19.6.1.2 Promissory Note (Form HUD-94001M)

A . Endorsement of Note. In a Section 223(f) closing, there is one Initial/Final closing at which HUD endorses the Note for the total sum of the Loan to be disbursed.

B. Endorsement Panel. Note that for a 223(f) project, the total sum of the Loan will be listed on the endorsement panel. Additionally, the correct designation of a Section 223(f) loan is “Insured under Section 207 pursuant to Section 223(f) of the National Housing Act, as amended”.

C. Prepayment Provisions. Loans insured under 223(f) must include Section 9(h), which prohibits prepayment of the Note within five years of endorsement unless approved by HUD, as required by statute. Chapter 3, Section 3.7.10, Prepayment Provisions and Prohibition, also includes conditions under which Housing may override any prepayment prohibitions. Lenders may include their own prepayment provisions, schedules, and limitations in Rider 1 that are consistent with Program Obligations, and must include the following language at its outset: “This Rider 1 is subject to the restrictions and requirements for prepayment set forth in Paragraph 9 of the Note.” See also Chapter 11, Section 11.8.2 and Section 11.8.3.

D. Loan Term. The Loan term is set forth in the Firm Commitment. See also Chapter 3, Section 3.1.6 and Chapter 8, Section 8.9.