14.18 Firm Commitment Additional Conditions

A. The following additional conditions must be added to the Firm Commitment as applicable to applications for mortgage insurance for projects that will have equity funded from Tax Credit proceeds:

1. This Commitment is conditioned on the availability of the tax credit equity contribution described above and in the Equity Contribution Schedule provided with the firm commitment application and approved by HUD, attached as Exhibit G. Changes to equity contribution amounts or the Equity Contribution Schedule require the submission and approval of an updated form HUD-92013-C, LIHTC Summary Report and an amendment to the Firm Commitment.

2. The initial equity investment amount is $_______. The initial equity investment must equal to no less than 20% of total LIHTC equity, of which 10% may be funded with Equity Bridge Loan proceeds.

3. The Lender must submit satisfactory evidence of an agreement that binds the tax credit investors to timely and periodically pay to the Borrower entity the tax credit equity to contribute to Project completion costs, in the aggregate amounts set forth in form HUD-2880, HUD-92013, and the HUD92013-C, LIHTC Summary Report . A Disbursement Agreement that reflects the terms of the Limited

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Partnership Agreement or Operating Agreement for the remaining outlay of tax credit equity contributions must be provided prior to Initial Closing.

4. All Tax Credit Equity documents to which either the Borrower or Controlling Participants are a party, and any related land use restrictions ( i f available), must be approved by HUD prior to the date of Initial Endorsement, and must comply with HUD’s legal and administrative tax credit equity requirements, and all related HUD closing forms.

5. In addition to the standard provisions that must be included in the organizational documents for the Borrower entity, a provision must be added that prohibits any changes to the organizational documents that affect the obligations of the tax credit investor without written consent of the Lender and HUD.

6. Special Limited Partner. [NAME] has been preapproved to serve as the Special Limited Partner to replace the General Partner for a limited period of time. A “Rider to the Security Instrument for LIHTC Properties” must be submitted with the closing documents.

7. Cost Certification Exemption. The Project is exempt from providing Cost Certification pursuant to Program Obligations (see LIHTC Projects, MAP Guide Chapter 13, Section 13.4). In cases such as new construction with partial occupancy approval as described in Chapter 12, Section 12.14.4 or a substantial rehabilitation tax credit project without significant resident displacement, there may be considerable net operating income (NOI) (or interim income) generated during the construction period. This interim income may be used to pay for mortgageable and non-mortgageable items. Therefore, prior to Final Endorsement, the Borrower must prepare and submit an Operating (or Income and Expense) Statement, accounting for Interim Income from the period from first occupancy through the time that HUD issues the Permission to Occupy form, HUD-95485 and after all Change Orders have been funded.

8. Deferred Drawings and Specifications – LIHTC Projects and Certain Eligible Borrowers. As an accommodation to the Borrower, this Commitment has been issued based upon preliminary drawings, instead of the final drawings, specifications and cost estimates (see MAP Guide, Chapter 5, Section 5.6.5). At least 30 days prior to the scheduled date for Initial Endorsement, HUD must receive the final drawings, specifications and the Lender’s architectural/cost review report for review and approval to ensure consistency of design and cost. The plans and a complete specifications manual must be submitted to [Name of Construction Analyst] at [HUD office location] for review and approval. [Name of Construction Analyst ] can be reached at [phone number] . They will provide information on where the three approved sets of Plans and Specifications with signature blocks will need to be mailed for the preconstruction conference and Initial Endorsement. In addition, it is the Lender’s and General Contractor’s responsibility to incorporate the most current Davis-Bacon Wage Rates into the appropriate documents. If there is a net cumulative construction cost change of more than 5%, or a change in design concept, this Commitment shall be subject to and conditioned upon the further approval of HUD, to be evidenced in writing. Based on such change and review, this Commitment may be terminated and voided by HUD, or, additional conditions may be imposed at HUD’s option. Add if applicable: this Commitment is conditioned on the following corrections that must be made to the Plans and Specifications before Initial Endorsement.

9. Bridge Loan (only as applicable). {insert: amount, interest rate, repayment terms, maturity date, financing instrument(s), name of maker on the loan.}

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This Commitment is conditioned on the availability of the Bridge Loan described above. All Bridge Loan documents to which either the Borrower or Controlling Participants are a party must be approved by HUD prior to the date of Initial Endorsement and must comply with HUD’s legal and administrative bridge loan requirements, and all related HUD closing forms. If there is a conflict between the HUD loan documents/Program Obligations (HUD Requirements), the HUD Requirements control.

10. Bonds (only as applicable). This Commitment is conditioned on the availability of the Bonds described above. All Bond documents to which either the Borrower or Controlling Participants are a party must be approved by HUD prior to the date of Initial Endorsement and must comply with HUD’s legal and administrative bond requirements, and all related HUD closing forms. If there is a conflict between the HUD loan documents/Program Obligations (HUD Requirements), the HUD Requirements control.

11. Deferred Developer Fee. Whether the DDF loan is documented in the Borrower’s organizational documents or in a Note, language must be included specifying that repayment is restricted to Surplus Cash or other non-project funds (as that term is defined in the Regulatory Agreement between the Borrower and HUD).

12. {The following additional Tax Credit Equity condition applies to transactions with master lease structures to facilitate Historic or New Market Tax Credits.}

A master lease structure has been approved for this Loan transaction to facilitate [Historic Tax Credits] [New Market Tax Credits]. The Borrower and master tenant [insert name of master tenant] , along with the following (residential and/or commercial) master sub-lessees [insert names of master sub-lessee 1, master sub-lessee 2, etc.] must execute separate Regulatory Agreements with the appropriate HUD Rider attached. The Riders can be found at the following link:

https://portal.hud.gov/hudportal/HUD?src=/program_offices/general_counsel/mffaqs.

{HUD staff must also insert here the required additional conditions for master lease transactions from MAP Guide Chapter 16, Section 16.4.A.}