J. Title and Recording.

1. Approve amounts typically incurred for titling and recording, including:

Title search and policy at the time of Initial Endorsement;

• Recording fees at Initial Endorsement;

• Mortgage and stamp taxes;

• Survey recording fees;

• Updating title policy during construction;

Final title policy and recording charges; and

Legal fees incurred with any of the above.

2. Do not fully disburse these funds at Initial Endorsement. Ensure that sufficient funds are maintained in the account to cover title and recording costs required at final endorsement. This may require the approval of an amount less than that requested in the initial draw.

3. Do not disburse funds for title and recording cost associated with acquisition of the land or property.

4. Legal, organizational, title, recording costs, and taxes incurred in connection with the site purchase may be added to the cost of the land in establishing the latest arms’ length purchase price.

K. Developer’s Fee. Developer’s fee is provided in the estimated replacement cost of Sections 220, 221, 231 projects involving non-profit Borrower. A portion of the fee may be used to pay for transactional costs associated with developing the project, including but not limited to:

1. Reduction of the estimated closing costs of the project;

2. Staff salaries;

3. Non-profit working capital deposit;

4. Relocation expenses;

5. Operating deficit escrow;

6. Financing fees over and above the 3.5 percent included in the estimated replacement cost of the project;

7. Environment studies; and

8. Housing Consultant services provided by either in-house staff or contractor.

L. Tap fees, Soil Testing and Other Fees. Approved disbursement of tap fees, soil testing, and other fees must be fully supported and is not to exceed the amount estimated in the General Contractor’s or Borrower’s list of other fees for requested items. Approve disbursement only for items actually due.

MAP Guide, March 2021 Go to beginning of Appendix 12

Bookmarked Version Go to Acronym and Abbreviation List, Glossary, Index

Appendix 12 Page A12-5

To return to this page after clicking a link, press ALT + Back Arrow

Appendix 12 Construction Period A.12.1 Approval of Advances

Go to Table of Contents

M. Contingency Reserve. The contingency reserve is included in the replacement cost of substantial rehabilitation projects.

1. Use the contingency reserve for:

   • Unforeseen costs of necessary changes approved by the HUD Office.

   • Unanticipated soft costs associated with extension of time change orders approved by the HUD Office.

2. Changes classified as betterments by Architectural and Cost staff are ineligible for funding.

N. Third-Party Expenses. Fees to be paid for third-party review costs of the MAP Lender including but not limited to Architectural reviews, Cost reviews, appraisals, and market studies.

• O. At Initial Endorsement, HUD fees for examination and inspection.

• P. Sums allocated to acquisition cost of land or existing building.