A.8.3.6 Authority, Conditions and Duration of Prior Approval

A. The Technical Support Division of the Office of Multifamily Production will review lender requests for prior approval. The Technical Support Division will notify Regional Center Directors of its determination of the principal’s creditworthiness and will specify a date when the prior approval expires. Depending on the applicant’s financial strength and credit history, the Director of Technical Support will approve the request, approve with conditions, or disapprove the request. When appropriate to specific circumstances the Director of Technical Support may condition an approval with conditions including, but not limited to, one or more of the following:

1. A list of particular named projects for which new insurance applications may be submitted,

2. Certain types of projects (e.g., refinance, but not new construction) or to specific markets or particular geography,

3. A maximum amount of new insurance commitments for which the principal may apply,

4. A maximum liquidity amount that may be required by new insurance commitments, or a minimum liquidity amount that the Sponsor must maintain, or

5. Requirements for specific measures or remedies to address identified credit issues.

B. The principal’s continued credit worthiness will be confirmed during processing of each new Firm Commitment application, but normally, and absent material and adverse changes in the principal’s financial condition, the prior approval will be effective and may be relied upon for 24 months or lesser period specified by HUD, from the date of the credit approval.