A.8.3.2 Lender’s Analysis and Scope of Review

A. The lender must conduct a complete mortgage credit review of active principals and prepare an analysis of the Sponsors’ character, capacity and creditworthiness, including a review of all observed risks and prospective mitigating factors together with a recommendation for credit approval. The review must describe any material changes in the active principals’ financial position expected during the 24 months following the date of the credit submission as well as any additional periods of time required for the stabilization of new developments or troubled assets. An essential element of the review is an assessment of the Sponsors’ ability to meet reasonably anticipated financial and management demands during the period when applications are under consideration and continuing through stabilization. HUD consideration of requests for prior approval does not relieve the lender of the responsibility to submit a properly underwritten MAP application for each project proposed for insured financing, nor does such consideration obligate any Regional Center or Satellite Office to reach a conclusion on the merits of any particular project application other than the creditworthiness of the active principals which already will have been reviewed and approved.

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Appendix 8 Mortgage Credit Requirements A.8.3 Prior Credit Approval

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