13.10.1 Simplified Form of Cost Certification

A. Simplified cost certification is permitted for new construction or substantial rehabilitation projects involving 40 units or less and for refinancing or purchase of existing properties under 207/223(f).

1. Use forms HUD-92330 and HUD-92330A (if a cost-plus construction contract was used or an identity of interest exists between the Borrower and the General Contractor). An accountant's opinion is not needed.

2. If there is an identity of interest between a subcontractor, material supplier, equipment lessor, or manufacturer of industrialized housing and the Borrower and/or General Contractor must cost certify, and the total of all identity of interest subcontracts, purchases and leases is more than 0.5% of the mortgage, the identified party uses form HUD-92330A. This requirement, established by the form HUD-93305M, Agreement and Certification, applies in all cases.

3. An unaudited balance sheet of the Borrower entity, as of the cut-off date, is required in all cases. Format and content of the balance sheet must follow Section 13.10.2.A.4 below.

4. An unaudited operating statement is required if occupancy occurred during construction. Format and content of the operating statement must follow Section 13.10.2.A.5 below.