)(7) and 24 C.F.R. 100.201 and means all units in
dwellings	buildings consisting of 4 or more dwelling units if such buildings have one or
	more elevators; and ground floor units in other buildings consisting of 4 or
	more units. A “ground floor” is a floor of a building with a building entrance
	on an accessible route. A building may have more than one ground floor.
	Buildings consisting of 1, 2 or 3 units do not contain any “covered
	multifamily dwellings.”
Criterion 3	The maximum loan amount based on a percentage of replacement cost (i.e.,
	loan to cost ratio, for construction loans) or a percentage of appraised value
	(i.e. loan to value ratio), for refinance loans. Criterion 3 is calculated on the
	HUD Form 92264A Supplement to Project Analysis under Section I, criterion
	number 3.
Criterion 4	The statutory limit per unit is set periodically by Congress and adjusted by
	HUD for changes in cost over time and among regions. The permitted
	percentage adjustments are established by location and are commonly
	referred to as the "high-cost factors". They are published annually as a
	Mortgagee Letter and a Federal Register Notice. The calculated statutory
	limit may also be augmented to account for costs or value not attributable to
	residential use. See "cost not attributable." Criterion 4 is calculated on the
	HUD Form 92264A Supplement to Project Analysis under Section I, criterion
	number 4.
Criterion 5	The maximum loan amount based on a minimum debt service coverage ratio
	where the ratio is Net Operating Income (NOI) divided by debt service or the
	inverse where the loan amount is based on debt service as a maximum
	percentage of NOI. Criterion 5 is calculated on the HUD Form 92264A
	Supplement to Project Analysis under Section I, criterion number 5.

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Term	Definition
critical habitat	A term defined and used in the Endangered Species Act. It is specific
	geographic areas that contain features essential to the conservation of an
	endangered or threatened species and that may require special management
	and protection. Critical habitat may also include areas that are not currently
	occupied by the species but will be needed for its recovery.
Critical repair	Critical and Non-Critical repairs are identified by the needs assessor who
	prepares a capital needs assessment for an existing property. Critical repairs
	are of two types, Life Safety and Accessibility. Critical repairs identified as
	Life Safety are remedies to conditions that are immediate risks endangering
	the life, health or safety of tenants. Critical repairs identified as Accessibility
	are remedies to violations of statutes or regulations requiring properties be
	accessible to persons with disabilities. See Appendix 5, Section A.5.7.2.2for
	discussion of critical and non-critical repairs as well asAppendix 5, Section
	A.5.2for full description of statutory and regulatory requirement for
	accessibility.
Data Collection Plan	Plan for collecting valid energy consumption data for each month
	and correctly entering this data in Portfolio Manager.
Davis-Bacon Act,	The Davis-Bacon Act of 1931 established a requirement to pay the local
Labor Standards	prevailing wage to workers on federally funded or financed construction
(DBLS), Wage	projects. The National Housing Act requires that HUD multifamily mortgage
Decision	programs authorized under certain sections of the Act conform to the
	requirements of the Davis-Bacon Act. Generally these are the sections that
	authorize mortgage insurance for loans that finance new construction or
	substantial rehabilitation activities. HUD’s Office of Labor Relations
	oversees Davis-Bacon compliance and provides written guidance applying
	Davis Bacon Act requirements and Department of Labor, Bureau of Labor
	Standards rules to construction projects financed with HUD insured
	mortgages. A key aspect of this oversight is the selection of the appropriate
	"wage decision" (or sometimes multiple "wage decisions") for a project
	depending on its location and the content of the work. The Department of
	Labor periodically publishes prevailing wage rates in regional labor markets
	for trades workers engaged in "residential, heavy, or heavy highway
	construction." A wage decision determines wage rates for trades in each of
	these classes of construction. Typically multifamily properties are classified
	as "residential" and must adhere only to a single wage decision, but
	exceptions exist for projects with more intense construction activity.
Debt service	See "Criterion 5.
mortgage, Debt
Service Coverage
Ratio
Deeming Notice	See HUD’s Alternative Accessibility Standard set forth in HUD's notice at 79
	Fed. Reg. 29,671 (May 23, 2014) (“Deeming Notice”), permitting HUD
	recipients of Federal financial assistance to use an alternative standard for
	purposes of complying with Section 504 and HUD’s implementing regulation

