hud underwriting punch list
TRANSCRIPT
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 1
Section A: General Underwriting 1) Security and Collateral (Physical)
2) Reliability of the Income Stream (historically and future) (Fiscal)
3) Borrower and Operator Credit Worthiness (Compliance with Business Agreements)
Step Activity Key Point Source Document Comments
A1 Verify receipt
of check
Confirm
Application Fee:
Email received from
the check depositor
confirming check
receipt.
Correct fee amount
Verification must be
received within
three days of
application receipt.
Application Fees
are $3/$1000 (not
rounded)
-Check
Yes, Move on
Yes, Move on
No, Confirm with check
depositor
No, note discrepancy
amount and move on
A2 Do Read Lender Narrative
in its entirety (See Step
A11 before moving on
to next step.)
This will give you a
global overview of
project and where
there might be
Potential issues /red
flags to trigger you
to go to the source
document
-Lender Narrative
(01-02)
-Source Documents
(e.g. Appraisal,
PCNA, etc.)
Yes, The Lender included
recommended firm
commitment conditions
and/or waivers—review
and capture them for firm
commitment
No, Special conditions
or waivers recommended
by lender--Move on
A3 Do Begin Mortgage Credit
Supplement by listing
principals of the
transaction
To Track who is who
in the transaction
- Lender Narrative
(01-02: Executive
Summary /
Mortgagor /
Principal of
Mortgagor /
Operator / Parent
of Operator /
Management
Agent)
- Contact List (01-
08)
Yes, Listing of principles
included—Complete
Mortgage Credit
Supplemental
No, Principles not
included - Contact lender
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 2
Step Activity Key Point Source Document Comments
- Organization
Charts/Charts
(Exhibits: 03-01 / 04-
01 / 05-01 / 06-01)
A4 Do Contact Asset
Manager (AM) to
determine status of
2530
2530‘s submitted for
all applicable
participants
Firm Commitment
can not be issued if
any of the
applicable
participants have
flags in the system.
-APPS approval
-2530 documents
-2530 checksheet
-Mortgage Credit
Supplemental
-APPS Certifications
(Exhibits: 03-04 / 04-
04 / 05-04 / 07-04)
Yes, 2530s (APPS)
submitted for all
applicable participants
without any flags. (AM will
provide UW with copies of
approved APPS or
signed/approved HUD-
2530’s for each
participant.)—Move on
Yes, 2530s (APPS)
submitted for all
applicable participants,
however there are flags—
Consult with HUD AM
regarding removal of flags
prior to contacting lender
No, 2530s missing for
applicable participants--
Contact lender
A5 Check
For listing of
repairs
Lender Narrative must
include:
Listing of repairs
(critical, non-critical,
owner elected)
Estimated costs. If
loan includes repairs it
MUST include
estimated costs.
Construction Manager
must be alerted
- Lender Narrative
(01-02: Executive
Summary and
PCNA section)
- PCNA (02-03)
- Firm Commitment
(Exhibit: 01-04:
Exhibit C)
Yes, All repairs listed--
Alert the Construction
Manager who will contact
HUD Inspector.
No, Review PCNA
Email sent: _________(date)
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 3
Step Activity Key Point Source Document Comments
A6 Check for
Commercial
Space
Commercial Space, if
any, does not exceed
either 20% of the total
net area or 20% of
effective gross income.
If no to EITHER total
net OR effective
gross income, the
project is ineligible.
- Lender Narrative
(Exhibit: 01-02:
Program Eligibility-
Commercial
Space/Income)
Yes, Commercial space,
however:
<20% of total net
AND
<20% of effective
gross income -
Go to A7
Yes, Commercial space
and is greater than 20%, on
either above condition,
Contact lender for a
waiver
NOTE If waiver attached,
review for
recommendation to
Director
No Commercial space,
Skip to A8
A7 Check Does the commercial
space exceed 5% of
the square footage, or
income exceeds 5% of
the effective gross
income?
Commercial space
intended to
exclusively serve
the residents of the
facility, is not
counted toward
the limit. Also,
daycare space is
not considered
commercial space.
- Lender Narrative
(Exhibit: 01-02:
Program Eligibility-
Commercial
Space/Income)
Yes, Consult with HUD
Appraiser
No, Move on
A8 Check for
non-
conforming
use
Is present use
conforming use
(Zoning)
If use is
nonconforming it
should at least be
―legal
nonconforming‖.
If legal non-
conforming use, the
insurance must
- Lender Narrative
(Exhibit: 01-02:
Project Description -
Zoning)
Yes, legal conforming
use—Move on
No, use is legal non-
conforming with zoning
ordinance coverage -
Move on
No, use is legal non-
conforming without zoning
ordinance—Require
adequate Firm
Commitment Special
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 4
Step Activity Key Point Source Document Comments
include zoning
ordinance
coverage.
Condition
No, use is non-
conforming—Contact HUD
Legal and Lender for
comments for UW summary
A9 Check for
license
Verify
Current license(s)
covers the required
number of beds/units
Verify that the DATE on
the license is current
and is issued to correct
entity
- Lender Narrative
(Exhibit: 01-02:
Program Eligibility -
Licensing/Certificat
e of Need/Keys
Amendment)
- Licenses (Exhibit:
08-02)
Yes, License covers
number of beds, is current
and issued to correct
entity—Move on
No, License does not
include:
Current date
Correct entity
Required number
of beds
-If any of the above
checked--Contact lender
and add to Special
Conditions It will be a firm
condition
A10 Do Determine if accounts
receivable financing
(line of credit) is
proposed.
This must go
through a more
detailed review.
Complete HUD
Accounts
Receivable Punch
List
- Lender Narrative
(Exhibit: 01-02:
Special
Underwriting
Considerations-
Q11)
- Financial
Statement
Certifications
(Exhibits: 03-08 / 05-
08 / 06-08)
Yes, Notify Supervisory
Project Manager, and
Office of General Counsel
prior to initiation of HUD
Accounts Receivable
Punch List.
No, Move on
A11 Do Confirm format of
Lender Narrative
includes all required
sections.
Complete HUD
Underwriter
Verification of
Lender Narrative
Format Punch List
-Lender Narrative
(Exhibit: 01-02)
Yes, The Lender‘s
Narrative is identical to the
required Narrative format –
Move on
No, Contact Lender with
list of Narrative
deficiencies, and require
the submission of an
updated Narrative that
fully meets HUD‘s Lender
Narrative format.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 5
Section B: General Underwriting Objective 2) Reliability of the Income Stream (historically and future) (Fiscal) /Administrative Appraisal Review
Step Activity Key Point Source Document Comments
B1 Do Risk
Analysis
Worksheet
Complete the Risk
Analysis Worksheet to
determine if a full
appraisal review is
needed.
Risk Analysis
Worksheet tells
you whether you
need an HUD
appraiser or not!
-Excel spreadsheets -
3 versions of Risk
Analysis Worksheet
for NH, ALF, & B&C
Make certain to
select CORRECT
worksheet (i.e. NH,
ALF or B&C or RCF)
Total Point Awarded< 0--
HUD Appraiser required for
technical review of the
appraisal. Notify lender
summarizing reason for
review.
Total Points Awarded >0
- Move on
B2 Check loan-
to-value
Is the proposed
mortgage higher than
80% of the underwriter‘s
concluded value?
Check: divide
maximum mortgage
amount by the value
(see HUD-92264A, Line
3A)
-Lender Narrative
(Exhibit 01-02; Risk
Factors Q1 & 2)
-HUD-92264
-HUD-92264A
-Exhibit: 01-03 A&C
No, Move On YES, Lender must provide
sufficient
justification/mitigation to
support the additional risk
associated with the loan.
HUD Underwriter will have
to specifically approve this
item and may ask for
additional input & request
a discussion with the
Lender and/or HUD HQ.
B3 Check debt
service
coverage
Is the debt service
coverage of the loan
less than (a) 1.45 for
skilled nursing; (b) 1.30
for assisted living; or (c)
1.25 for independent or
board and care
facilities?
Check calculation: net
Lender Narrative
(Exhibit 01-02; Risk
Factors Q1 & 2)
-HUD-92264 &
HUD-92264A
Exhibit: 01-03 A&C
HUD-92438 Exhibit: 01-
03 D
No, Move On YES, Lender must provide
sufficient
justification/mitigation to
support the additional risk
associated with the loan.
