5.11.2 Supplemental Loan for Existing Structures

A. Section 241(a) applications involving substantial rehabilitation as defined in Section 5.1.2 are required to meet the following:

1. For the buildings and other structures undergoing substantial rehabilitation at the property, the requirements in Section 5.3.2 apply regarding required professional services, documentation, and oversight.

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Chapter 5 Architectural and Construction Analysis 5.12 Cost Estimating for Lenders

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2. Processing requirements for substantial rehabilitation as described in Section 5.7, Section 5.8, and Section 5.9 apply.

3. When certain existing buildings and improvements are not included in the substantial rehabilitation scope of work, a CNA for those existing structures is required. Any identified deficiencies and immediate repair needs must be included in the plans and specs produced by the Project Architect for the substantial rehabilitation work.

4. The structures to be built or substantially rehabilitated are included in the CNA based only on future needs planning, derived from plans and specs.

5. The Section 241(a) loan combined with the original first mortgage shall be considered one project and the CNA must produce one Reserve for Replacement (RfR) schedule and budget inclusive of the existing improvements, as well as the proposed improvements.

• B. Section 241(a) applications involving repairs and alterations require the following:

1. Section 241(a) applications with a scope of work less than substantial rehabilitation must follow the requirements described in Section 5.3.3 and the following:

   • The CNA should identify and categorize repair needs in the same manner as Section 223(f) applications.

• The identified repairs must be remedied in the proposed scope of work in the Section 241(a) application and the cost of such repairs may be included in the Section 241(a) loan amount.

• 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 inclusive of the existing improvements as well as the proposed improvements.

• Processing requirements for Section 223(f) as described in Section 5.10 apply.