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Term	Definition
	at 24 CFR part 8. The Deeming Notice provides HUD recipients the option of
	using the 2010 ADA Standards (with certain exceptions) as an alternative to
	UFAS for new construction or alterations commencing on or after May 23,
	2014.
Deficiency Letters	A deficiency letter is issued to a lender during application processing in
	response to the missing, incomplete, or inaccurate exhibits or certifications
	or inadequate disclosures.
Domestic Principal	A Domestic Principal is an individual that acts on behalf of the partnership in
	cases where the remaining principals in the partnership are Passive foreign
	nationals.
Draws (e.g. Initial,	A draw is a periodic advance of funds from a construction lender to an
Final, Interim)	owner or developer. For an FHA insured loan this is called an "insured
	advance." An interim draw is one that takes place during the construction
	period before substantial completion. A final draw is processed at
	completion of work.
Early Start	Construction work performed after receipt by HUD of the initial application
	but before initial endorsement. Early starts are permitted only with HUD
	approval following a Firm Commitment. But some minor work may be
	deemed not an early start and allowable prior to the Firm Commitment
	subject to completion of HUD's environmental review and after approval of
	the Regional Director. See Chapter 5, Section 5.8.6.
Easements	The right, privilege, or interest that one party has in the use of the land of
	another. Typically used to reserve rights to cross or access portions of
	another's land for uses such as driveways, utility lines or storm drainage.
Effective age	The apparent age of the improvements to the real property, which may vary
	from its actual or chronological age.
Effective Demand	The estimate of "effective demand" is the pool of households with sufficient
	income and/or applicable household size that would be expected to demand
	housing of given size and quality during the Market Study forecast period,
	including the income levels and rent- to-income ratio(s) assumed in the
	study.
Encroachments	A building, a part of a building, or an obstruction that physically intrudes
	upon, overlaps, or trespasses upon the property of another.
Encumbrance	Any limitation or restriction of rights to or interests in land that affects its
	value. Includes outstanding mortgage loans, unpaid taxes, easements, deed
	restrictions.
Endorsement /	Endorsement and Closing are always simultaneous in insured mortgage
Closing (i.e. Initial,	practice. HUD practitioners use the term "Endorsement" because when the
Final)	lender and borrower close their loan HUD also "endorses" the loan for
	mortgage insurance. Absent HUD insurance, when a lender and borrower
	execute their agreed upon transaction, the event is generally called a
	"closing" or a "loan settlement." Insured mortgages for acquisition or

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Term	Definition
	refinancing of properties have no construction period and have a single
	Endorsement. For construction projects with insured advances, the initial
	endorsement of the mortgage occurs prior to the start of construction.
	(Except See "Early Start.") A second or "Final Endorsement" occurs at the
	conclusion of construction upon completion of the cost certification
	procedure. The terms of the mortgage note may be modified at this time as a
	result of certified eligible construction cost. Upon endorsement projects are
	subject to the Regulatory Agreement and HUD program requirements and
	become part of the HUD-insured portfolio.
Energy Benchmarking	Benchmarking is the practice of comparing the measured performance of a
	device, process, facility, or organization to itself over time, to its peers, or to
	established norms, with the goal of informing and motivating performance
	improvement. When applied to building energy use, benchmarking serves as
	a method to measure energy performance of buildings at a fixed point in
	time allowing comparisons to similar measurements taken at other times, or
	at other buildings or to alternative versions (designs) of the same building.
	See Chapter 6, Section 6.4.5 and Section 6.6.3.A.2 for uses of benchmarking
	in insured mortgage programs. Water use as well as energy may be
	benchmarked and in that event the term "utility benchmarking" may be
	used.
Energy Conservation	42 U.S.C. § 8287c(3). The term “energy conservation measures” is defined by
Measure (ECM)	statute as: [M]easures that are applied to a Federal building that improve
	energy efficiency and are life cycle cost effective and that involve energy
	conservation, cogeneration facilities, renewable energy sources,
	improvements in operations and maintenance, or retrofit activities. In HUD
	insured mortgage practice these same measures are employed in privately
	owned multifamily properties.
Energy Modeling	Modeling or simulation of expected building performance is a common
(Building Energy	technique for estimating and comparing utility use results achievable with
Modeling)	alternative designs or construction methods, as well as for estimating the
	performance of a completed design or combination of proposed energy
	conservation measures.
Energy Professional	Energy professionals participating in insured mortgage programs must be
	persons with not less than three years work experience evaluating utility
	consumption in multifamily buildings and employing energy modeling and
	benchmarking software, including specifically EPA’s Portfolio Manager and
	related ENERGY STAR® resources and products. Energy professionals must
	have professional certifications or credentials appropriate for analyzing
	multifamily properties. See Chapter 6, Section 6.5.3 for more detailed
	description of tasks and professional certifications
ENERGY STAR®	ENERGY STAR® is the Environmental Protection Agency's registered
	trademark for its program of recognizing energy efficient products and
	procedures, providing simple, credible, and unbiased information that
	consumers and businesses rely on to make well-informed decisions.