For continuum of care
facilities, the debt
coverage for the highest
level of care should prevail
and justification could be a
calculation of how the
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 6
Step Activity Key Point Source Document Comments
income (HUD-92264 &
A) divided by annual P
& I plus MIP (HUD-
92264A & 92438)
individual components are
not lower than the
aforementioned
coverages. HUD
Underwriter will have to
specifically approve this
item and may ask for
additional input & request
a discussion with the
Lender and/or HUD HQ.
B4 Verify real
estate taxes
included
Do the underwritten
expenses include all
real estate taxes
(without tax
abatements or
incentives)?
-Annual Tax
Abatement Savings
- Lender Narrative
(Exhibit: 01-02:
Special Underwriting
Considerations-Q15;
AND Income
Approach-Expenses)
Yes, Move on No, Have HUD Appraiser
reviews taxes and
comment back if
acceptable and
provide recommendation
B5 Check for
leased land
Check to see if the
project is on leased
land?
- Lender Narrative
(Exhibit: 01-02:
Special Underwriting
Considerations-Q9)
Yes, leased land
Have HUD
Appraiser review
Appraisal Report—DO
NOT CONTINUE until
Receipt of appraisal
Review
Have MC Tech
review ground rent
No, Move on
B6 Check for
adult day
care income
Does The underwritten
income include adult
day care income?
- Lender Narrative
(Exhibit: 01-02:
Special Underwriting
Considerations-Q8;
AND Income
Yes, Consult with HUD
Appraiser whether full
review required
No, Move on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 7
Step Activity Key Point Source Document Comments
Approach-Income)
B7 Check for
deviations
Has the lender justified
any deviations from the
appraiser‘s
conclusions?
- Lender Narrative
(Exhibit: 01-02:
Executive Summary;
AND Appraisal)
- Appraisal (Exhibit:
02-01)
Yes,
Sufficiently justified--
Move on
Insufficient justification
Consult HUD Appraiser
No, justification provided
- contact lender
B8 Check for
Hypotheticals
Are there Hypothetical
or Extraordinary
Assumptions other than
completion of repairs?
- Lender Narrative
(Exhibit: 01-02:
Appraisal -
Hypothetical
Conditions and
Extraordinary
Assumptions)
- Appraisal (Exhibit:
02-01: Assumptions &
Limiting Conditions)
- Statement of Work
Yes, Consult HUD
Appraiser to confirm
acceptability or
recommend technical
review if more clarity is
necessary
No, Move on
B9 Check for
declining
market
Is there a declining
market?
If yes, have a staff
appraiser review
the market
analysis section
- Lender Narrative
(Exhibit: 01-02:
Appraisal - Market
Analysis – Q1)
Yes, Declining market--
Consult HUD Appraiser to
TEST if appraisal review is
necessary
No, Move on
B10 Check for
remaining
economic life
Has justification been
given for the
determination of the
subject‘s remaining
economic life?
Loan term is the
lesser of 75% X
economic life or
35 years.
- Lender Narrative
(Exhibit: 01-02:
Appraisal - Remaining
Economic Life)
-HUD-92264-HCF
(Exhibit: 01-03A: K-1)
- Appraisal (Exhibit:
02-01: Cost
Approach)
Yes, Move on
No, Consult with HUD
Appraiser
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 8
Step Activity Key Point Source Document Comments
B11 Check for
income
approach
emphasis
The Lender UW placed
the greatest emphasis
on the conclusions on
the Income Approach.
-Lender Narrative
(Exhibit: 01-02:
Appraisal –
Reconciliation)
Yes, Move on
No, Contact HUD
appraiser to review the
Value Reconciliation
Section of the appraisal
B12 Do review
survey and
title
Review Survey and Title
for rights of third parties
(e.g. easements) with
material effects (e.g.
Runs through middle of
building,
encroachments,
egress, land-locked)
Take concerns to
HUD appraiser IF
not addressed
appropriately in
Lender narrative
- ALTA/ACSM Land
Title Survey (Exhibit:
08-04)
- Title (Exhibit: 08-03)
- Lender Narrative
(Exhibit: 01-02:
ALTA/ACSM Land Title
Survey; AND Title)
Yes, Easements &
encroachments with
material effects --Consult
HUD appraiser and/or HUD
legal
Yes, Easements &
encroachments, however,
they have no material
affect-- Move on
No, easements and
encroachments—Move on
B13 Do notify
appraiser
Notify appraiser of
needed reviews in
addition to 4128!
(Environmental
ALWAYS required)
Sometimes there
maybe a full
appraisal review
Yes, HUD appraisal
reviews needed in addition
to completion of HUD 4128
(Environmental Review)—
HUD Appraiser contacted
& given 7 business days to
complete appraisal and
HUD 4128 reviews
No HUD appraisal
reviews required—HUD
Appraiser contacted &
given 7 business days to
complete HUD 4128
environmental review
Section C: Security and Collateral (Physical Condition) PCNA Review Security and Collateral (Physical)
Step Activity Key Point Source Document Comments
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 9
Step Activity Key Point Source Document Comments
C1 Check for
changes to
repair
conclusions
Has the
Lender
suggested
changes to
the Needs
Assessor‘s
repair
conclusions?
- Lender Narrative
(Exhibit: 01-02: Project
Capital Needs
Assessment (PCNA –
Exhibit 02-03))
Yes,
Lender‘s
changes are
justified--Move
on
Lender‘s
changes not
justified—
Consult HUD
Construction
Analyst
No, Move on
C2 Check for
repair
inspectability
Read the
repair list
are the repairs
clearly
described in
terms of
Inspectability
(location and
what the
need is)
If not inspectable,
consult
construction
analyst or ask
lender for a
clarified list
-Lender Narrative (Exhibit:
01-02: Project Capital
Needs Assessment
(PCNA)-Repairs –
Completion and
Inspection of Repairs)
- Firm Commitment
(Exhibit: 01-04: Exhibit C)
- PCNA (Exhibit: 02-03)
Yes, Repairs
clearly described—
Move on
No, Contact lender
and/or HUD Construction
Analyst
C3 Verify
compliance
with
accessibility
requirements
Is the project
in
compliance
with the Fair
Housing
Accessibility
Guidelines
(FHAG), and
Part 504 of the
Rehabilitation
Act of 1973
FHAG
Compliance: All
covered
multifamily
dwelling units
available for first
occupancy after
March 13, 1991.
Section 504/UFAS
Compliance: All
- Lender Narrative
(Exhibit: 01-02: Project
Capital Needs
Assessment (PCNA) –
Exhibit 02-03 -
Handicapped
Accessibility)
-Fair Housing Accessibility
Guidelines, and Section
504 / UFAS
Yes, In
compliance—Move
on
No, Consult with
Construction Analyst
and/or lender
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 10
Step Activity Key Point Source Document Comments
(aka – Section
504) and the
Uniform
Federal
Accessibility
Standards
(UFAS)?
If not, verify
that the
repairs are
included in
the list of
critical repairs
housing receiving
Federal financial
assistance, plus all
existing HUD
Section 232 New
Construction, and
existing HUD
Section 232
Substantial
Rehabilitation
(but only those
building elements
that underwent
alteration), built
after 1973.
C4
Determine the
adequacy of
the
Replacement
Reserve
Account for
Capital Items,
and Major
Moveable
Equipment
Has the lender
supplied a
Replacement
Reserve
Funding
Schedule
(showing all
funding
needs, and a
proposed
Initial and
Annual
Deposit) that
shows a
positive
Reserve
balance in
years 1 – 15?
