13.1 Projects that Must Certify

A. Cost certification is required for all insured multifamily projects, except when the mortgage is 80 percent or less of value and at least one of the following two criteria applies: 1) the transaction involves tax credits, or 2) the project is refinancing under Section 207/223(f).

B. The purpose of certification is to establish the Borrower's actual costs, including contractor's cost, and establish the "maximum insurable mortgage" for Final Endorsement of the insured mortgage.

C. Certifiable costs are those costs that have been paid in cash or will be paid in cash within 45 days of final closing, except for:

1. Land Value, which HUD will calculate;

2. General Overhead, which is certifiable whether or not it is paid in cash;

3. Builder’s and Sponsor’s Profit and Risk Allowance (BSPRA), which is cost certifiable whether or not it is paid in cash, where there is an identity of interest between the Borrower and contractor; and

4. Non-profit Developer's Fee, which is cost certifiable whether or not it is paid in cash, less amounts certified to and allowed on other line items.