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Term	Definition
ENERGY STAR® Score	Specifically the Multifamily ENERGY STAR Score is an EPA trademarked
	metric that indexes a benchmarked property's Energy Intensity Score to a
	fixed sample of similarly benchmarked properties adjusting for variable
	property characteristics and local climate resulting in a 1 to 100 score
	suggesting the property's relative energy efficiency ranking measured
	against the sample. One of the requirements to qualify for a green MIP rate
	for an insured mortgage is that a property must be able to achieve and
	sustain a score of 75 or higher during the life of the mortgage. The Energy
	Intensity Score is the property's energy consumption per square foot with
	energy measured in British Thermal Units (BTUs), that is, BTUs/s.f.
Energy Verifier	As part of the certification process, a building owner or manager is required
	to have a licensed professional - an energy verifier - who can certify that a
	building's application for ENERGY STAR® certification is accurate and
	complete before it’s submitted to EPA.
engineering control	An Engineering Control is a physical measure that reduces or eliminates
	exposure to contamination.
Environmental Report	The Lender must provide information in HEROS regarding compliance with
	NEPA, the laws and authorities listed at 24 CFR 50.4, and the HUD-specific
	requirements described herein, as applicable, as well as any issues that
	might affect the acceptability of the project, including any issues of
	compliance with state environmental laws. The HEROS submission and
	uploaded documentation constitutes the Environmental Report.
Environmental	An environmental reviewis the process of reviewing a project and its
Review	potential environmental impacts to determine whether it meets federal,
	state, and local environmental standards.
EPA WaterSense	WaterSense, a voluntary partnership program sponsored by the U.S.
	Environmental Protection Agency (EPA), is both a label for water-efficient
	products and a resource for helping Americans save water.
EPA’s Portfolio	A web-based utility benchmarking application.
Manager
Equity syndicator	Tax credit equity syndicators or investors make bridge loans to fund
	required equity contributions for LIHTC, Historic or New Market Tax Credits
	during the construction or substantial rehabilitation period as described in
	Chapter 14, Section 14.14.
Escrow	An escrow is a designated account for the deposit of cash or cash equivalents
	set-aside for specifically identified purposes associated with an insured
	mortgage. Cash or cash equivalents provided by the borrower or from
	mortgage proceeds are deposited in the custody of a third party, typically the
	lender, subject to the lender's fiduciary responsibilities and a written escrow
	agreement. Funds in escrow are released for the specified purposes or upon
	termination of the escrow agreement in accordance with its terms.