Replacement
Reserve Funding
Schedule must be
attached to the
Firm Commitment
-Lender Narrative (Exhibit:
01-02: Project Capital
Needs Assessment
(PCNA)
-Exhibit 03-03;
Replacement Reserves
-Firm Commitment
(Exhibit: 01-04: Exhibit B)
PCNA (Exhibit: 02-03)
Yes, Move on No, However, If negative
balance justified—Notate
for Loan Committee UW
Summary and Move on
No, Also, negative
balance not justified—
Contact lender
C5 Determine if
justification for
deviations
Has the lender
underwriter
justified any
- Lender Narrative (01-02:
Executive Summary; AND
Project Capital Needs
Yes, deviation,
however they are
justified--Move on
No, deviation—Move on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 11
Step Activity Key Point Source Document Comments
deviations
From the third
party PCNA
Assessment (PCNA))
- PCNA (Exhibit: 02-03)
Yes, deviations,
however not
justified—Contact
lender
Section D: Credit Worthiness / Character of the Mortgagor Objectives: 1)Security and Collateral (Physical) and 3)Borrower and Operator Credit Worthiness (Compliance with Business Agreements)
Step Activity Key Point Source Document Comments
D1 Determine
the
mortgagor
Recall who the
mortgagor is,
type of
ownership
structure and
principals
Required credit
reviews and
experience
To ensure credit,
financial,
experience
review is on the
mortgagor and
principal (some
names are very
similar)
Use identified
mortgagor to
complete section
D.
- Mortgage Credit
Supplement
- Lender Narrative
(Exhibit: 01-02: Executive
Summary)
-Organization Chart
(Exhibit: 03-01)
- Organization Docs
(Exhibit: 03-02)
D2 Verify
experience
of Principals
Does the lender
narrative and
resumes for the
principals of the
mortgagor
evidence a
minimum of 3
years owning or
Gain a good
understanding of
the background
and experience
of the mortgagor
and its principals
- Lender Narrative
(Exhibit: 01-02: Mortgagor
- Experience /
Qualifications; Principal
of Mortgagor –
Experience /
Qualifications)
Yes, Move on
No, Refer to HUD Asset
Manager to determine
acceptability of
mortgagor‘ experience.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 12
Step Activity Key Point Source Document Comments
operating
SIMILAR/
RELEVANT
properties?
- Resumes for Principals of
the Mortgagor (Exhibit:
04-03)
- Mortgage Credit
Supplement and other
related documents.
D3 Check for
Credit
History
Does the
Lender‘s
Underwriting
Narrative
And Super
Certifications or
Credit Reports
for the
Mortgagor and
its principals
identify any of
the following:
a) Delinquent
Federal
Debt;
b) Judgments;
c) Suits or legal
actions;
d) Bankruptcie
s;
Tax liens?
These items must
be appropriately
resolved and
documented.
Cannot issue firm
commitment with
outstanding
issues.
- Lender Narrative
(Exhibit: 01-02: Mortgagor
- Q2-6; Principal of
Mortgagor – Q1-5)
- Certification (Exhibit: 03-
05, Part II and
attachments; Exhibit: 04-
05, Part I)
- Credit Reports (Exhibits:
03-06 / 04-06)
Yes, Consult with
HUD Mortgage
Credit Analyst (MC)
to determine if
lender addressed in
an appropriate
manner. MC will
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected.
No, Move on Notes: Credit reports must be current within 60 days of
application submission.
D4
Check for
Credit
History
Other
Business
Concerns
Does the
Underwriting
Narrative identif
y any other
business
concerns
involving
These items must
be appropriately
resolved and
documented
-Lender Narrative (Exhibit
01-02)
-Mortgagor-Q2-6
Principal of Mortgagor-
Exhibit: 04-6B, Q1-5
Yes--Consult with
HUD Mortgage
Credit Analyst (MC)
to determine if
lender addressed in
an appropriate
manner. MC will
No-Move On
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 13
Step Activity Key Point Source Document Comments
pending
judgments,
legal actions or
suits or
bankruptcy
claims as found
through a 10%
sampling of
businesses
noted on the
credit report.
-Certification Exhibit: 03-
05, Part II for mortgagor
principals
-Credit Reports – Exhibits:
03-06 & 04-06 for
mortgagor principals
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected.
D5 Evaluate
credit score
Based on the
credit payment
delinquency risk
score provided
by the credit
agency, do the
scores show
that the
Mortgagor and
its principals are
not a high risk?
OR
Do the
Mortgagor and
its principal‘s
Personal Credit
Report score
exceed 650?
Credit reports: At
a minimum, an
acceptable
commercial
credit report must
include the
following: (a.
public filings that
includes suits,
liens, judgments,
bankruptcies &
federal debt; (b.
UCC filings; (c.
credit payment
history; (d.
industry standards
showing how the
facility compares
in the areas of
financial stress &
payment trends;
and a credit
payment trends;
and (e. a credit
- Lender Narrative
(Exhibit: 01-02: Mortgagor
- Credit History; Principal
of Mortgagor – Credit
History)
- Credit Reports (Exhibits:
03-06 / 04-06)
Yes, Move on No, Consult MC to
advise about acceptability
OR outline requirements for
appropriate resolution.
Work with MC until resolved
or rejected.
Notes:
*Credit reports for newly formed single asset entities will
contain minimal information.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 14
Step Activity Key Point Source Document Comments
payment
delinquency risk
score over a 12-
month period.
Scores
determined to be
a high risk, must
be thoroughly
explained by the
lender.
Justification of
late payments,
charge offs, etc.
are required if the
score is below,
and it is justified
satisfactorily,
continue
D6 Evaluate
Financial
Stability
Has the lender
appropriately
addressed any
material
accounts
payable over
60 days?
Material amounts
are in excess of
$2,500
Aging of
Accounts
payable is a
measure of an
entity‘s current
and past
payment history
- Lender Narrative
(Exhibit: 01-02:
Mortgagor – Financial
Statements – Q4)
- Balance Sheet (Exhibit:
03-07) and Schedule of
Accounts Payable
Yes, Move on No, Contact lender to
obtain satisfactory
explanation
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 15
Step Activity Key Point Source Document Comments
D7 Evaluate
Financial
Stability
Has the lender
appropriately
addressed any
material
accounts
receivable over
60 days?
Are all
governmental
reimbursements
over 60 days
within
appropriate
time frames for
the
governmental
agency?
Material amounts
are in excess of
$2,500
Aging of
Accounts
receivable is
measure of an
entity‘s ability to
collect
- Lender Narrative
(Exhibit: 01-02:
Mortgagor – Financial
Statements – Q5)
- Balance Sheet (Exhibit:
03-07) and Schedule of
Accounts Payable
Yes, Move on No, Contact lender to
obtain satisfactory
explanation
D8 Evaluate
Financial
Stability
Are all tenants
deposit
accounts fully
funded?
Tenant deposit
accounts can
include security,
cleaning, key,
and other
deposits that can
be refunded to
the tenant
Balance
Sheets(most
recent) should
include Asset and
offset Liability
account for the
tenant deposits
- Lender Narrative
(Exhibit: 01-02:
Mortgagor – Financial
Statements – Q6)
- Balance Sheet (Exhibit:
03-07)
Yes, Move on No, Contact lender to
obtain satisfactory
explanation and resolution
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 16
Step Activity Key Point Source Document Comments
D9 Evaluate
any existing
debt
Are there any
debts on the
balance sheets
that will survive
closing?
Debts that survive
closing must
conform to HUD‘s
surplus cash, note
requirements
and the firm
commitment must
have a special
condition
Compare Notes
payable on the
most recent
Balance Sheet to
the Lender’s
Underwriting
Narrative
- Balance Sheet (Exhibit:
03-07)
- Lender Narrative
(Exhibit: 01-02: Mortgage
Determinants –
Transaction Costs –
Existing Indebtedness)
- Certification of
Outstanding Obligations
(Exhibit: 08-01)
- Pro Forma Title (Exhibit:
08-03B)
Yes, Consult with
MC to determine if
the surviving debt is
permissible. MC to
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected.
No, Move on
D10 Evaluate
existing
debt
Are any of the
debts to be
paid off less
than two years
old?
Are any of the
debts to be
paid off less
than five years
Any debt(notes
payable)placed
on the project
within the last two
years must be
reviewed to
ensure that they
meet the
definition of
―Eligible Debit‖
and do not
violate the
program intent –
no cash out
Any debt to be
refinanced that is
less than five
years old and is
- Balance Sheets
(Exhibits: 03-07 / 03-08 /
03-09)
- Lender Narrative
(Exhibit: 01-02:)
Mortgage Determinants –
Transaction Costs –
Existing Indebtedness –
Q2 & 3 (See Program
Guidance in Lender
Narrative Template.)
