5.6.2 — HUD Multifamily Accelerated Processing (MAP)

A. New LIHTC 223(f) transactions have a largely, if not fully, developed scope of work for repairs and alterations early in the development. Accordingly, a separate CNA should not be needed to evaluate

13 “Permit ready” means approved by the Building Code Official with jurisdiction, subject only to the payment of required permit fees and charges.

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Chapter 5 Architectural and Construction Analysis 5.6 Streamlined Processing

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property conditions or to define the scope of work for repairs and alterations and HUD will waive the required use of Needs Assessors and the CNA e-Tool to describe Critical and Non-Critical Repairs. Applicants for Section 223(f) insured loans with new tax credits should follow the following construction documentation procedures:

The construction scope of work should be defined by the Project Architect in a full set of construction drawings and specifications as prescribed for substantial rehabilitation, provided that the Architect’s Agreement will be the AIA B104 and the Architect’s Certificate shall be in the form of Appendix 5, Section A.5.8.2.
A General Contractor should be engaged and should estimate costs using form HUD-2328. The general contract should be the AIA A104.
The Project Architect should provide to HUD a written summary documenting the inspection procedure employed at the property and identifying conditions or systems determined to require correction, repair, replacement, or improvement, similar to what is described in Section 5.9.2.A.2 for Joint Inspection Report.

This written summary is in lieu of a Needs Assessor inspecting and reporting on the property.

The report should specifically identify any conditions that fail to meet the applicable accessibility requirements at the property for persons with disabilities under relevant statutes: Section 504 of the Rehabilitation Act, the design and construction requirements of the Fair Housing Act, and the Americans with Disabilities Act both Title II and Title III.
A comparable document prepared for the application for tax credits or for the tax credit investor may be acceptable.

The CNA e-Tool should only describe future repairs and replacements for purposes of establishing the appropriate Reserve for Replacement (RfR) Schedule, including any initial deposit to the RfR and annual deposits to the RfR Escrow. The characterization of future needs should be based on project conditions, assuming completion of all work described in the Architect’s plans and specifications.
The Lender must employ a Cost Analyst to review the plans and specifications and the General Contractor’s cost estimates (and likely also to prepare the CNA e-Tool for future needs). The cost review should be completed using the same methods, procedures, and forms as applicable to substantial rehabilitation applications, including form HUD-92326 and form HUD-92331-B.
When reviewing costs of repairs and alterations, the Lender should ensure that the sum of hard costs, the General Contractor’s soft costs and the Project Architect’s supervision fee, and any contingency or assurance of completion, do not exceed the cost threshold for substantial rehabilitation. Any contingency or assurance of completion amounts must be included into the Aggregate Cost calculation per Section 5.1.2.[14]
All other construction documents should be submitted separately, consistent with procedures for substantial rehabilitation.

14 This restraint should be imposed at the time of application for Firm Commitment because LIHTC investors customarily require that contingencies or assurance of completion funds are fully used, first for necessary change orders, and then for betterment change orders. There is no expectation that funds will be returned to the Borrower.