12.17.7 Projects in Difficulty

A. Physical, financial, or management problems could be an indication that a default is imminent. For further explanation see Management Agent Handbook 4381.5 REV-2 Chapter 6 Exhibit 6-1, and Item 7 of the form HUD-92476.1M, Escrow Agreement for Deferred Repairs.

B. If the Borrower has not completed all deferred repairs by the end of the repair period the HUD Inspector will document all such non-completed repairs on form HUD-95379, HUD Representative’s Trip Report, and will submit the report to the Lender and HUD Construction Manager.

C. The Lender will complete the repairs using the repair escrow funds. The Lender will submit a work schedule to HUD for the completion of all remaining repairs and will provide the Borrower with a breakdown of these repairs and the cost(s) of completion (including administrative expenses).

D. Funds remaining in the repair escrow account after completion of the repair work by Lender will be returned to the Borrower, less reasonable administrative costs incurred by Lender in completing the repairs.