2.6.4.7 Prohibited Practices - Inducements

A. A MAP Lender may not have arrangements with Borrowers for the purpose of securing the Borrower’s business that may undermine the MAP Lender’s integrity in the underwriting and credit review process or provide an unfair competitive advantage to the MAP Lender. The following are examples of prohibited inducements in which the MAP Lender may not:

1. Provide “kickbacks” such as financial rewards, payments or fee rebates, free or discounted professional services (except for a reduced loan origination fee) or other remuneration to a Borrower;

2. Provide loans or advances of funds to affiliates of either the MAP Lender or the Borrower for the purpose of meeting requirements for cash or financial capacity related to the MAP transaction;

3. Condition the provision of, or provide more desirable terms for, other banking products including tax credit equity investments by affiliated entities in exchange for engagement to process the MAP loan;

4. Pay the Borrower’s costs for third-party reports;

5. Pay application fees; or

6. Offer to refund application fees on unsuccessful loan applications.

B. The preceding list of prohibited inducements is not intended to be exhaustive. Any similar payment made by MAP Lender to the Borrower to secure loan origination business is prohibited. The prohibition on inducements does not prevent a MAP Lender from paying for updated third-party reports provided the transaction was already submitted for a Firm Commitment application that was delayed in processing due to no fault of the Borrower. The Lender must provide to COB and the Director, Office of Multifamily Production a written notice and detailed explanation of any transaction in which such funds are greater than $10,000 .