8.3.4 Nonprofit Principals

A. Nonprofit Principal is understood to mean “the Single Asset Entity (SAE) Borrower and its Board of Directors” (BODs). The BODs acting as officers and/or member/directors who do not exercise control over the corporation in another capacity are excluded from filing. However, an Executive Director or other managing officer of the nonprofit corporation are considered Controlling Participants.

B. Nonprofit entities and sponsoring parent organizations that are Principals with control and exercise day-to-day financial or operational control of the SAE must demonstrate financial strength, credit history, experience and capacity Executive officers must provide resumes evidencing experience commensurate with the requirements of the project. Generally, analysis of personal financial information, including credit reports, form HUD-92013-SUPP, and financial statements including verifications of deposit or available liquidity are not required of board members or officers of the nonprofit. Any Officers that exert management control and other executive management including the Executive Director of the nonprofit corporation will provide only the previous participation certification.

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Chapter 8 Mortgage Credit 8.3 Reviewing Principals and Other Parties in Control

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C. Where a nonprofit is not a Principal but proposes a role such as property manager, service provider, or an intermediary with a local community or constituency, the nonprofit must demonstrate experience, management ability and financial capacity to execute the proposed services. For its role as property manager, the non-profit entity must provide the previous participation certification.

D. “Sponsor” is an informal term use for persons or entities who may do one or more of the following: locate and control the site; assemble the development team, provide financial assistance to the project or provide development experience and expertise to the project in ways other than as a paid consultant. The Sponsor is not the SAE though they may also act as a Principal in the ownership entity.