APPENDIX 5. FIRM APPROVAL LETTER

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

OFFICE OF HOUSING - FEDERAL HOUSING COMMISSIONER

FIRM APPROVAL LETTER

Housing Finance Agency Risk Sharing Pilot Program

TO: HUD Mortgagee No:

(Housing Finance Agency/Mortgagee)

(Project Number)

(Street) (Name of Mortgagor)

(City and State)

TO WHOM IT MAY CONCERN:

We understand that you, as Mortgagee, have agreed to make a loan

to (hereinafter called the \"Mortgagor\"),

for units of multifamily housing for an estimated mortgage

amount of \$ , to be secured by a credit

instrument and security instrument (hereinafter jointly called

the \"Mortgage\") covering the real property situated in the

\[city/town\] of \[name\] and State of , at

.

We understand that it is your intention to present the said

Mortgage to the Department of Housing and Urban Development for

mortgage insurance under Section 542(c) of the Housing and

Community Development Act of 1992, and the regulations thereunder

now in effect.

We understand that you agree to reimburse the Department of

Housing and Urban Development per centum of any loss which

may occur due to default while the mortgage insurance is in

force.

Addendum No. to the Risk Sharing Agreement between your Agency

and the Department of Housing and Urban Development reflecting

the units for this project is enclosed. Changes to the number of

units must be made through an additional addendum(s).

The reviews retained by the Department of Housing and Urban

Development pursuant to 24 CFR 266.210(a), (b), and (c), and

266.205(b) have been completed and resulted in the following

determinations:

\(a\) The principals of the mortgagor, general contractor,

consultant or management agent have been cleared through the

Previous Participation and Clearance Review Procedures in

accordance with 24 CFR 200.210 through 200.218.

\(b\) The requirements of 24 CFR 52, Intergovernmental Review

have been met and administrative instructions associated with

the Housing Finance Agency Risk Sharing Program have been

followed/are not applicable.

\(c\) The project is not located in a military impact area.

With the firm approval of units for the subject project,

units remain in your Agency\'s set-aside for use in the

Risk Sharing program.

\[If the subsidy layering review is required and the review is not

delegated to the Housing Credit Agency for the project

jurisdiction, include the following:

\[Prior to issuance of a firm financing commitment by your Agency,

you must submit the documentation for subsidy layering for the

review and approval by the Commissioner.\]

The Federal Housing Commissioner acting herein on behalf of the

Secretary of Housing and Urban Development hereby agrees to

insure said Mortgage, absent fraud or misrepresentation by the

Mortgagee, subject to a reduction of the mortgage amount (if

required), under the provisions of said Act and regulations upon

the following conditions:

1\. The Mortgagee is in good standing and in compliance with

the terms of the Risk Sharing Agreement executed on ,

19 .

2\. A Closing Docket is submitted which meets the terms of 24

CFR 266.420.

3\. The title and mortgage meet the requirements of 24 CFR

266.405 and 266.410, respectively.

4\. For properties subject to the requirements of the Davis-

Bacon Act pursuant to 24 CFR 266.225(a) (i.e., new construction

or substantial rehabilitation insured advances cases), the

Mortgagee has certified at final endorsement, that the laborers

and mechanics employed in the construction of the project

involved have been paid not less than the wages determined by

the Secretary of Labor pursuant to the Davis-Bacon Act.

5\. Other conditions as specified in an attachment to this Firm

Approval Letter.

A review of potential adverse impact by this project on existing

or proposed Federally insured or assisted projects has been made

and comments are attached to this Firm Approval Letter.

Upon endorsement of the Mortgage, the Mortgagee shall pay to the

Commissioner, a mortgage insurance premium equal to per

centum of the principal amount of the Mortgage insured to cover

the first year\'s mortgage insurance premium and shall continue to

make payments thereafter as required by the aforesaid

regulations.

This Firm Approval Letter tentatively obligates credit subsidy

pursuant to the Federal Credit Reform Act of 1990. An amount of

\$ in Fiscal Year 19 credit subsidy will be

obligated to the subject project upon the acceptance of this Firm

Approval Letter in accordance with Department procedures. If the

mortgage amount on which this obligation of credit subsidy is

based increases subsequent to this Firm Approval Letter and the

credit subsidy confirmation letter, your Agency must request an

additional credit subsidy allocation to cover the increase

amount.

This Firm Approval Letter shall expire 1 year from the date

hereof if the subject project has not reached endorsement

(initial endorsement for insured advances; final endorsement for

existing projects) or construction start (for insurance upon

completion cases), unless duly extended in writing by the

Commissioner. Upon such expiration all rights and obligations of

the respective parties shall cease. Prior to any extension of

this letter, the Commissioner may, at his/her option, reexamine

the letter to determine whether it shall be extended and under

what terms it shall be extended.

It is a condition of this Firm Approval Letter that any change in

the Mortgagor upon which this letter is predicated must be

requested in writing by the Mortgagee on behalf of the proposed

substitute Mortgagor(s), and such request must be approved in

writing by the Commissioner.

This Firm Approval Letter and the attachments referred to herein

together with the Risk Sharing Agreement (including Addendum No.

relative to this project), and the applicable regulations, 24 CFR

Part 266, constitute the entire agreement between us, and

acceptance of the terms hereof is evidenced by the signature and

seals of the Mortgagor and Mortgagee upon the lines provided

below.

You must advise the Commissioner of your acceptance of this Firm

Approval Letter by signing on the line indicated and returning

such executed copy to the Commissioner on or before \[insert date

10 business days from the date of the Firm Approval Letter\].

This Firm Approval Letter is conditioned upon and shall not be

enforceable against HUD until and unless all conditions stated

herein have been satisfied.

\*

Secretary of Housing and Urban Development

By: Federal Housing Commissioner

Dated: By:

Authorized Agent

1\. The above Firm Approval Letter to insure is hereby

acknowledged by the undersigned, and we hereby agree to be bound

by the terms thereof.

Attest:

(Mortgagor)

Attest: Housing Finance Agency/Mortgagee

By