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13.21 Increase in Mortgage Amount

HUD Multifamily Accelerated Processing (MAP) Guide, HUD Handbook 4430.G (2020 ed., rev. Mar. 19, 2021) · 2026 edition · updated 2026-10-05 · United States

A. Requests for a mortgage increase will not be considered until the project is complete, cost certification has been submitted, the Final Endorsement will likely be achieved immediately following processing of the mortgage increase, and the conditions in Section 13.21.B below are met.

  • B. Following are the bases for considering a mortgage increase:

  1. Necessary changes that arise from differing site conditions (as defined in the construction contract).

  2. Compliance with local codes.

  3. Unforeseen conditions that might affect the safety and health of occupants.

  4. Betterment changes that are economically justified as determined by HUD (e.g., those that can be documented to produce significant cost savings to project operation, increase income expectancy, or enhance the security of the mortgage.)

  5. Costs caused by extensions in construction time, when such extensions are approved by HUD, justifiable under AIA General Conditions, and caused by problems beyond the contractor’s control.

  6. Other costs not known at Firm Commitment resulting from requirements of local authorities and beyond the Borrower’s control.

  7. Construction hard cost increases caused by a natural disaster declared by Federal or State government, to the extent not covered by casualty insurance.

  8. Increased costs resulting from concealed subsurface site conditions, provided it is determined those exploratory tests during project design were sufficient and thorough and neither the Architect nor engineer was at fault.

  9. Costs of substituting a General Contractor when the original General Contractor is terminated for cause and the surety has failed to perform.

  10. Costs to correct a substantial HUD error in the original processing that would otherwise result in serious inequities.

C. Any mortgage increase for an insured project must be in an amount greater than 2.5% of the original mortgage or $400,000.

D. Increases to the HUD insured mortgage at Final Endorsement for affordable projects may be considered on a case-by-case basis, as long as the increase is necessary, justified, and HUD’s risk is not materially increased. As evidence of the mortgage increase, HUD will accept the Lender-prepared form HUD-92580, Maximum Insured Mortgage, along with the final sources and uses, and Forms HUD 92264 and 92264-A. The mortgage increase must be requested by the Lender and reviewed and approved by the Lender, Borrower, Borrower’s CPA, tax credit investor, and GNMA investor.

MAP Guide, March 2021 Go to beginning of Chapter 13

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Chapter 13 Page 13-36

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Chapter 13 Cost Certification 13.22 Restrictions on Mortgage Increases

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▸Contents — HUD Multifamily Accelerated Processing (MAP) Guide, HUD Handbook 4430.G (2020 ed., rev. Mar. 19, 2021)
HUD Multifamily Accelerated Processing (MAP) Guide, HUD Handbook 4430.G (2020 ed., rev. Mar. 19, 2021)

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