H. Organizational Fees:

1. The amount included in the replacement cost estimate for organizational fees is an allowance to reimburse the Borrower for costs incurred to:

Initiate a project;

• Organize the Borrower entity;

• Organize its planning, financing, and construction;

• Control and manage construction by a hired third party, through endorsement; and

• Third Party costs (Appraiser, Environmentalist etc.)

2. Release based upon the following:

   • Organizational costs described above in Appendix 12, Section A.12.1.3.H.1.a through Appendix 12, Section A.12.1.3.H.1.d are disbursed 65% at initial closing and 35% at final endorsement.

   • Third Party costs described above in Appendix 12, Section A.12.1.3.H.1.e are disbursed 100% at initial closing.

3. This allowance may not be used to subordinate the cash requirements for closing.

4. At cost certification allow only the amount included in Section G of form HUD-92264 for organizational fees, unless fully supporting documentation is submitted by the Borrower that justifies

MAP Guide, March 2021 Go to beginning of Appendix 12

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Appendix 12 Page A12-4

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Appendix 12 Construction Period A.12.1 Approval of Advances

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the need for and reasonableness of the additional expenditure. Any costs incurred in excess of this allowance are not eligible for recognition in processing a mortgage increase or the equity computation on form HUD-2580, Maximum Insurable Mortgage.

I. Audit Fees. Audit fees associated with obtaining an accountant’s opinion of the Borrower’s cost certification may not be advanced until final endorsement.