-Certification of
Outstanding Obligations
(Exhibit: 08-01)
- Title Search (Exhibit: 08-
03A)
Yes, However,
the debt was used
to finance repair to
the project—Move
on
Yes, And the
debt was used for
other than repair to
the project--Consult
with MC to
determine if
permissible. MC
analyst to advise
about
acceptability OR
outline
requirements for
appropriate
No, Move on Two-Year Rule: Any debt to be refinanced that is less than
24-months old will have to be investigated and must meet
the definition of ―Eligible Debt‖ below. Only 90% of the
outstanding balance of the debt under investigation
needs to be evidenced as ―eligible‖ to qualify the entire
balance.
Example: Thirteen months ago, the mortgagor obtained a
loan to replace the siding. The current balance is
$400,000. If the borrower can provide sufficient
documented evidence that clearly demonstrates the cost
and content of the expenditures within the appropriate
timeframes to qualify at least $360,000 (90% of $400,000),
the lender may include the entire $400,000 balance as
eligible debt.
Five-Year Rule: Any debt to be refinanced that is less than
five-year old AND is owed to either: a. the underwriting
HUD lender; or, b. any entity related to the HUD lender, no
matter how slight the identity-of-interest will have to be
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 17
Step Activity Key Point Source Document Comments
old and owed
to either (a)
your company
(Lender), or (b)
any entity
related to your
company, no
matter how
slight the
identity-of-
interest?
owed to either the
underwriting HUD
lender; or any
entity related to
the HUD lender,
no matter how
slight the identity-
of-interest will
have to qualify as
Eligible Debt.
Balance Sheet
(most recent)
compared to
previous years
balance sheets
resolution. Work
with MC until
resolved or
rejected.
qualified as ―Eligible Debt‖, meeting the definition below.
In this case, only the ―eligible‖ portion of the outstanding
balance qualifies.
Example: Thirty months ago, the mortgagor obtained a
loan from the HUD lender applying for mortgage
insurance. The loan was made to replace the siding. The
current balance is $400,000. The lender can only include
the qualified balance as eligible debt. For instance, if the
borrower or lender can only provide sufficient
documented evidence that clearly demonstrates the cost
and content of the expenditures within the appropriate
timeframes to qualify $375,000, the lender may only
include $375,000 balance as eligible debt.
Definition of Eligible Debt: Existing indebtedness in a
refinancing transaction is defined as:
1. Outstanding mortgage(s) incurred in connection with
the construction of the project or with capital
improvements made to the property as confirmed by
the current mortgagee.
2. Other recorded indebtedness such as mechanic's liens
and tax liens provided they did not result from personal
obligations of the mortgagor.
3. Unrecorded debt directly connected with the project
supported by documentation from the mortgagor. If
the indebtedness is not recorded, the mortgagor must
provide the Lender with documentation which
unquestionably indicates that the obligation is directly
connected to the project. Examples include:
a. Indebtedness incurred in making needed
improvements and betterments to the property.
b. Indebtedness incurred or advances made to cover
operating deficits
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 18
Step Activity Key Point Source Document Comments
4. Other eligible costs associated with paying off the
eligible debt. Examples are:
a. Reasonable delinquent and accrued interest
b. Reasonable prepayment penalties on the mortgage
c. Recording, release, and re-conveyance fees
d. Documentation or processing fees
D11 Evaluate
existing
debt
Does the
mortgagor
have any
identities of
interest with the
existing lender?
- Lender Narrative
(Exhibit: 01-02: Special
Underwriting
Considerations - Q7)
- Certification (Exhibit: 03-
05: Part V)
Yes, Consult with
MC to determine if
permissible. MC to
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected.
No, Move on
D12 Evaluate
existing
debt
1) Is any of the
existing debt
cross-
collateralized
with other
assets?
2) Is any of the
If debt is cross
collateralized,
debt must be
allocated
between each
asset in a
reasonable
manner.
- Lender‘s Narrative
(Exhibit: 01-02: Special
Underwriting
Considerations - Q2; AND
Existing Indebtedness)
- Title Search (Exhibit: 08-
03A)
- Title Exceptions (Exhibit:
08-03C)
Yes, However,
debt was allocated
proportionally
between each
asset—Move on
Yes, However,
debt not allocated
proportionately
between assets—
Contact lender
Yes—Consult
No, Move on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 19
Step Activity Key Point Source Document Comments
existing debt
Financed with a
line of credit?
with MC
D13 Check for
secondary
financing
Is there
secondary
financing
proposed?
The Lender
Narrative should
identify any
secondary
financing
proposals.
- Lender Narrative
(Exhibit: 01-02: Special
Underwriting
Considerations – Q14;
AND Source & Uses)
- Pro Forma Title (Exhibit:
08-03B)
Yes, Consult with
MC for
acceptability or
plan of action
No, Move on
Section E: Credit Worthiness/Character of the Operator/Licensee Objective: 3) Operator/Licensee Credit Worthiness (Compliance with Business Agreement
Step Activity Key Point Source Document Comments
E1 Do Recall who owns
the license
License determines the
operator. This is critical
since it tells you where
the money is!
This could be the
mortgagor
- Lender Narrative
(Exhibit: 01-02:
Program Eligibility
- Licensing/
Certificate of
Need/Keys
Amendment)
- Licenses (Exhibit:
08-02)
Yes, it clear who
owns the license—
move on
No, License is not in name
of Operator--Request
modification from Lender.
(UW may make this a special
condition and move on.)
E2 Do evaluate Review lender Make certain they - Lender Narrative Yes, No, Consult with HUD
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 20
Step Activity Key Point Source Document Comments
level of
experience
narrative and
operator resume to
determine the level
of experience
Are they qualified
to operate this type
facility?
have operated
SIMILAR/
RELEVANT properties
minimum 3 years
Gain good
understanding of the
background and
experience of the key
players:
(i.e. principals,
administrator)
This gives you an
indication of the
operators team and it‘s
stability and
experience
(Exhibit: 01-02:
Operator –
Experience /
Qualifications)
- Resume (Exhibit:
05-03A)
- Schedule of
Facilities Owned,
Operated, or
Managed
(Exhibit: 05-03B)
- Mortgage Credit
Supplement and
other related
documents.
experienced -
Move on
Asset Manager to determine
acceptability of operator‘s
experience if less than 3
years.
E3 Check
Significant
Credit Issues
Does the Lender‘s
Underwriting
Narrative
And Super
Certifications or
Credit Reports for
the Operator
identify any of the
following:
a) Delinquent
Federal Debt;
b) Judgments;
c) Suits or legal
actions;
d) Bankruptcies;
e) Tax liens?
These items must be
appropriately resolved
and documented.
Cannot issue firm
commitment with
outstanding issues.
- Lender Narrative
(Exhibit: 01-02:
Operator – Q2-6)
- Certification
(Exhibit: 05-05,
Part II and
attachments)
Yes, to any--
Consult with HUD
Mortgage Credit
Analyst (MC) to
determine if Lender
addressed in an
appropriate
manner. MC to
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected.
No, Move on
.
Notes:
Credit reports must be current within 60 days of
application submission.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 21
Step Activity Key Point Source Document Comments
E4 Check for
Credit
History
Other
Business
Concerns
Does the
Underwriting
Narrative identify a
ny other business
concerns involving
pending
judgments, legal
actions or suits or
bankruptcy claims
as found through a
10% sampling of
businesses noted
on the credit
report.
These items must be
appropriately resolved
and documented
-Lender Narrative
(Exhibit: 01-02):
Operator Exhibit:
05-6B; Q2-6
-Certification
(Exhibit: 05-05 Part
II for Operator)-
-Credit Reports –
Exhibit: 05-06B for
Operator
Yes, Consult with
HUD Mortgage
Credit Analyst (MC)
to determine if
lender addressed in
an appropriate
manner. MC will
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected.
No, Move On
E5 Do evaluate
credit score
Based on the credit
payment
delinquency risk
score provided by
the credit agency,
do the scores show
that the Operator
are not a high risk?
OR
Does the
Operator‘s or
Operator‘s
principal‘s Personal
Credit Report score
exceed 650?
