2.11 Underwriter Trainees

A. A MAP Lender may train its in-house staff to be new MAP Underwriters for approval either by COB or by the Lender’s Chief Underwriter under the procedures in Section 2.10, above. The Lender must establish a written development plan for Underwriter trainees that includes a combination of commercial/multifamily training courses and on the job experience.

1. The Underwriter trainee must have successfully completed at least 3 underwriting, finance, appraisal or environmental courses that demonstrate basic understanding of multifamily underwriting concepts, one of which must be a multifamily/ commercial appraisal course. These courses may be obtained through the American Bankers Association, Institute of Real Estate Management, National Association of the Review Appraisers & Mortgage Underwriters, the Mortgage Bankers Association of America (MBA), the Appraisal Institute or any other acceptable training institution such as colleges and universities. Suggested courses include Commercial Underwriting , Understand Your Construction

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Borrower , Analyzing Financial Statements , Commercial Real Estate Financing and Valuation , Appraisal: Concepts and Applications, Appraisal Principles , Appraisal Procedures , Basic Income Capitalization, Advanced Income Capitalization, and Uniform Standards of Professional Appraisal Practice (USPAP) .

Education used to meet Underwriter approval requirements must be comprehensive enough to provide substantive background. In-depth specialized technical training provided by recognized training institutions, trade associations or private firms will be considered so long as the content and duration of the class is analogous to a college-level class. One-day seminars or participation in industry conferences are appropriate (and expected) for continuing education, but these are not sufficient to meet the requirement for one of the 3 courses. Lenders or training providers may submit a course syllabus to COB if there is a question as to the sufficiency of a specific course to meet the requirement.

2. In addition to the training courses, HUD requires on-the-job training of a minimum of 3 years continuous work experience in multifamily mortgage lending. The Underwriter trainee must work on a minimum of 3 MAP applications that reach Firm Commitment. Section 223(a)(7) refinancing transactions may only be credited towards one of the three minimum MAP applications. Only one Underwriter trainee may assist the MAP-approved Underwriter in completion of any MAP application, which should document that the trainee was supervised by only one MAP-approved Underwriter mentor.

3. An Underwriter trainee may assist the MAP Underwriter in completion of the underwriting and both the MAP approved Underwriter and the trainee must sign the Narrative Summary and the processing forms.

4. The MAP-approved Underwriter must accept responsibility for all aspects of the loan underwriting as evidenced by the signed Narrative Summary and processing forms.

5. The Underwriter trainee must be a full-time salaried employee of the MAP Lender and may not be hired or retained only for a specific loan application.

6. The Underwriter trainee may not hold a significant equity position in, or be a principal of, the MAP Lender or any of the Lender’s affiliates, although Employee Stock Ownership Plans and similar forms of compensation are permissible.

7. The trainee’s contribution to the underwriting, and the specific tasks performed by the trainee, must be stated in the Narrative Summary.

8. Work completed by an Underwriter trainee must be under the direct supervision of a MAP approved Underwriter and it is unacceptable for the MAP Underwriter to merely sign a form or document prepared by a trainee without providing proper supervision. The mentor Underwriter must add a paragraph in the Underwriter Certification to certify that he/ she has directly supervised the Underwriter trainee in completion of the specific tasks in the Narrative Summary and the processing forms.

9. For new MAP Underwriters who must be approved by COB, a written request for approval of the trainee as a MAP Underwriter should be submitted electronically in PDF format by a senior officer of the MAP Lender with signatory authority to COB and include the following exhibits:

   • A written development plan established for the Underwriter trainee.

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• A resume of the Underwriter trainee that demonstrates the specific qualifications, education and the level of experience outlined above.

• A list of MAP loans processed and underwritten by the trainee that reached Firm Commitment, certified and signed by a senior officer with authorized signatory designation and by the Underwriter trainee. The list must contain the following warning:

“Warning: Federal law provides that anyone who submits (or causes to submit) a document containing any false, fictitious, misleading, or fraudulent statement/certification or entry may be criminally prosecuted and may incur civil administrative liability. Penalties upon conviction can include a fine and imprisonment, as provided pursuant to applicable law, which includes, but is not limited to, 18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802, 24 C.F.R. Parts 25, 28 and 30, and 2 C.F.R. Parts 180 and 2424. The signatory certifies that the information provided herein is true and accurate.”

• An electronic submission of complete documentation of each MAP application on which the Underwriter trainee worked (a hard copy is not required and should not be submitted). The documentation, signed by the trainee and co-signed by the mentor Underwriter, must include:

  • 1. A copy of Narrative Summary that clearly identifies the specific tasks performed by the Underwriter trainee;
  • 2. A copy of completed form HUD-92264-A and other forms and / or exhibits for the type of mortgage proposed that require a mortgage credit analysis (refer to Chapter 8 and Appendix 4);
  • 3. A copy of the Master form HUD-92264; and,
  • 4. An IOI Certification, as required by Section 2.6, signed and dated by the Underwriter trainee only.

10. Underwriter candidates who have successfully completed the MBA’s 6-month FHA Multifamily underwriting course will receive credit toward the experience and education requirements. Completion of that course will:

Fully satisfy the requirement to complete 3 courses;

• Satisfy half of the 3 transactions requirement; and,

Satisfy half of the 3 years of experience requirement.

B. By satisfying half of the MAP Underwriter requirements in #2 and #3, above, the candidate may elect to utilize the course completion to fulfill either two transactions/one year, or one transaction/two years of the requirements. The applicant should submit evidence of completion of the MBA MAP Underwriter course and indicate how they wish to utilize the course completion toward the minimum transaction requirements.