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Term	Definition
Estimated Useful Life	The expected operating life of a building component or site improvement
	established in HUD's Estimated Useful Life Table. See
	https://www.hud.gov/sites/documents/EUL_FOR_CNA_E_TOOL.PDF
Excess Proceeds	Cases where the mortgage amount exceeds the costs of refinancing and all
(Cashout)	required costs, including repairs.
Fair Housing Act	Title VIII of the Civil Rights Act, 42 U.S.C. 3601. The Fair Housing Act is a
	broad statute that prohibits discrimination based upon race, color, religion,
	sex, national origin, disability, or familial status in most housing and
	housing-related transactions. HUD's regulations implementing the Act are
	found at 24 CFR Part 100.
Federal nexus	The submission of either a pre-application or firm commitment application
	to HUD.
federal undertakings	A Federal undertaking is a project, activity, or program either funded,
	permitted, licensed, or approved by a Federal Agency. Undertakings may
	take place either on or off federally controlled property and include new and
	continuing projects, activities, or programs and any of their elements not
	previously considered under Section 106 of the National Historic
	Preservation Act.
Fee simple	An ownership interest in land that is the broadest property interest allowed
	by law, extending beneath the soil to the air above, and which endures until
	the last holder dies without heirs.
FHA Number (FHA	Unique 10-digit number assigned to a loan through Case Number
Project Number)	Assignment on the FHA Connection.
Final Closing	The process of completing a financial transaction. For mortgage loans, the
	process of signing mortgage documents, disbursing funds, and, if applicable,
	transferring ownership of the property. In some jurisdictions, closing is
	referred to as “escrow,” a process by which a buyer and seller deliver legal
	documents to a third party who completes the transaction in accordance
	with their instructions.
Final distribution	Final advance refers to any remaining balance of mortgage proceeds at final
(final advance)	endorsement and takes into consideration funds necessary to set up the
	escrows for “Items of Delayed Completion” and “To Be Paid in Cash Items”.
Financial factors	Financial factors refers to the key economic assumptions that need to be
	specified when developing the long-term funding plan for the reserve for
	replacement (RfR) accounts, such as inflation rates, interest rates on the
	balances and the rate of deposit amounts. See Appendix 5, Section A.5.7.4.3.
Floodproof(ing, ed)	[A requirement for] structures to be watertight with walls substantially
	impermeable to the passage of water and with structural components having
	the capability of resisting hydrostatic loads, hydrodynamic loads, the effects
	of buoyancy, or higher standards required by the FEMA National Flood
	Insurance Program as well as state and locally adopted codes.

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Term	Definition
Formerly Used	Properties that were formerly owned by, leased to or otherwise possessed
Defense Site	by the United States and under the jurisdiction of the Secretary of Defense
	prior to October 1986.
Friable material	Friable material is a material that is easily crumbled or powdered by
	moderate (hand) pressure, typically used to describe the condition of
	hazardous materials such as asbestos.
Government	Loans originated for purchase under procedures established by certain
Sponsored Enterprise	Federally chartered and initiated corporations established for the purpose of
Transaction	supporting mortgage credit for housing and now regulated by the Federal
	Housing Finance Board. Commonly abbreviated as "GSEs" the term refers to
	the Federal National Mortgage Corporation (Fannie Mae) and the Federal
	Home Loan Mortgage Corporation (Freddie Mac)
Green Building	Multiple organizations sponsor and maintain green building certifications.
Certification	These organizations, (sometimes also referred to as “standard-keepers”),
	and their certification programs vary widely in the types of projects that can
	be certified, the jurisdictions in which the certification is available, and the
	methods used to verify green building features and compliance. The general
	purpose is to certify that certain prescribed construction materials and
	methods are used and/or that certain levels of building energy performance
	are achieved.
Green MIP rate	A favorable HUD-FHA mortgage insurance premium rate only available to
	owners of green building certified properties. SeeChapter 6, Section 6.1.2,
	Section 6.2, and Section 6.3.
ground disturbance	Ground disturbance is defined as any activity that compacts or disturbs the
	ground within a project area.
Ground lease	A ground lease is an agreement between a landowner and a tenant
	establishing a tenant's right of possession of the land subject to terms and
	conditions such as the amount and method of tenant's payment of rent and
	tenant's permitted uses of the land and the term or duration of the lease.
	Upon expiration of the Lease term, all rights to possess and use the land
	revert back to the owner.
GSE loans	See "Government Sponsored Enterprise Transaction".
HAP Contracts	HUD provides Section 8 rental subsidies to the owners of certain multifamily
	properties pursuant to a Housing Assistance Payments (HAP) Contract. The
	entity responsible for the administration of the Section 8 assistance
	pursuant to a particular HAP Contract is the designated "Contract
	Administrator". See "Section 8".
High Cost Factor(s)	See "Criterion 4".
High risk transactions	High Risk transactions include, for example, most New Construction Projects
	and projects that meet large loan underwriting criteria as set forth in

