2.1 Introduction

A. The MAP program requires that Lenders and Underwriters be skilled in underwriting multifamily housing loans and in preparing applications for FHA multifamily mortgage insurance. To ensure that goal is met, MAP Lenders and MAP Underwriters must be approved by the Counterparty Oversight Branch (“COB”) within the Multifamily Asset and Counterparty Oversight Division (MACOD).

B. Approval of a MAP Lender or Underwriter by COB is on a nationwide basis and the MAP Lender and its approved Underwriter may process MAP loans regardless of which HUD area office will review the MAP application. MAP approval does not expire, but by accepting the opportunity to participate in the MAP program, the MAP Lender and Underwriter agree that their MAP loans will be subject to postendorsement review by COB and that, if they fail to meet HUD standards for underwriting loans, their MAP designation may be terminated in accordance with the Quality Assurance and Enforcement Actions in Chapter 15.

C. Approval by COB as a MAP Lender is a prerequisite to participation in the MAP program, but MAP approval does not obviate the need to have an experienced team process each application. The MAP Lender is responsible for ensuring that all third party contractors meet the requirements outlined in the MAP Guide, including the USPAP appraiser competency provision and jurisdictional certification requirements, and that third party contractors do not have any Identity of Interest with the Borrower/Sponsor or any affiliated entity. If the HUD office has concerns regarding the MAP Lender’s, its Underwriter’s or its third-party contractor’s past performance or capabilities, the office should consult with COB for additional monitoring or for a potential enforcement action.

D. As a condition of approval of any new MAP Lender, the Lender’s first three loan transactions will be subject to the processing restrictions described at D.1-4, below. Further, COB will review the first three loan transactions after Firm Commitments have been issued, although the transactions may continue to be processed for Initial Endorsement during COB’s review. Section 223(a)(7) refinancing transactions may only be credited towards one of the three loan transactions that must be reviewed by COB. Based on the results of its review of the first three transactions, COB may extend the review process and the processing restrictions described at D.1-4, below, to additional applications for all MAP programs, to additional applications just for specific programs or it may release any application processing restrictions. A new MAP Lender may not submit additional applications for insurance until COB has completed its first three loan transaction reviews. For its first three MAP applications, and such additional applications as COB may require, the following limitations on the new Lender’s MAP privileges will apply:

1. For all MAP lending programs:

   • A Concept Meeting will be required for all new applications.

• The Lender’s ability to process MAP loans over a certain amount or for properties over a certain number of units may be restricted, with the specific loan and unit limits determined by COB based on a review of the Lender’s application.

MAP Guide, March 2021 Go to beginning of Chapter 2

Bookmarked Version Go to Acronym and Abbreviation List, Glossary, Index

Chapter 2 Page 2-1

To return to this page after clicking a link, press ALT + Back Arrow

Chapter 2 Lender Qualifications and Practices 2.2 HUD Approval of Lenders

Go to Table of Contents

• A HUD appraiser must review and approve the full appraisals (and market studies, as applicable) for any new applications.

2. For the 223(f) and 223(a)(7) programs:

   • The Lender may not manage critical and non-critical repair escrow releases without a site inspection and approval of escrow disbursements by HUD staff.

• The Lender may not process 223(f) or 223(a)(7) loans which require greater than Level 1 repairs and/or alterations.

HUD staff must inspect a property if a CNA is found to be deficient.

The Lender must report quarterly on its administration of a non-critical repair escrow.

3. For the 221(d)(4) and 220 programs:

   • Two-step processing will be required for all new construction and substantial rehabilitation applications and direct-to-Firm applications may not be submitted.

   • The Lender may be required to submit full schematics and working drawings during preapplication processing based on the results of HUD’s review during the concept meeting.

4. For the Low-Income Housing Tax Credit program:

   • The Lender may not participate in expedited processing of tax credit applications but must submit to standard application processing for both 223(f) and 221(d)(4) loans.

E. An originating MAP Lender may sell or transfer a MAP application only upon receipt of a Firm Commitment. The application and Firm Commitment may be sold only to another MAP Lender in good standing and not currently subject to any Probation or Suspension sanctions, and within the limits on MAP Lenders with Identities of Interest with the Borrower (or affiliates of both). For further guidance on the sale of a Firm Commitment by a MAP Lender, see Chapter 1, Section 1.2 of this Guide.