13.30.1.1 Advance Amortization Requirements

A. “Advance amortization” is the requirement that, to the extent that the project generates net operating income during the Accountability Period (defined in Section 13.30.1.2.A below), HUD may require the Borrower, prior to final endorsement, to make, or to agree to make, a prepayment to principal in the amount of such net operating income, all as discussed more fully in Section 13.30.1.3 below. In order for the Regional Center Director to determine whether or not advance amortization is required, the Borrower must account for all operating income for the period ending three months prior to the originally scheduled date of the first principal payment under the mortgage loan (e.g., through June 30 if the first principal payment is scheduled for October 1).