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Term	Definition
	Chapter 3, Section 3.10. Also includes transactions with leasehold (versus
	fee simple) ownership interests.
historic district	A geographically definable area, urban or rural, possessing a significant
	concentration, linkage, or continuity of sites, buildings, structures, or objects
	united by past events or aesthetically by plan or physical development. A
	district may also comprise individual elements separated geographically but
	linked by association or history.
historic property	Any prehistoric or historic district, site, building, structure, or object
	included in, or eligible for inclusion on the National Register, including
	artifacts, records, and material remains related to such a property or
	resource.
Home Investment	The Home Investment Partnership (HOME) Program provides formula
Partnership (HOME)	grants to states and localities that communities use — often in partnership
program	with local nonprofit groups — to fund a wide range of activities that build,
	buy, and/or rehabilitate affordable housing for rent or homeownership, or to
	provide direct rental assistance to low-income people.
HOPWA	The Housing Opportunities for Persons with AIDS (HOPWA Program)
	Provides housing assistance and supportive services to low-income people
	with HIV/AIDS and their families. HOPWA funds may also be used for health
	care and mental health services, chemical dependency treatment, nutritional
	services, case management, assistance with daily living, and other
	supportive services.
Housing directive	A waiver of a program directive (e.g., a programmatic requirement found in
waiver	other chapters of this MAP Guide).
Identity of Interest	(See also "Conflict of Interest.") Identity of interest means any relationship
(IOI)	(generally based on family ties or financial interests) between:
	a. the seller and purchaser (prospective owner),
	b. the owner and/or general contractor and the
	subcontractor, material supplier or equipment lessor, or
	c. the owner and the lender, which would reasonably give rise to a
	presumption that the parties to the transaction may operate in collusion
	in establishing the purchase price of the property, the cost of the
	rehabilitation work, or the terms of the financing.
Industrialized housing	Industrialized Housing refers to a wide variety of component assemblies or
	portions or entire units of housing manufactured in a factory setting away
	from the permanent housing site. The typical antonym is "stick built"
	housing which is assembly of raw materials (lumber, fasteners, adhesives,
	etc.) cut, fitted and fastened at the permanent housing site. See Chapter 5,
	Section 5.7.4.
Initial Deposit	The initial deposit is the lump sum amount of money put into the reserve for
	replacement (RfR) account at the time of endorsement or at the beginning of
	the Estimate Period to ensure adequate annual balances in the future. For

