**MEMORANDUM FOR: Minnesota Multifamily HUB Lenders**

**SUBJECT: HUD-2530\
Circular 03-07**

## DATE: April 16, 2003

Our office has been receiving an increasing number of HUD-2530 Previous
Participation Certifications with either incorrect or omitted
information. Incomplete HUD-2530's delay the processing of applications
since they must be sent back to applicants to make the proper revisions.
The approval of HUD-2530's, whether it originates from our office or
Headquarters, must be obtained prior the issuance of any commitment.

This memorandum is intended to provide additional assistance in avoiding
the common pitfalls of the Previous Participation Certification form.
When submitting a HUD-2530, applicants should closely review the form's
instructions, which provide the information necessary to complete the
Certification form.

In addition, the attached "Supplemental 2530 Checklist" highlights some
of the most error-prone areas of HUD-2530. Please advise all applicants
to review the "Supplemental 2530 Checklist" before submitting
HUD-2530's. This should help ensure the proper completion of the form
and speed the processing of applications.

Questions relating to this circular's application to specific projects
should be directed to either Tim Gruenes at (612) 370-3051 x2252 or Del
Relopez at (612) 370-3051 x2274.

**[Supplemental 2530 Checklist]{.underline}**

## 2530 (page 1)

+----+-----------------------------------------------------------------+
| \_ | **Has a separate 2530 been completed and signed by all          |
| \_ | principal participants (e.g. the [Mortgager                     |
| \_ | Entity]{.underline}, the [Management Agent]{.underline}, and    |
|    | the [General Contractor)]{.underline}, including their          |
|    | affiliates, in the proposed project?\                           |
|    | ***HUD-2530 must be completed and signed by all parties         |
|    | applying to become principal participants, including their      |
|    | affiliates and those who have no previous participation, in HUD |
|    | multifamily projects. Page 1 of the HUD-2530 instructions       |
|    | discusses the entities / individuals that are considered        |
|    | principal participants in projects, and who should be included  |
|    | on the 2530 form.*                                              |
+----+-----------------------------------------------------------------+
| \_ | **Has the most recent edition of the 2530 form been used?\      |
| \_ | ***The most recent version is in "landscape" format, dated      |
| \_ | 05/2001.*                                                       |
+----+-----------------------------------------------------------------+
| \_ | **Has the "Proposed Principal Participants" section been filled |
| \_ | out completely, including:\                                     |
| \_ | **                                                              |
|    |                                                                 |
|    | \_\_ Names and addresses of all principals and affiliates.\     |
|    | \_\_ The social security number of all principals and           |
|    | affiliates.\                                                    |
|    | \_\_ On the Mortgagor's 2530, all expected ownership interests  |
|    | must be listed, *including their percentage ownership in the    |
|    | project*. The first entry should always be the actual Mortgagor |
|    | (entity that will be first on the note) and the total ownership |
|    | percentage should add up to 100%.                               |
+----+-----------------------------------------------------------------+
| \_ | **Has each entity / individual signed and dated the front       |
| \_ | page?**                                                         |
| \_ |                                                                 |
|    | *If the 2530 was submitted for a corporation and everyone has   |
|    | the same participation history then one individual can sign for |
|    | everyone.*                                                      |
+----+-----------------------------------------------------------------+

**2530, Schedule A (page 2)**

  -------- -----------------------------------------------------------------
  \_\_\_   **Has a separate Schedule A been completed by [each entity /
           individual]{.underline}?**

  \_\_\_   **Does Schedule A state [No Previous Participation, First
           Experience]{.underline} next to the stated name if the entity /
           individual has not been involved in HUD/USDA-FmHA, State and
           Local Housing Finance Agency programs?**
  -------- -----------------------------------------------------------------

**[Supplemental 2530 Checklist, continued]{.underline}**

**2530, Schedule A (page 2)[\
]{.underline}**

  -------- -----------------------------------------------------------------
  \_\_\_   **Has the entity / individual listed [every project]{.underline}
           that has involved HUD/USDA-FmHA, State and Local Housing Finance
           Agency programs?**

  \_\_\_   **Have Management Ratings and Physical Inspection Ratings been
           provided for every HUD insured property?**\
           *Not all properties will have recent Management Reviews, however,
           each HUD project should have a REAC Physical Inspection each
           year - REAC ratings are 1 to 100 (number rating should be
           listed).*
  -------- -----------------------------------------------------------------

Additional materials to be attached to 2530

+----+-----------------------------------------------------------------+
| \_ | **Has verification of the participant's Social Security Number  |
| \_ | been included with the 2530?**\                                 |
| \_ | *Verification of a Social Security number can include a         |
|    | photocopy of a Social Security card, a previous tax return,     |
|    | etc.*                                                           |
+----+-----------------------------------------------------------------+
| \_ | **Has authorization to sign for the entity been included with   |
| \_ | the 2530, if applicable?**                                      |
| \_ |                                                                 |
|    | *If a person is signing on behalf of the entity, a document     |
|    | (listing the individual who signs) evidencing the legal         |
|    | authority to sign needs to be included with the form.*          |
+----+-----------------------------------------------------------------+