2.5 Underwriting and Construction Administration 2.5.1 Underwriter Responsibilities

A. The MAP Underwriter performs the mortgage credit and real estate underwriting functions and must be a full-time employee of the MAP Lender. The MAP Lender is responsible for underwriting the loan which necessarily requires that the Lender oversee and recommend to HUD for approval the conclusions and recommendations of the third-party reports, except as modified, explained and justified in the

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Chapter 2 Lender Qualifications and Practices 2.5 Underwriting and Construction Administration

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Lender’s underwriting. The Underwriter or the Construction Loan Administrator is responsible for management of the Lender’s responsibilities during the construction period.

• B. The duties and responsibilities associated with MAP application underwriting are as follows:

1. Make a determination of the acceptability of the General Contractor, Supervisory Architect, Management Agent, the Sponsor and the Borrower and its principals through a thorough review of their ownership structure and an analysis of their experience, credit, character, financial condition and motivation for ownership (e.g., are they a merchant builder, plan to hold for long term, refinancing balloon debt, etc.), the availability of assets for closing and the adequacy of property income to meet loan obligations.

2. Use trade references, bank references, credit data and construction experience resume in analyzing the construction capability of the General Contractor, including its financial stability and its ability to complete the project in light of its responsibility for other projects in progress.

3. Identify and analyze all risks associated with the proposed financing and determine the recommended maximum mortgage amount and other key terms of the loan.

4. Engage all third-party consultants and analysts, provide oversight and effective supervision of their work to ensure their deliverables meet MAP Guide requirements and support the underwriting recommendation. The Underwriter must assure that third party contractors do not have any Identity of Interest with the Borrower/Sponsor or any affiliated entity at the time they are providing the services. The Underwriter will oversee the assembly of the loan application and will recommend loan approval to HUD.