1. Getting Your HUD Deal Closed (On Time!)
Moderator:
Mary Walsh, HUD
Panelists:
Christie Newhouse, HUD
Michelle Snedden, Shackelford, Bowen,
McKinley & Norton LLP
Brian Surratt, HUD
Leslie Winston, HUD
Dan Worrall, CohnReznick LLP

2. Hand-off to Asset Management
Production Process
Concept meetings scheduled within 10 business days of your request for a meeting
Close within 60 days
Concept Meeting
Application Stage
Initial Closing
Construction
Final Closing
Hand-off to Asset Management
Pre-Application:
Optional for market rate 221(d)(4)s. Not required for 223(f)s or 223(a)(7)s
Firm App Review:
30 – 60 days depending on SOA
Close within
30-90 days

3. Sections 220, 221(d)(4), 231 and 241(a) Chapter 3.2 MAP Guide
HUD can insure both the construction and permanent loan periods (Insurance of Advances) or just the permanent loan period (Insurance Upon Completion).
Davis-Bacon wage requirements apply to new construction and substantial rehabilitation transactions for both Insurance of Advances and Insurance Upon Completion.
New Construction transactions finance improvements where no construction work has been done to the site prior to Initial Endorsement
Substantial Rehabilitation transactions finance repairs and rehabilitation of existing properties that are or have been previously occupied.
Projects in which construction of above ground improvements was started but not completed or inhabited are not eligible.
*For more information regarding Section 220, please see Chapter 3.4 of the MAP guide; for Section 231, please see Chapter 3.5; for Section 241(a), please see Chapter 3.6

4. Refinancing of Existing Insured Mortgages
Sections of the Act
221(d)(4)
Mortgage Insurance for Rental and Cooperative Housing – New Construction and Substantial Rehabilitation
223(f)
Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Rental Housing
223(a)(7)
Refinancing of Existing Insured Mortgages
Section 207/223(f) insures mortgages for the purchase or refinancing of existing rental housing which may have been financed originally with conventional mortgages or equity.
Properties requiring substantial rehabilitation are not eligible for this program.
HUD requires completion of critical repairs before endorsement of the mortgage, and permits the completion of non-critical repairs after endorsement.
*Chapter 3.7, Chapter 17
Section 223(a)(7) provides for streamlined refinancing of currently insured FHA loans.
ONLY currently FHA insured loans are eligible.
*Risk Share loans are not eligible
*Properties in need of substantial repairs or propose new construction are not eligible.
*Chapter 3.8, Chapter 18
Section 221(d)(4) insures mortgages for the new construction or substantial rehabilitation of rental housing.
Chapter 3.3

5. Closings by the Numbers
Month
FY 2016 Number of Closings
FY Number of Closings
FY 2016 Number of Units
FY Number of Units
FY 2016 Closings in Dollars
FY Closings in Dollars
1st Quarter 68 62
11,654
9,884
$ ,840,300
$ ,807,900
2nd Quarter 48 57
7,826
8,312
$ ,034,600
$ ,511,100
3rd Quarter 56 86
8,282
15,702
$ ,030,312
$1,423,037,600
4th Quarter -
10,344
$ ,557,400
Total
229
205
38,106
38,540
$3,119,462,612
$2,816,356,600

6. Closings by SOA

7. Closings by State

9. Closings by MIP Rate in Texas

10. Closing the Deal – Key Drivers in the Event
Lender
Lender’s Counsel
HUD Closing Attorney
Closing Coordinator

11. http://portal. hud. gov/hudportal/HUD

12. http://portal. hud. gov/hudportal/HUD

13. http://portal. hud. gov/hudportal/HUD

14. http://portal. hud. gov/hudportal/HUD

15. HUD Closing Attorney
Common problems that will delay review and closing
#1 tip – stay in frequent communication with the Closing Coordinator and HUD attorney.
Let us know your desired closing date with an explanation of time constraints.
Respond to our comments in a timely manner.
Packages must be complete
HUD attorneys have 10 business days from the reception of a complete package to finish the legal review. The ten day clock doesn’t start until we receive a complete packet.
Don’t send in packets in piecemeal!

16. Packages must be in hardcopy
Reviewing hardcopy docs is much easier than reviewing electronic documents (Comparing title and survey, tabbing docs, making notations, flipping back and forth through the packet for comparison)
I will accept and use digital docs, but they aren’t necessary. Dropbox works best, then CDs/DVDs, then attachments.
Redline comparison copies of HUD forms help expedite the review.
Required for the Opinion(s) but not other documents.
I find them particularly helpful for the HUD Construction Contract form, which contains multiple optional sections.

17. Title and survey problems
The survey must list all title exceptions and show them on the survey itself. (“Subject to – shown on survey”; “Subject to – blanket”; “Subject to – not plottable”)
If the survey says the property is not subject to an exception, it must be removed as a title exception.
The title pro forma must be based on the survey’s legal description, and all of the loan docs must use the same legal description.
Survey must be dated within 120 days of closing. Give your team lots of lead time to prepare the final survey and ensure the title and survey are consistent.
We follow the title and survey standards from the Closing Guide sec. 3.2.

18. Special requirements for LIHTC and secondary financing
LIHTC Rider for Security Instrument
HUD Riders for Restrictive Covenants
Subordination Agreements for Secondary Financing
These are just examples, check the requirements for your project.
Building permits must be issued prior to closing.
All special conditions must be satisfied.
Get waivers cleared in the application stage or quickly after firm issuance!

19. Project-specific/unique issues still have to satisfy our statutory, regulatory, and program requirements!
In other words, please do your due diligence and explain to us why your request is allowed under the applicable program. Find a justification in the regulations, MAP, or Closing Guide!

20. Hand-off to Asset Management
Production Process
Concept meetings scheduled within 10 business days of your request for a meeting
Close within 60 days
Concept Meeting
Application Stage
Initial Closing
Construction
Final Closing
Hand-off to Asset Management
Pre-Application:
Optional for market rate 221(d)(4)s. Not required for 223(f)s or 223(a)(7)s
Firm App Review:
30 – 60 days depending on SOA
Close within
30-90 days

21. Strive for a Smooth Closing to Easily Cross the Finish Line!