18.3.14 Commitment, Regulatory Agreement and Closing

A. Commitment . The commitment should be in letter form listing the: a) insured mortgage amount, b) the Section of the Act with any appropriate further reference, e.g., Section 221(d)(4) pursuant to Section 223(a)(7) or Section 207/223(f) pursuant to Section 223(a)(7), c) loan terms and requirements, d) any required repairs, e) the requirement for executing a new Regulatory Agreement, f) the requirement that the owner notify the Office of Asset Management & Portfolio Oversight (OAMPO) when any repairs deferred until after endorsement are underway and/or completed, and g) any Special Conditions.

B. The commitment is valid for a period of 90 days. It is not anticipated that extensions will be necessary in a Section 223(a)(7) refinancing. However, the Regional Director may extend Section 223(a)(7) commitments for a maximum of three additional 30-day periods, provided that processing and underwriting conclusions are updated as necessary, so they are current at the time of any extension.

C. The commitment must require that the existing Reserve for Replacements be transferred in total to the new mortgage and specify the dollar amount of funds to be transferred and the amount of additional replacement deposits. To the extent that the CNA requires an initial deposit to the reserve for replacement account that is less than the current balance of the existing reserve account, then any immediate repairs required by the CNA may be paid from funds in the existing reserve account. (See Chapter 8 for additional guidance).

D. Closing . Loans shall be closed in accordance with Chapter 19, Closing Guide.