Credit reports: At a
minimum, an
acceptable
commercial credit
report must include the
following: (a. public
filings that includes
suits, liens, judgments,
bankruptcies & federal
debt; (b. credit
payment history; (c.
industry standards
showing how the
facility compares in the
areas of financial stress
& payment trends; and
a credit payment
trends; and (d. a credit
payment delinquency
- Lender Narrative
(Exhibit: 01-02:
Operator – Credit
History)
Yes, Move on No, Consult HUD
Mortgage Credit Analyst to
advise about acceptability
OR outline requirements for
appropriate resolution. Work
with MC until resolved or
rejected.
Notes:
*UCC filings are not as important for Operators.
*Credit reports for newly formed single asset entities will
contain minimal information.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 22
Step Activity Key Point Source Document Comments
risk score over a 12-
month period.
Scores determined to
be a high risk, must be
thoroughly explained
by the lender.
Justification of late
payments, charge offs,
etc. are required if the
score is below, and it is
justified satisfactorily,
continue
E6 Do Evaluate
Financial
Stability
Has the lender
appropriately
addressed any
material accounts
payable (AP) over
60 days?
Material amounts are in
excess of $2,500
Aging of Accounts
payable is measure of
an entity‘s current and
past payment history
- Lender Narrative
(Exhibit: 01-02:
Operator –
Financial
Statements – Q4)
- Balance Sheet
(Exhibit: 05-07)
and Schedule of
Accounts
Payable
Yes, Move on
N/A, No Material
AP > 60 days—
Move on
No, Consult with lender to
obtain satisfactory
explanation
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 23
Step Activity Key Point Source Document Comments
E7 Do Evaluate
Financial
Stability
Has the lender
appropriately
addressed any
material accounts
receivable (AR)
over 60 days?
Material amounts are in
excess of $2,500
Aging of Accounts
receivable is measure
of an entity‘s ability to
collect
Check to ensure that
all governmental
reimbursements over 60
days are within
appropriate time
frames for that
governmental agency.
See lender‘s narrative
for backup
- Lender Narrative
(Exhibit: 01-02:
Operator –
Financial
Statements – Q5)
- Balance Sheet
(Exhibit: 05-07)
and Schedule of
Accounts
Payable
Yes, Move on
N/A, No Material
AR > 60 days—
Move on
No, Consult with lender to
obtain satisfactory
explanation
E8 Evaluate
cash flow for
financial
condition
Is the Net
Operating Income
(NOI) negative or
declining for the
year-to-date and
last 3 fiscal years (as
applicable)?
If negative NOI, review
lender narrative to
assess justification
NOI is before
depreciation and
amortization and lease
payment
In cases where there is
no operator or the
operator is newly
formed, review the
Financial Statements (P
and L/Income
Statement) of the
Mortgagor.
- Lender Narrative
(Exhibit: 01-02:
Operator –
Financial
Statements – Q3)
- Operator
Financial
Statements
(Exhibits: 05-07 /
05-08 / 05-09 / 05-
10)
Yes
Justified—
Move on
Not justified—
further review
and explanation
required from
lender
No, Move on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 24
Step Activity Key Point Source Document Comments
E9 Evaluate
state
surveys
Does the state
surveys identify
(during last 3 yr
period) any
instances of actual
harm and/or
immediate
jeopardy
Determine if corrective
action plan exists and
state is satisfied
SNIF should not have G
ratings or higher (G, H,
I..)
Even for those that are
closed, but systemic,
may decide to prompt
special term and
condition and probing
- Lender Narrative
(Exhibit: 01-02:
Operation of
Facility – State
Surveys)
- State Licensing
Inspection
Reports (Exhibit:
09-10)
-Corrective
Action Plan and
State satisfaction
letters
-Medicare.gov
No, findings -
Move on
Yes, findings,
letter and plan justified.
(State has issued letter
approving corrections/plan.
Contact State as needed.)
Move on
Open findings with no
plan - Contact lender for
plan and copy of letter from
State
E10 Evaluate
Sufficiency
of Lease
Payment
Is the lease
payment sufficient
to provide debt
coverage after the
costs of the
mortgage?
Cost of the mortgage
includes principal
interest, MIP, real estate
taxes, insurance
premiums,
Replacement reserves
and any other costs
required by HUD
- Lender Narrative
(Exhibit: 01-02:
Operation of
Facility –
Operating Lease)
- Operating Lease
(Exhibit: 05-11)
- Firm
Commitment (01-
04: Condition 1, 4)
Yes, Move on
No, special condition
required in firm commitment
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 25
Step Activity Key Point Source Document Comments
- HUD-92264-HCF
(Exhibits: 01-3A:
E3, E40-41, E38,
E46)
-HUD-92438
(Exhibit: 01-03D)
E11 Do Review 6
year PLI
claims
history
Are there any
patterns or
significant claims?
Ignore anything under
$35,000
This is about
PROFESSIONAL LIABILITY
(PL)—claims history
might include items not
considered PL
- Lender Narrative
(Exhibit: 01-02:
Insurance –
Professional
Liability Insurance
– Q2-5)
- Loss History
(Exhibit: 10-03)
- Potential Claims
Certification
(Exhibit: 10-04)
Yes, significant,
however lender
addressed
satisfactory - Move
on
Yes, significant
however lender did
not address
satisfactory -
Consult with
mortgage credit
and if needed,
contact lender for
resolution
No, patterns or
significant claims-- Move on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 26
Step Activity Key Point Source Document Comments
E12 Review
adequacy
of PLI
coverage
Is coverage
adequate to meet
past and potential
claims?
The minimum PLI
coverage is $1M per
occurrence and $3M
aggregate (w/
maximum $100K
deductible)
If operator has
numerous PL claims
made in past 6 years
($X> $35K) pending or
potential, critically
review UW narrative
and analysis of
anticipated claims
- Lender Narrative
(Exhibit: 01-02:
Insurance –
Professional
Liability Insurance
– Q2-5)
- Loss History
(Exhibit: 10-03)
- Potential Claims
Certification
(Exhibit: 10-04)
Yes, Move on
No, Consult with HUD Asset
Manager and/or lender to
confirm and resolve
E13 Review
adequacy
of PLI
coverage
If the current policy
provides ―per
occurrence‖
coverage, has the
operation been
cover by ―per
occurrence‖
coverage for the
entire statute of
limitations period?
If the current policy
provides ―claims
made‖ coverage,
does the current
ACORD show a
―retroactive date‖
covering the entire
statute of limitations
―Per Occurrence‖
coverage means that
a claim is covered as
long as the incident
occurred while the
policy was in affect,
regardless of the claim
date.
The term of the PLI must
provide coverage for
current operations
through the expected
loan closing date, and
all past operations
during the applicable
statute(s) of limitation
period(s).
- Lender Narrative
(Exhibit: 01-02:
Insurance –
Professional
Liability Insurance
– Summary and
Q6)
- Evidence of PLI
coverage for
statute of
limitations period
(Exhibit: 10-05)
-Statute of
Limitations
website:
link
Yes, Email
approval to Legal
No, Consult with HUD
Mortgage Credit Analyst and
notify lender
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 27
Step Activity Key Point Source Document Comments
period? ―Claims Made‖
coverage means that
a claim is covered only
if the claim is made
during the policy
period, regardless of
the date of the
incident.
E14 Review
insurance
rating of
carrier
Is rating of
insurance carrier
acceptable?
Insurance company
must be rated by AM
Best ―B++‖.
Or if carrier is a Risk
Retention Group, it
must be rated by A.M.
Best ―B++‖ or better, or
by Demotech at ―A‖ or
better.
- Lender Narrative
(Exhibit: 01-02:
Insurance –
Professional
Liability Insurance
– Summary)
- Evidence of
Insurer‘s Rating
(Exhibit: 10-07)
AM Best link
Demotech link
Yes, Move on
No, HUD Mortgage Credit
Analyst consulted to confirm
rating If rating of insurer
verified less than
acceptable contact lender
(this may stop the deal)
E15 Verify Insurance
carrier/provider is
licensed or
authorized ―surplus
lines carrier” in the
state where the
subject property is
located
Caution: The broker is
not the insurance
carrier.
