12.7.6 Next to Final Advance

A. The Lender may request the next to final advance when construction is acceptably complete, even if there are items of delayed completion.

1. It may provide for the release of the contractor’s holdback provided the conditions in Section 12.15.5 have been met. The amount approved for release will be based on the cost certification review and HUD-approved amount (or where the cost certification is exempt, an operating statement is reviewed instead). The amount approved for release will also consider items of delayed completion. A special condition will be included in the Firm Commitment in the event that the cost certification is exempt, and an operating statement will be reviewed instead.

2. The balance of the off-site escrow may be released upon HUD approval provided:

   • The off-site sewer, water, electrical and gas facilities are completely installed and connected for a period not less than 30 days; and safe and adequate all-weather facilities for ingress and egress are provided.

• All other required off-site construction, if any, is completed.

• There is no event of default on the mortgage or failure to comply with program obligations.

• The mortgagor has provided a latent defects assurance consistent with the requirements of the form HUD 91073M.