7.5.2 Effective Date

A. The effective date of completion of the market study for purposes of a pre-application submission must be within 120 days prior to the submission of the pre-application package. The date for submission of the market study for a firm commitment application must be within 180 days prior to the issuance of the Firm Commitment. The date of the market study can be the date of the site inspection or the date the analyst completes his/her research on active and proposed competitive properties (the effective date), but not to exceed 30 days from the date of the site inspection in either case (these dates should be noted by the analyst in the market study). The effective date is defined as the date that the opinion applies and may or may not be the same as the date of inspection. Expired reports must be updated as necessary by analyzing all relevant data. In cases where a Firm Commitment is delayed and the market has remained stable, HUD may, at its discretion, consider waivers to allow the Lender’s Market Analyst to resurvey the data and provide an update letter referencing any changes or impact to the conclusion contained in the report.

B. Assuming a two-stage application process, the Lender must either submit an updated market study or a Limited Scope Update to the original market study with the submission of the firm commitment application. A Limited Scope Update report requires revisiting the demographic and competitive

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Chapter 7 Valuation & Market Analysis 7.5 Content and Format of the Market Study

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environment (including supply), a recalculation of Net Demand and Effective Demand, and a discussion of subject property’s proposed rents in the current competitive environment. It should also include any material changes in the primary market area including unemployment rates, adjustments to the labor force, and any large layoffs or employment losses that may have occurred since the original market study. It does not require updating all contextual information included in the original market study and can typically be conducted as a desktop analysis.