2.6.4.3 Bridge Loans and Balance Sheet Loans

A. An IOI is created in cases where a temporary bridge loan is made by the MAP Lender to the Borrower, as well as in cases where a loan on the MAP Lender’s balance sheet will be refinanced using an FHA insured loan. Existing or potential bridge or balance sheet loans require disclosure of IOIs at the earlier of the Concept Meeting or at submission of the loan application. Generally, such IOIs will be approved if HUD determines, based on the facts and circumstances submitted in writing by the MAP Lender, that the relationship does not:

1. Undermine the integrity and independence of the Lender’s underwriting;

2. Circumvent program requirements; or

3. Undermine program intent (for example by facilitating cash out on either a Section 223(a)(7) or a Section 223(f) loan greater than 80% LTV).