Caution: There may be
more than one
insurance carrier on the
ACORD certificate.
Select the one which is
providing the PLI policy.
Most insurance
information can be
found on a States
-Lender Narrative
(Exhibit: 01-02:
Insurance –
Professional
Liability Insurance
-Summary)
-Evidence of PLI
coverage for
statute of
limitations period
(Exhibit: 10-05)
Yes, Move on
No, They are not
authorized in the State
where the project is located
- consult with MC. If advised
by MC, contact lender .
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 28
Step Activity Key Point Source Document Comments
Insurance Commission
website. (Search for
States Insurance
Commissioner)
Surplus Lines of
Insurance Information
for Region 10 States.
Surplus Line Insurance
Carriers are not
licensed in the States
but are authorized to
do business in the
State.
Washington: Call the
Surplus Line Association
of Washington at 206-
682-3409 or Ken Coons
with the State of
Washington Insurance
Commission at 206-464-
5311. Ask if the
Insurance Carrier has
permission to do
business in the state.
WA website link
Surplus line broker and
premium finance
licensing data is not
available on this
website.
Oregon: link
-State Insurance
Commission
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 29
Step Activity Key Point Source Document Comments
Idaho: link
Alaska: AK 2008 link
Single-Asset Entity with no parent company, Skip Section F.
Section F: Credit Worthiness/Character of the Owner/Operator facility Operator/Parent This section NA if there is a single-entity, non-owner operated (separate management agent) parent
Objective 3) Borrower and Operator Credit Worthiness (Compliance with Business Agreements)
Step Activity Key Point Source Document Yes No Comments
F1 Do Identify all the
facilities that are
operated by the
Parent company
Does it appear that
the parent company
has significant
financial strength to
carry the child/
children?
This is critical because
the financial strength
or instability of the
parent has a direct
effect on the
operator! If it
appears that the
parent might weaken
the subject facility
and it is of concern.
- Lender Narrative (Exhibit:
01-02: Parent of Operator)
- Schedule of Facilities
Owned, Operated, or
Managed (Exhibit: 06-03B)
- Financial Statements
(Exhibits: 06-07 through 06-
10)
Yes, Move on
No, it is not clear if
parent has other facilities
- contact lender
No, parent company
does not appear to have
requisite financial
strength -
If necessary consult with
mortgage credit—
contact lender
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 30
Step Activity Key Point Source Document Yes No Comments
F2 Do Check SP Score. Is it
―A‖ or Greater.
If SP has rated the
Parent as an ―A‖ they
are low risk and HUD
will consider the
parent company
acceptable without
further review.
- Credit Report
- Lender Narrative (Exhibit:
01-02: Parent of Operator
- Credit History)
Yes, SP score
―A‖ or above—
Move on to
Section G
No, SP score < ―A‖
then continue to
complete the rest of
section F
Notes:
Credit reports must be current within 60 days of
application submission.
F3 Review Lender‘s
discussion of credit
ratings below SP ―A‖
for acceptability
If rating is not at an
acceptable level to
skip section F Lender
should discuss rating.
- Credit Report
-Lender Narrative (Exhibit:
01-02: Parent of Operator
- Credit History)
Yes, Credit rating
has been
acceptably
discussed by
Lender – Move On
No, Credit rating has not
been acceptably
discussed by Lender –
Contact Lender
F4 Do
Check that the
parent company has
acceptable
payment history and
patterns?
Check that Accounts
Payable (AP)< 60
days
Check Credit Report
for payment history
Looking for parent‘s
history of significant
untimely payments.
- Lender Narrative (Exhibit:
01-02: Parent of Operator
Credit History)
- Balance Sheet (Exhibit:
06-07) and Aging of
Accounts Payable
- Credit Report (Exhibit: 06-
06)
Yes, AP aging <
60 days & credit
report shows no
significant
derogatory
payment issues—
Move on
No, AP aging > 60
days or credit report
showed significant
derogatory issues, but
lender provided
acceptable discussion
and justification - Move
on
No, AP > 60 days or credit
report showed significant
derogatory issues with no
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 31
Step Activity Key Point Source Document Yes No Comments
acceptable discussion by
lender - contact lender
F5 Check for
Credit History
Other
Business
Concerns**
Does the
Underwriting
Narrative identify any
other business
concerns involving
pending judgments,
legal actions or suits
or bankruptcy claims
as found through a
10% sampling of
businesses noted on
the credit report.
These items must be
appropriately
resolved and
documented
-Lender Narrative (Exhibit:
01-02): Operator /Parent
Exhibit: 06-6B; Q1-2
-Certification (Exhibit: 06-
05 Part II for Operator)-
-Credit Reports – Exhibit:
06-06B for Operator
Yes--Consult
with HUD
Mortgage Credit
Analyst (MC) to
determine if
lender addressed
in an appropriate
manner. MC will
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected
No-Move On
Notes:
**If we are accepting the parent operator based
on an S&P rating then a review of other business
concerns would not be necessary.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 32
Step Activity Key Point Source Document Yes No Comments
F6 Do Evaluate cash flow
for financial
condition by
reviewing Profit and
Loss statement (P&L)
for cash flow. Is cash
flow positive?
- Lender Narrative (Exhibit:
01-02: Parent of Operator)
- Financial Statements
(Exhibits: 06-07 through 06-
10)
Yes, Positive
cash flow. Move
On
No, Negative cash
flow was acceptably
discussed and justified by
the lender-- Move On
No, Negative cash
flow was not acceptably
discussed and justified by
the lender-- Obtain
explanation from the
lender.
F7 Do Evaluate net working
capital (working
capital minus
restricted cash--i.e.
tenant security
deposits, garnished
wages, restricted
savings account).
Use net amount and
the quick ratio to
evaluate.
Working capital is
current assets less
current liabilities.
Quick ratio = Current
assets less restricted
current assets divided
by current liabilities
- Lender Narrative (Exhibit:
01-02: Parent of Operator)
- Financial Statements
(Exhibits: 06-07 through 06-
10)
Yes, Quick ratio
> 1.05--Move On
No, Quick Ratio <1.05
was acceptably
discussed and justified by
the Lender--
Move On
No, Quick Ratio <1.05
was not acceptably
discussed and justified by
the lender - Contact the
lender
Section G: Credit Worthiness/Character of Management Agent
This section NA if there is an Operator/Lessee
Objective 3) Management Agent Credit Worthiness (Compliance with Business Agreements)
Step Activity Key Point Source Document Comments
G1 Check Confirm the facility is not
leased and the license
is in the name of the
Determines if the
management agent
directly controls the
-Lender Narrative (Exhibit:
01-02: Program eligibility
Yes, the facility
is not leased. A
detailed review of
No, license is not in
name of Management
Agent – Request
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 33
Step Activity Key Point Source Document Comments
management agent operation of the facility
Criteria to determine
whether agent directly
controls the operations:
*provides patient care;
*holds the license;
*controls books to the
extent that the agent
can enter into an
accounts receivable
financing arrangement.
-Licensing/Certificate of
Needs/Keys Amendment)
-Licenses (Exhibit: 08-02)
the Management
Agent is required.
A Management
Agent will be
required to sign a
certification.
Yes, the
Management
Agent contracts
in its own name
with the residents.
A detailed review
of the
Management
Agent is required.
A Management
Agent will be
required to sign a
certification.
Yes, the
Management
agent is named
on the license for
the facility. A
detailed review of
the Management
Agent is required.
A Management
Agent will be
required to sign a
certification.
Special
Modification from Lender
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 34
Step Activity Key Point Source Document Comments
Condition: If the
Management
Agent contracts
in its own name
with the residents
or is named on
the license for the
facility, at closing
the Management
Agent will be
required to sign
an Operator
Regulatory
Agreement and a
Security
Agreement
acceptable to
Hub.
G2 Do evaluate
Level of
Experience
Review lender narrative
and management
agent resume
determining the level of
experience. Are they
qualified to manage this
type of facility?
Make sure they have
managed
Similar/Relevant
properties minimum 3
years.
Gain good
understanding of the
background and
experience of the key
player: (i.e. principals).
This gives you an
indication of the
management agent‘s
team stability and
experience.
