19.3.5.1 Introduction

A. When problems occur during construction necessitating a workout or restructuring of a Project, an interim closing may be necessary.

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Chapter 19 Closing Guide 19.3 Final Loan Closing Procedures for New Construction and Substantial Rehabilitation

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1. Handbook 4435.1 along with Chapter 12, Construction Period, and its appendices, provide HUD’s administrative guidance for a Project’s construction period. When serious problems arise during construction (see Appendix 12, Section A.12.5), the RC Director and HUD Closing Attorney will work with the Lender to resolve the serious construction problems in a manner that is consistent with HUD policy.

2. Handbook 4435.1, Chapter 12, Section 12.3.5, and Appendix 12, Section A.12.5 prescribe HUD’s policies for managing serious construction problems and initiating workouts during the construction period.