13.2.1.2 Establishing Substantial Completion Date

A. The substantial completion date is the date the Architect dates and signs the certification on form HUD92485, Permission to Occupy Project Mortgages (PTO). Upon execution, the Architect certifies that the construction work is sufficiently complete in accordance with the construction contract documents, such that the project may be occupied for the intended use except for acceptable items of delayed construction completion. The HUD Inspector examines the rental units for being occupiable, and, if so, with any exceptions noted, will complete the “FHA Inspection Report” portion on the Form to verify whether construction is substantially complete and the project is suitable for occupancy. The Form is subsequently signed by HUD’s Authorized Agent granting approval of the PTO. Refer to Chapter 12, Section 12.6.1 for the full guidance on the issuance of a certificate of substantial completion. The Regional Center or Satellite Office will notify the Borrower, General Contractor, and Lender in writing of the substantial completion date so that preparation for final closing can begin.

B. To account for multiple buildings constructed under one insured mortgage, the Architect will approve a series of Permissions to Occupy as buildings are complete and units become available. When all buildings are complete the Architect will write on the front of form HUD-92485 indicating it is the final PTO.

C. The date on the final form HUD-95379, HUD Representative’s Trip Report is used in the absence of a cost certification cut-off date. Production staff will enter “The Date of Visit” from the final form HUD95379 as the cost cut-off date in the HUD data system, e.g., DAP (Development Application Process), and advise the Borrower of the date by letter. The day after becomes the “Financial Assessment Subsystem (FASS) date” to mark the beginning of project operations and annual financial statement (AFS) reporting.

D. Production staff will issue a letter to all parties (Owner, Lender, RC Director (or their delegate for closing activities), Asset Management, etc.) that HUD has established the cut-off date as: “02/26/20XX and the Financial Assessment Subsystem (FASS) date as 02/27/20XX”.

E. For financial reporting purposes, the day after the cut-off date is the commencement of operations and the projects’ first year of reporting annual audited financial statements. This first year will cover the period from the day after the cut-off date to the project’s fiscal year end. Once the certificate(s) of occupancy (form HUD-92485) is issued, this becomes the date Asset Management will begin monitoring the project’s financial condition (e.g., monthly financial accounting reports).

MAP Guide, March 2021 Go to beginning of Chapter 13

Bookmarked Version Go to Acronym and Abbreviation List, Glossary, Index

Chapter 13 Page 13-2

To return to this page after clicking a link, press ALT + Back Arrow

Chapter 13 Cost Certification 13.2 Projects Exempt from Cost Certification

Go to Table of Contents