Lender Narrative (Exhibit:
01-02: Management
Agent experience/
qualifications) resume
(Exhibit: 07-03) Schedule
of facilities owned and/or
managed (Exhibit: 07-03)
Yes,--
experienced –
Move on
No, Consult with HUD
Asset Manager to
determine acceptability
of Management Agents
experience is less than 3
years.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 35
Step Activity Key Point Source Document Comments
G3 Do Evaluate REAC (Real
Estate Assessment
Center) Rating for
property(s) owned and
managed.
Have any owned or
managed properties
received a score of less
than 80?
Identifies concerns of
the agent‘s
management of their
properties
-Lender Narrative (Exhibit:
01-02): Management
Agent
Experience/Qualifications)
-Past and Present
Performance (Exhibits: 07-
03, 07-05)
Yes, The REAC
score for the
property(s) is(are)
less than 80 –
consult with Asset
Manager to
determine
reasons for score,
if a work out plan
for correction has
been
implemented and
the acceptability
of the
management
agent.
No, None of the
property(s) received a
REAC score less than 80 –
Move on
G4 Do Evaluate Management
Occupancy Review
(MOR) Rating for
property(s) owned and
managed
Have any owned or
managed properties
received a rating of
unsatisfactory
Identifies concerns of
the agent‘s
management of their
properties
-Lender Narrative(Exhibit:
01-02): Management
Agent
Experience/Qualifications)
-Past and Present
Performance (Exhibits: 07-
03, 07-05)
Yes, An MOR
rating on the
property(s) is(are)
rated
unsatisfactorily –
consult with Asset
Manager to
determine
reasons for rating,
if a work out plan
for correction has
been
implemented and
the acceptability
of the
management
agent.
No, None of the
property(s) received an
unsatisfactory rating -
Move on
G5 Check
Significant
Does the Lender‘s
Underwriting Narrative
These items must be
resolve and
-Lender Narrative (Exhibit:
01-02: Management
Yes, to any-
Consult with HUD
No, Move on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 36
Step Activity Key Point Source Document Comments
Credit Issues and Super Certifications
or Credit Reports for the
Management Agent
identify any of the
following:
a) Delinquent
Federal Debt;
b) Judgments;
c) Suits or legal
actions;
d) Bankruptcies;
e) Tax liens?
documented.
Cannot issue firm
commitment with
outstanding issues.
Credit History) Mortgage Credit
Analyst (MC) to
determine if
Lender addressed
in an appropriate
manner. MC to
advise about
acceptability OR
outline
requirements for
appropriate
resolution. Work
with MC until
resolved or
rejected.
G6 Do evaluate
credit score
Based on the credit
payment delinquency
risk score provided by
the credit agency, does
the score show that the
Management Agent is
not a high risk?
Credit reports: At a
minimum, an
acceptable
commercial credit
report must include the
following: (a. public
filings that includes suits,
liens, judgments,
bankruptcies & federal
debt; (b. UCC filings; (c.
credit payment history;
(d. industry standards
showing how the
facility compares in the
areas of financial stress
& payment trends; and
a credit payment
trends; and (e. a credit
payment delinquency
risk score over a 12-
-Lender Narrative
(Exhibit: 01-02:
Management Agent-
Credit History))
-Credit Reports (Exhibit:
07-05)
Yes, Move on
Score exceeds or
derogatory issues
reviewed and
justified
satisfactorily
No, Consult HUD
Mortgage Credit Analyst
(MC) to advise about
acceptability OR outline
requirements for
appropriate resolution.
Work with MC until
resolved or rejected.
Notes:
Credit reports must be current within 60 days of
application submission.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 37
Step Activity Key Point Source Document Comments
month period.
Scores determined to
be a high risk, must be
thoroughly explained
by the lender.
Justification of late
payments, charge offs,
etc. are required if the
score is below, and it is
justified satisfactorily,
continue
G7 Do Evaluate
Financial
Stability
Has the lender
appropriately
addressed any material
accounts payable (AP)
over 60 days?
Material amounts are in
excess of $2,500
Aging of Accounts
payable is measure of
an entity‘s current and
past payment history
- Lender Narrative (Exhibit:
01-02:
Operator – Financial
Statements – Q4)
- Balance Sheet (Exhibit:
05-07) and Schedule of
Accounts Payable
Yes, Move on
N/A, No
Material AP > 60
days—Move on
No, Consult with
lender to obtain
satisfactory explanation
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 38
Step Activity Key Point Source Document Comments
G8 Do Evaluate
Financial
Stability
Has the lender
appropriately
addressed any material
accounts receivable
(AR) over 60 days?
Material amounts are in
excess of $2,500
Aging of Accounts
receivable is measure
of an entity‘s ability to
collect
Check to ensure that all
governmental
reimbursements over 60
days are within
appropriate time
frames for that
governmental agency.
See lender‘s narrative
for backup
- Lender Narrative (Exhibit:
01-02:
Operator – Financial
Statements – Q5)
- Balance Sheet (Exhibit:
05-07) and Schedule of
Accounts Payable
Yes, Move on
N/A, No
Material AR > 60
days—Move on
No, Consult with
lender to obtain
satisfactory explanation
G9 Evaluate cash
flow for
financial
condition
Is the Net Operating
Income (NOI) negative
or declining for the year-
to-date and last 3 fiscal
years (as applicable)?
If negative NOI, review
lender narrative to
assess justification
NOI is before
depreciation and
amortization and lease
payment
In cases where there is
no operator or the
operator is newly
formed, review the
Financial Statements (P
and L/Income
Statement) of the
Mortgagor.
- Lender Narrative (Exhibit:
01-02: Operator –
Financial Statements – Q3)
- Operator Financial
Statements (Exhibits: 05-07
/ 05-08 / 05-09 / 05-10)
Yes
Justified—
Move on
Not
justified—
further review
and
explanation
required from
lender
No, Move on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 39
Step Activity Key Point Source Document Comments
G10 Check
Management
Agreement
Does the Agreement
meet HUD requirements
including;
A) Description of
services and fees
B) Description of
computation and
payment
C) Description of
HUD‘s right to
require termination
of agent and/or
take possession of
the property
D) Statement as to
HUD‘s rights and
requirements
prevailing
E) Statement as to all
accounts,
investments and
records turned over
within 30-days after
termination
F) Statement that
―hold harmless‖
clause is prohibited
G) Description of
contract‘s length of
term
A legal document
agreement between
the owner and
management agent
that protects the two
parties and ensures
HUD‘s interests in the
property, its assets and
its operation are
protected
-Lender Narrative
(Exhibit: 01-02:
Management
Agent
-Management
Agreement (Exhibit: 07-
02))
Yes, Move on
No, Contact Lender
Step Activity Key Point Source Document Comments
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 40
Step Activity Key Point Source Document Comments
G11 Check Check the Lender
Narrative for review of
the
Owner/Management
Agent‘s Agreement
form HUD-9839-B
Document provides
information regarding
management fee
percentage and term
of the owner/agent
agreement that
matches the ones
noted in the
Management
Agreement.
-Lender Narrative
(Exhibit: 01-02)
-Management Agent‘s
Agreement (Exhibit: 07-
01B-9839))
Yes, Move on
No, Contact Lender
G12 Do
Check
The Lender Narrative for
review of the
Management Entity
Profile form HUD-9832
The document provides
information about the
management agent
entity, principals,
including experience
and property
management and
operating procedures
-Lender Narrative (Exhibit:
01-02)
-Management Agent‘s
Agreement (Exhibit: 07-
01A-9832))
Yes, Move on
No, Contact Lender
G13 Do Review 6
year PLI
claims history
Are there any patterns
or significant claims?
Ignore anything under
$35,000
This is about
PROFESSIONAL LIABILITY
(PL)—claims history
might include items not
considered PL
- Lender Narrative (Exhibit:
01-02: Insurance –
Professional Liability
Insurance – Q2-5)
- Loss History (Exhibit: 10-
03)
- Potential Claims
Certification (Exhibit: 10-
04)
Yes, significant,
however lender
addressed
satisfactory -
Move on
Yes, significant
however lender
did not address
satisfactory -
Consult with
mortgage credit
and if needed,
No, patterns or
significant claims-- Move
on
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 41
Step Activity Key Point Source Document Comments
contact lender for
resolution
G14 Review
adequacy of
PLI coverage
Is coverage adequate
to meet past and
potential claims?
