15.7.2 Targeted Enforcement Measures

A. Along with issuance of a Warning Letter, the Director of COB may determine that the MAP Lender’s actions, failures or omissions that were the basis for issuing the Warning Letter have or may increase the risk to the FHA insurance fund. If that determination is made, in addition to issuing a Warning Letter, COB may impose targeted enforcement measures until such time as it determines that the MAP Lender has adopted corrective actions and the targeted measures are no longer required. Although the Lender may continue to participate in all MAP programs, the targeted enforcement measures imposed will suspend or limit certain of the flexibilities and delegated authorities that have otherwise been granted MAP Lenders under the MAP Guide. Many of the measures described below are the same as are imposed on new MAP Lenders during their initial application review period, as described in MAP Guide Chapter 2. The targeted enforcement measure(s) imposed will be in response to the specific MAP program violation that was the basis for the Warning Letter.

B. Targeted enforcement measures that may be imposed by COB in conjunction with issuance of a Warning Letter include the following:

1. For the MAP program in general:

   • Require a Concept Meeting for all new applications.

• Require HUD HQ review and approval of the Lender’s loan applications before a Firm Commitment may be issued.

• Limit the Lender’s ability to process MAP loans over a certain dollar amount or for properties over a certain number of units.

• Require a post-closing review of the Lender’s most recent applications and/or Firm Commitments before any new applications can be submitted.

• Require that HUD technical staff review and approve the appraisal and any market study for all new applications.

2. For the 223(f) and 223 (a)(7) refinancing programs:

   • Suspend the Lender’s authority to manage critical and non-critical repair escrow releases without a site inspection and approval of escrow disbursements by HUD staff.

• Suspend the Lender’s authority to process 223(f) loans that require greater than Level I repair.

• Require that HUD staff inspect a property if a CNA is found to be deficient.

• Require quarterly reporting on the Lender’s administration of a non-critical repair escrow.

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Chapter 15 Oversight of MAP Program Requirements 15.8 MAP Probation

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3. For the 221d(4) and 220 new construction programs:

• Require two-step processing and prohibit direct-to-Firm applications.

  • Submission of full schematics and working drawings may be required during the pre-application process.

4. For the Low-Income Housing Tax Credit pilot:

   • Suspend the Lender from Fast Track processing of tax credit loan applications and require standard application processing.

• Require submission of enhanced documentation to justify the reduced MIP for affordable and broadly affordable housing properties or for green energy improvements.

• Suspend the authority to act as both equity investor/syndicator and MAP Lender on tax credit transactions.