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Term	Definition
	existing properties any remaining balance from a prior or existing RfR
	account may be carried forward into a new or updated RfR account as an
	initial deposit (e.g. in an 10-year update CNA or refinancing of an existing
	insured property).
Initial Operating	An operating deficit escrow (also known as the Initial Operating Deficit
Deficit Escrow	Escrow (IOD) for construction loans) is required on all applications for new
	construction and many applications for substantial rehabilitation to provide
	funding for operating expenses and debt service when net income is not
	available during the initial lease up and stabilization period.
institutional control	An Institutional Control is a non-engineered instrument, such as
	administrative and legal control. ICs typically limit land and/or resource use
	or provide information that helps modify or guide human behavior at a site.
Insurable value,	The term "insurable value" concerns casualty insurance (fire, storm, etc.)
Property	and is referenced in various HUD documents. It is the replacement cost of
	the building(s), i.e., the cost to rebuild the building(s) should it suffer a
	complete and total loss due to fire or other perils. The insurable value is
	required for each structure in a property and is reported on HUD Form
	92329, Schedule of Insurable Values which form is now an automated output
	of the CNA e-Tool.
Insurance of advances	Insurance of advances refers to the periodic release of insured mortgage
	funds and other funds necessary for the construction, acquisition and/or
	refinancing of the project.
Insurance upon	Insurance Upon Completion (IUC) involves new construction or substantial
completion	rehabilitation where FHA insurance is not provided until the project’s
	construction is completed – there are no insured advances during the
	construction period. Consequently, many requirements are different than a
	typical 221(d)(4) Initial Closing with insurance of advances. FHA may insure
	a loan under Sections 220, 221(d)(4) and 231 of the NHA as an Insurance
	Upon Completion (IUC) loan once Certificates of Occupancy have been issued
	for all units in the Project. A HUD Firm Commitment to insure the loan must
	be issued prior to the start of construction and HUD procedures for Davis
	Bacon wage and hour compliance and inspections of construction in
	progress must be followed.
interim income	Income generated during the construction period.
International Energy	The International Code Council is the leading global source of model codes
Conservation Code	and standards and building safety solutions that include product evaluation,
(IECC)	accreditation, technology, training, and certification. The International
	Energy Conservation Code addresses assemblies, materials and construction
	methods and procedures that conserve energy. A version of the IECC is
	required for construction in HUD insured mortgage transactions. See
	Chapter 6, Section 6.1.
Intrusive examination	An “intrusive test” ...describes an examination appropriate to observed
(testing)	circumstances and relying upon standard diagnostic techniques, tools,

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Term	Definition
	probes, thermal imagery, and other equipment commonly used by relevant
	construction trades to evaluate the condition and serviceability of particular
	building components. The term specifically contrasts with the phrase "non-
	intrusive" as used in the ASTM Standard 2018-15 for capital needs
	assessments. HUD requires intrusive testing over and above the ASTM
	Standard to assure that the needs assessor is not obligated to report that a
	building condition could not be determined because it could not be observed
	in a "non-intrusive" manner. SeeAppendix 5, Section A.5.7.4.2.A.10.
In-Unit Garage	An “In-Unit Garage” is a garage that is an integral part of a unit, providing
	parking spaces only accessible to that unit’s occupants.
Invitation for Firm	An invitation letter is issued by HUD, whereby the lender must advise HUD
Application (Letter of	in writing within 30 calendar days if it plans to submit a Firm Commitment
invitation)	application. If it fails to notify HUD, the invitation letter will expire, and the
	lender will be required to repeat the Pre-Application process. Letters of
	invitation are issued and effective for 120 calendar days during which period
	the Lender must deliver the application. Lenders may request and are
	sometimes allowed an extension in this time period.
Lead-based paint	Any set of measures designed to permanently eliminate lead-based paint or
abatement	lead-based paint hazards (see definition of “permanent”). Abatement
	includes:

The removal of lead-based paint and dust-lead hazards, the permanent enclosure or encapsulation of lead-based paint, the replacement of components or fixtures painted with lead-based paint, and the removal or permanent covering of soil-lead hazards; and
All preparation, cleanup, disposal, and post abatement clearance testing activities associated with such measures.

Lead-based paint A set of measures designed to reduce temporarily human exposure or likely interim controls exposure to lead-based paint hazards. Interim controls include, but are not limited to, repairs, painting, temporary containment, specialized cleaning, clearance, ongoing lead-based paint maintenance activities, and the establishment and operation of management and resident education programs.

Leased fee A Landlord’s interest and rights to the leased property, including the right to receive rental income and a right to possess the property at the end of the lease. See Chapter 7, Section 7.15.1.C.

Leasehold A Tenant’s possessory interest in land for a term of years granted to the Tenant pursuant to a lease agreement. Upon expiration of the Lease term, all rights to possess and use the land revert back to the Landlord (Fee Simple owner) and the leasehold estate terminates. A leasehold interest can be in the land only (ground lease) or the land and building and improvements.
Level 1 Alterations Level 1 Alterations: “…include the removal and replacement or the covering of existing materials, elements, equipment, or fixtures using new materials, elements, equipment, or fixtures that serve the same purpose.” [IEBC Section

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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)

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