19.5.7.2 — HUD Multifamily Accelerated Processing (MAP)

A. The HUD Closing Attorney’s role includes, at the RC Director’s request, review of legal documents submitted in connection with requests for approval of insured advances to pay for building components stored off-site.

B. The UCC Financing Statement(s) filed at Initial Endorsement must perfect a first-lien security interest in all existing building components stored offsite until the components are moved onsite and integrated into the building(s) construction. Borrower and Lender are responsible for determining if, and when, additional filings are necessary to maintain a first-lien security interest on components stored offsite, including components acquired after initial endorsement, and for ensuring that such filings are properly filed/and recorded.

C. The Construction Contract (form HUD-92442M) must include the rider entitled “Amendment to the Construction Contract for Components Stored Off-site,” and be entered into at Initial Closing. See Appendix 12, Section A.12.4.

D. The Construction Contract, including the offsites amendment, must be 100% secured by performance and payment bonds.

E. A bill of sale evidencing Borrower’s title to the off-site components and an itemized invoice must be submitted with each request for payment for those components on the Contractor’s Requisition Project Mortgages (form HUD-92448).

F. Lender must provide an unconditional written certification to HUD certifying that the Security Instrument and filed UCC Financing Statement(s) create a first lien on all building components stored offsite. This Lender’s certification must be supported by an opinion from the Lender’s Counsel stating that they have reviewed the Security Instrument, UCC-1 Financing Statements and any associated documents, as necessary, relating to the off-site building components, that such documents create a valid security

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Chapter 19 Closing Guide 19.5 Additional Requirements for Insurance of Advances

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interest in the collateral, and that when the financing statements are duly filed, the secured and additional secured party will have the first lien on the building components.

G. Other HUD requirements for insured advances to pay for building components stored off-site are found in the Appendix 12, Section A.12.2.