The minimum PLI
coverage is $1M per
occurrence and $3M
aggregate (w/
maximum $100K
deductible)
If operator has
numerous PL claims
made in past 6 years
($X> $35K) pending or
potential, critically
review UW narrative
and analysis of
anticipated claims
- Lender Narrative (Exhibit:
01-02: Insurance –
Professional Liability
Insurance – Q2-5)
- Loss History (Exhibit: 10-
03)
- Potential Claims
Certification (Exhibit: 10-
04)
Yes, Move on
No, Consult with HUD
Asset Manager and/or
lender to confirm and
resolve
G15 Review
adequacy of
PLI coverage
If the current policy
provides ―per
occurrence‖ coverage,
has the operation been
cover by ―per
occurrence‖ coverage
for the entire statute of
limitations period?
If the current policy
provides ―claims made‖
coverage, does the
current ACORD show a
―retroactive date‖
covering the entire
statute of limitations
period?
―Per Occurrence‖
coverage means that a
claim is covered as
long as the incident
occurred while the
policy was in affect,
regardless of the claim
date.
The term of the PLI must
provide coverage for
current operations
through the expected
loan closing date, and
all past operations
during the applicable
statute(s) of limitation
- Lender Narrative (Exhibit:
01-02: Insurance –
Professional Liability
Insurance – Summary and
Q6)
- Evidence of PLI
coverage for statute of
limitations period (Exhibit:
10-05)
-Statute of Limitations
website:
link
Yes, Email
approval to Legal
No, Consult with HUD
Mortgage Credit Analyst
and notify lender
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 42
Step Activity Key Point Source Document Comments
period(s).
―Claims Made‖
coverage means that a
claim is covered only if
the claim is made
during the policy
period, regardless of
the date of the
incident.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 43
Section H: Firm Commitment
Step Activity Key Point Source Document Yes No Comments
H1 Do
Do
Do
Check
Collect the original
HUD 4128 signed by
the HUD Appraiser.
Review 4128 findings,
and
recommendations
Route for signature to
Program Center
Director with your
recommendation
Is the project
recommended for
approval?
This must be
completed prior to
firm commitment.
All 4128 conditions
must be resolved
prior to issuance of
firm commitment,
with exception of O&
M plan if there is
good cause.
If underwriter does
not concur with
appraiser‘s finding,
consult with
supervisor prior to
routing to Director.
Signatures required
on 4128 include: HUD
appraiser, HUD
underwriter, program
center director and, if
project exceeds 200
units the regional
environmental
officer.
- Phase 1 (Exhibit: 02-02)
- Phase 2 (Exhibit: 02-02, if
applicable)
- Lender Narrative (Exhibit:
01-02: Environmental)
-HUD-4128
Yes, Move on
Yes, ―with
conditions‖ -Notify
lender of the
conditions. The
lender must
resolve prior to
issuance of firm
No, Immediately, notify
lender of environmental
findings and advise the
project must be rejected
unless resolved.
H2 Check 1) Have comments
have been received
from Legal?
Prior to issuance of
Firm Commitment
-Legal‘s review of leases
and organizational
documents for
commercial and
subordination issues
Yes, Review
No, Retrieve
comments from HUD
legal
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 44
Step Activity Key Point Source Document Yes No Comments
2) Has legal
requested changes
to leases and/or
organizational
documents?
Yes, Review
requested
changes and
insert as special
condition to Firm
Commitment
No, insert standard
condition requiring the
lease and organizational
documents to conform to
HUD standards.
H3 Check Make certain that all
required ‗to do‘s‘
have been
completed and
returned
Typical things include
all responses from
Technicians and/or
Lender
Yes, Move on No, Follow up with
outstanding ‗to do‘s
H4 Compare Draft Firm
Commitment
submitted by lender
to HUD‘s master
template
Is the firm
commitment
consistent with
HUD-92264-HCF
HUD-92264A
Critical/Non-
Critical/Owner-
elective Repairs?
If there are variances
in the HUD-92264-HCF
or HUD-92264A, return
to lender for
correction. Other
variances can be
corrected by HUD.
UW will verify lender‘s
numbers (maximum
mortgage amount,
P&I, etc.)
- Draft Firm Commitment
submitted by Lender
(Exhibit: 01-04).
- HUD-92264-HCF (Exhibit:
01-03A)
- HUD-92264-A (Exhibit: 01-
03C)
- HUD-92438 (Exhibit: 01-
03D)
Yes, there are
variances
between the Firm
Commitment and
HUD-92264-HCF
and/or HUD-
92264-A - Return
to lender for
correction**
Yes, there are
variances, but not
with the HUD-
92264-HCF and/or
HUD-92264-A -
HUD UW can
make correction
to the Firm
No, Move on
If the maximum mortgage amount was reduced,
a portion of the exam fee may be refunded.
Advise lender. Sample language is a follows:
A fee of $__________ was submitted/collected
with the firm commitment application. Due to a
change in the maximum mortgage amount, the
actual fee due is $__________. A request for a
refund of $________ can be submitted on or after
the day of closing.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 45
Step Activity Key Point Source Document Yes No Comments
Commitment
Yes, There are
Account
Receivable (AR)
Special Conditions
- Include AR
special conditions
from AR Punch List
H5 Do
Do
Draft HUD
Underwriter Summary
for loan committee
Obtain signature
from Underwriter
Supervisor.
-HUD Underwriting
Summary boiler plate
posted on Sharepoint
H6 Do
Do
Do
Schedule loan
Committee meeting
Send copy of HUD
Underwriter Summary
to Loan Committee
members (or those
acting for members).
Set up conference
call (800 #) and
emails call in detail to
Committee.
Email should establish
a time the following
day that committee
will meet via conf.
call. Send via
Outlook scheduler so
that Committee
members can
confirm attendance.
Loan Committee to
meet and reach
decision within 1 day
of HUD Underwriter
Summary signed off
by Supervisor.
Distribution of
underwriting
documents
-HUD Loan Committee
Punch List
Committee
approves the
issuance of the
firm commitment.
OIHCS
Designee/HUD
Director signs:
Firm Commitment
HUD-2453MM
(signs 2 originals)
HUD-92264
HUD-92264A
HUD-92329
HUD-2447
HUD-9839(B) if
applicable
Loan Committee does
not approve firm
commitment application.
Firm commitment
application is rejected.
Lender is advised.
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 46
Step Activity Key Point Source Document Yes No Comments
Lender:
One original HUD-
2453MM*
Copies of the:
HUD-92264
HUD-92264A
HUD-92329
HUD-2447
HUD-9839A,B,C if
applicable
HUD:
One original HUD-
2453MM
Retains original:
HUD-92264
HUD-92264A
HUD-92329
HUD-2447
HUD-9839(B) if
applicable
Mortgagor and
Mortgagee must sign
and return to HUD.
H7 Do
Schedule Closing
Once the Firm
Commitment is
issued, the HUD
Closing Attorney will
recommend two (2)
closing dates to the
Lender and Lender
Attorney via email.
Lender and Lender
Attorney will confirm
- HUD Underwriter Closing
Punch List
Yes, HUD
Closing Attorney
has sent email to
Lender and
Lender Attorney
two (2) possible
closing dates.
Yes, Lender
and Lender
Attorney have
No, HUD Closing
Attorney has not sent
email with
recommended closing
dates. Follow-up with
HUD Closing Attorney.
No, Closing date has
not been set. Follow-up
with HUD Closing
Attorney.
Date email to Lender and Lender Attorney sent:
Date of confirmed/scheduled closing:
Process Name: 232/223f Underwriting Punch-list
For: Multifamily Housing Processing DATE: XX/XX/XX
ASSIGNED HUD UNDERWRITER: XXXXXXXXXXX
PROJECT NAME: XXXXXXXXXXX
PROJECT NUMBER: XXX-XXXXX
Version Date: July 24, 2008 47
Step Activity Key Point Source Document Yes No Comments
date with HUD
Closing Attorney and
in conjunction with
the HUD Underwriter.
confirmed and
closing date has
been set