11.2.2 Firm — HUD Multifamily Accelerated Processing (MAP)

A. The Lender’s MAP Underwriter must review the in-house and third-party reports to ensure the processing of the loan is in accordance with the requirements of HUD program and processing requirements and determine that the loan recommendation represents an acceptable risk and is financially sound.

B. The MAP Underwriter must document any changes made to the technical reports and must submit an updated, signed Standardized Underwriter’s Narrative describing all relevant aspects of the mortgage transaction including a full discussion of the following:

Characteristics of the proposed mortgage loan that make it financially sound or an acceptable risk, with the reasons the Lender recommends the loan.
All significant risk factors and risk mitigants.

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Chapter 11 Lender Underwriting, HUD Review and Closing 11.2 Lender Underwriting

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Changes in the project from the pre-application stage including changes in sponsorship, proposed development team and Lender reviewers.
Evaluation of the mortgage credit and financial capacity of the principals of the Borrower and its ability to repay the loan.
Evaluation of the financial and technical capacity of the General Contractor to build/rehabilitate the project.
Property financial analysis including both actual operating history and projected trends.
Property physical description.
History of Borrower’s involvement including the Borrower’s equity investment in the property, and if applicable, any previous engagements to obtain FHA financing for the property.
Analysis of market, rents, expenses and estimated rent-up and operating deficit.
Adequacy of the proposed Reserve for Replacement.
Summary of environmental conditions, including any issues or potential issues and their mitigants.
Documentation of any changes the Underwriter made to the conclusions of the appraisal/technical reports with justification.
Requests for any waivers of HUD program and processing requirements with supporting documentation and justification summary.
Certifications from the individual reviewers (see Section 11.2.3.B).
Notify HUD of the rate lock and allow sufficient time to process any required amendment to the Firm Commitment prior to endorsement. If the Borrower and the Lender choose to rate lock prior to the submission of draft closing documents to HUD, they do so at their own risk. As always, Lenders and Borrowers assume the risk of having to pay extension fees.
Further details on the required content of the Standardized Underwriter’s Narrative and the materials to be included in the Firm Commitment application can be found in this Guide and appendices.

C. The MAP Underwriter is responsible for the review and reconciliation of the third-party reports and the results of the mortgage credit review and other due diligence.

D. Lender Due Diligence Certification: With each Firm Commitment package, the Lender must submit a letter signed by the MAP approved Underwriter which certifies that:

The Lender has reviewed all in-house and third-party forms/reports/reviews.
The preparer of the forms/reports/reviews is qualified as required by this Guide and has all required insurance coverage(s).
The forms/reports/reviews were prepared in the manner required by the Guide and are complete and accurate.
The Lender has identified all staff and third-party contractors who contributed to the underwriting presentation and their role.