13.14.8 Financing Expenses

A. Financing expense includes the initial service charge, discounts fees, Ginnie Mae commitment authority fees, permanent Lender commitment fees, and other customary fees. Not eligible are financing expenses that are unusual or result from timing or delays, such as extension fees incurred for the Lender’s delivery of a mortgage-backed security.

1. Allow the lesser of:

Amounts paid, or to be paid, in cash.

• Amounts shown on form HUD-92434M, Lender’s Certificate, or Certificate of Lender portion of form HUD-92455M approved by the Regional Center Director before Initial Endorsement (Insurance of Advances) or issuance of Firm Commitment (Insurance Upon Completion).

2. Construction Lender’s initial service charges are usually not more than 2%. Construction and permanent Lenders’ fees in the aggregate cannot exceed 3.5% (5.5% for bond financed projects) for Section 223(f) refinancing transactions and new construction or substantial rehabilitation transactions. The maximum fee for Section 223(a)(7) loans is 2% for loans greater than $2 million, and up to $40,000 for loan amounts less than $2 million. The aggregate amount of origination, financing, and permanent placement fees must include the amount for Lender’s legal fee and is expected to cover the following:

Processing fees.

• All expenses of the Lender’s counsel paid directly from the initial service charge. (Reconcile separate invoices or bills with the cost of the itemized figures.)

• All other charges by the construction Lender.

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Chapter 13 Cost Certification 13.14 Review of Borrower’s Cost Certification

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