19.4.1.6 Changes to Form Documents and Deviations from Closing Guide

A. HUD strongly discourages substantive changes to HUD forms and deviations from this Chapter. Substantive change requests will likely result in a longer closing package review time and may impact Tentative Closing Dates. Further, HUD’s approval of any request should not be presumed.

1. Substantive Changes Requiring Project Specific Approval by HUD . For purposes of this Chapter, a substantive revision to a HUD form means any modification to the provisions of an OMB-approved form that is not a matter of form completion (see Section 19.4.1.2, supra). Substantive form revisions and any deviations from procedures of this Chapter require HUD’s written approval on a case-by-case basis, except for substantive form revisions expressly provided for in this Chapter or elsewhere in this Guide (e.g . , modifications to the Security Instrument to accommodate a 241(a) supplemental loan closing; HUD-approved templates required by state or local law for the Subordination Agreement – Public). For brevity, this Chapter refers to these substantive form revisions and deviations from this Chapter for which Project-specific HUD approval is required as “substantive changes.” Lender and Lender’s Counsel must request HUD’s approval for any substantive change through the procedures set forth herein.

2. Narrative Submission to HUD Closing Attorney. For all substantive change requests, Lender must submit a written justification supporting the request to the RC Director, and the HUD Closing Attorney, if a HUD Closing Attorney has been assigned for the Project. The Lender’s justification must include either (a) an explanation of how the substantive change(s) are necessary to comply with state or local law, or (b) a transaction-specific justification for the request, whichever is applicable. The Lender’s request should be submitted with the Firm Application whenever possible. Lender and Lender’s Counsel should not directly contact HQ OGC or MHP regarding any submitted request except in coordination with the RC Director and the HUD Closing Attorney. Lender and Lender’s Counsel are also responsible for providing any additional information and supporting documentation requested by HUD. Lender is responsible for identifying any related conflicts with other program directives and ensuring that a directives waiver request is properly submitted to the appropriate HUD program office.

3. Substantive Changes Related to Separate Housing Directive Waivers . Often, a substantive change is necessary to effectuate a Lender’s requested waiver of a program directive (e.g . , a programmatic requirement found in other chapters of this MAP Guide). In such cases, Lender’s request to waive the program directive must include written identification of the substantive change(s) necessary to effectuate the requested program directive waiver. Lender’s Counsel is responsible for submitting the Lender’s written request to the HUD Closing Attorney or OGC Point of Contact, as applicable. The RC Director will not approve a Lender’s request to waive a housing directive until and unless the related substantive change(s) is approved by HUD in accordance with this Section 19.4.1.

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Chapter 19 Closing Guide 19.4 Document and Diligence Requirements

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4. Approval Authority. The RC Director, in consultation with Regional Counsel, may approve requests for substantive changes that are necessary to comply with state and local law, provided that there is no statutory or regulatory conflict. Any change to an OMB-approved form associated with a state or local law request must be narrowly tailored to address the state or local law provision at issue. Lender’s Counsel is responsible for providing the HUD Closing Attorney with legal citations and documentation to support any such request. All other substantive changes require a multi-tiered HUD review, detailed below at Section 19.4.1.7.