A.2.1.1.9 — HUD Multifamily Accelerated Processing (MAP)

A. For MAP origination and underwriting functions:

The QC Plan must address how quality control is integrated into the MAP Lender's loan production process. For example, before sending the Construction Analyst and the appraiser out to perform a review, a pre-performance meeting should be held, which is an important first step to document how the Lender is enforcing QC in the production process. At a minimum, the following functions must be addressed in the QC Plan and the loan file must include documentation supporting any decisions made for these functions.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in determining that the mortgagor is an acceptable credit risk, and with the project’s ability to make payments on the loan obligation.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in determining that the General Contractor, if applicable, is an acceptable credit risk, with a reasonable expectation of completing construction of the project.

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Appendix 2 Quality Control Plans and Identity of Interest A.2.1 Lender Quality Control Plans and Identity of Interest Examples

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The QC Plan must address how the MAP Lender will exercise prudence and due diligence in determining that the property’s estimated value, market demand, income potential, operating expenses and warranted cost of the property will be analyzed to ensure that they are adequate to support a long-term HUD insured mortgage.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in determining that new construction/substantial rehabilitation project’s design meets all applicable design standards and usability by the intended resident population.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in determining that the project’s construction/rehabilitation or repair costs are reasonable.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in assuring that it has not established minimum loan amounts or "floors," below which they will not lend since this is a violation of Section 535 of the National Housing Act.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in determining that it is in compliance with Chapter 2, Section 2.6 of the MAP Guide dealing with prohibited Identity of Interest relationships. Identity of Interest relationships that have been approved by COB must be properly documented in the QC plan, and evidence of the approvals must be provided with the application for the HUD processing office’s review.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in assuring that the Lender’s loan originators cannot:

Perform the role of Underwriter for projects they originate.

Hire contractors on behalf of the Underwriter.

Interact with, or otherwise act to influence, the preparation or conclusions of third-party contractors’ reports (including the Lender’s internal staff tasked with third-party like duties).

Have an Identity of Interest with a third-party contractor, the Borrower or Borrower entity.

The QC Plan shall require that all of the MAP Lender’s loan originators certify for each loan that no conflicts-of-interest exist with the proposed mortgagor or other transaction participants.
The QC Plan must stipulate that all HUD approved MAP Underwriters are full-time employees of the MAP Lender.
The QC Plan must address how the MAP Lender will exercise prudence and due diligence in assuring that the MAP Lender’s technical staff and/or third-party contractor(s) are knowledgeable about HUD’s requirements. Where required by state or local law or regulation, the technical staff or thirdparty contractor must be properly licensed in the jurisdiction where the project is located.

B. For MAP construction loan administration function:

The QC Plan must address how the MAP Lender will exercise prudence and due diligence in determining that construction loan administration is performed in accordance with accepted practices of prudent lending institutions and with HUD’s requirements.
The QC Plan must stipulate that the HUD approved MAP construction loan administrator(s) is a fulltime employee of the MAP Lender.