17.4 Application Processing

A. Applications. Applications for Cooperatives are processed in accordance with the current Section 223(f) instructions except as modified here.

B. Exhibits. All exhibits normally required for a Section 223(f) application must be submitted with the following modifications and additions.

1. Rent Roll . The Rent Roll should be modified to indicate each shareholder’s name, unit location, mailing address, whether or not the unit is owner occupied, whether or not the unit is subsidized, date of occupancy, ownership percentage, amount of monthly maintenance charge, any special assessments and past due balances of 30 days or more. For any units subject to local rent control, the actual rent must be substituted for the carrying charge amount. The Rent Roll should be submitted as an Excel spreadsheet.

2. Cooperative Membership Exhibit . Subsequent to issuance of the commitment and prior to closing, the lender must submit a statement of the cost to the borrower and the Cooperative Membership Exhibit, Form HUD-93203. The number of members must equal the percentage (or number) of the total number of units as specified in the commitment.

3. Original Project Prospectus (if available). The prospectus is prepared at the time of the original public filing and contains a great deal of useful information for technical discipline processing by HUD as well as the underwriter and preparers of third-party reports.

4. Financial Statements for the Past Three Years . Follow the current instructions contained in Chapter 7, Section 7.8.2 and Chapter 8, Section 8.4. The lender should review and evaluate any qualifications contained in the reviews to ensure the financial statements reliably represent the property’s operating history and the assumptions relied on in the underwriting and should pay

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Chapter 17 Section 207: Refinancing Cooperative Housing Projects

17.5 Technical Processing

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particular attention to the history of total past due balances of carrying charges and special assessments. The total amount of the unpaid balance (30 days or more) for maintenance charges and special assessments as shown in the rent roll must not exceed 5% of the gross annual income.

5. Environmental Exhibits.

   • Environmental Report . Lenders must submit an environmental report to HUD using the HUD Environmental Review Online System (HEROS), as described in Chapter 9. The environmental report must include and appropriately cite supporting documentation.

   • Contamination Analyses . The environmental report must include a Phase I Environmental Site Assessment (ESA), if necessary a Phase II ESA, and, if further necessary, a remediation plan with approval by the appropriate regulatory authority. See Chapter 9.

6. Additional Third-Party Reports . HUD may require additional specialized reports to ascertain the safety and soundness of the property and its amenities as to their suitability as collateral for longterm financing.

7. Organizational Documents and Minutes . The Regional/Satellite office will identify the required documents set forth in Handbook 4550.3. The following additional exhibits are required:

   • Certificate of Incorporation FHA Form No. 3234-B.

• Resolution of Board of Directors to Mortgage Cooperative.

• Shareholders authorization to Mortgage Cooperative.

• Resolution of Board of Directors adopting FHA Form No. 3245, "Model Form of By-laws."

• Shareholders authorizing adoption of FHA Form No. 3245, "Model Form of By-laws."

  • Minutes of the last six Board of Directors meetings.

• Resolution of Board of Directors adopting FHA Form No. 3237, "Model Form of Occupancy Agreement."

• Resolution of Board of Directors adopting FHA Form No. 3237-A, "Model Form of Sublease." The Member cannot assign the Occupancy Agreement nor sublet the Dwelling Unit to any person without the prior written consent of the Cooperative on a form approved by HUD. Organizational documents must conform to HUD as well as any State or local required provisions.