3.6.4 CNAs, Plans and Cost Estimates

A. A CNA is required for the entire property, including both existing units and any proposed addition. The portion of the property already existing and not proposed for substantial rehabilitation should be evaluated in the same manner as for existing buildings in a refinance application to identify and define any existing critical or non-critical repair needs as well as future needs. These identified critical and noncritical repairs should be included in the loan amount and the approved construction scope of work. Such repairs should be documented with plans and specifications consistent with the applicable classification of work as described in Chapter 5. (See Chapter 5, Section 5.11 for architectural review of Section 241(a) loans.)

B. If the proposed construction includes substantial rehabilitation of the existing property or a portion thereof, then for that portion of the property, the CNA will only identify future needs.

C. Similarly, for any portion of the property that is an addition, the CNA will only identify future needs. Future needs for any substantial rehabilitation portion of the property and additions are based on proposed drawings and specifications, while future needs for other portions of the property are based on inspected conditions. The cost of all future capital needs is used to size the RfR escrow.

D. Plans, Specifications, and Architecture and Cost Analysis reports for portions of the property that are substantial rehabilitation or additions must be completed consistent with requirements for Section 221(d)(4) or other new construction or substantial rehabilitation loan programs as described in Chapter 5, Section 5.11.

E. The Section 241(a) loan combined with the original first mortgage shall be considered one project and the CNA must produce one RfR schedule and budget for future capital needs inclusive of the existing improvements as well as any proposed substantial rehabilitation or addition.