MANAGEMENT, SERVICING AND DISPOSITION REQUIREMENTS

FOR PROJECTS WITH 221(d) COINSURED LOANS

TABLE OF CONTENTS

Paragraph Page No.

Chapter 1. INTRODUCTION TO SERVICING COINSURED LOANS

1-1 General Instructions 1-1

1-2 Administering Construction-Related Escrows 1-1

1-3 Administering Operating Deficit Escrow 1-4

1-4 Monitoring Implementation of Affirmative Fair Housing

Marketing Requirements 1-6

Chapter 2. COLLECTIONS AND ESCROWS

2-1 General Instructions 2-1

2-2 Prepayment 2-1

2-3 Collection and Payment of MIP - General 2-1

2-4 MIP in Insurance of Advances 2-2

2-5 MIP in Insurance upon Completion 2-3

Chapter 3. PROJECT ACCOUNTING, FINANCIAL AND REPORTING REQUIREMENTS

3-1 General Instructions 3-1

3-2 Initial Operating Statement 3-1

3-3 Supplemental Income Statement 3-2

3-4 Monthly Financial Reports 3-3

Chapter 4. MANAGEMENT AGENTS AND FEES

4-1 Initial Management Agent and Fee 4-1

4-2 Changes of Management Agents and Fees 4-1

Chapter 5. RESERVE FOR REPLACEMENTS 5-1

Chapter 6. ON-SITE REVIEWS

6-1 General Instruction 6-1

6-2 Checking Compliance with Affirmative Fair Housing

Marketing Requirements 6-1

Chapter 7. RENTS AND CHARGES

7-1 General Instruction 7-1

7-2 Charges for Facilities and Services in Addition to Rent 7-1

7-3 Initial Apartment Rents 7-1

7-4 Rent Adjustments for Subsidized Units 7-1

7-5 Rent Adjustments for Unsubsidized Units 7-2

7-6 Rent Schedule (Form HUD-92458) 7-2

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Paragraph Page No.

Chapter 8. TRANSFER OF PHYSICAL ASSETS 8-1

Chapter 9. DEFAULTS

9-1 Defaults After Final Endorsement 9-1

9-2 Defaults Before Final Endorsement 9-1

Chapter 10. ACQUISITION, MANAGEMENT AND DISPOSITION

10-1 General Instructions 10-1

Section I. Acquiring Uncompleted Projects

10-2 Notice of Election to Acquire and Intent to File a Claim 10-1

10-3 Notice of Acquisition 10-1

Section II. Interim Management

10-4 General 10-2

10-5 Maintenance and Protection 10-2

Section III. Disposition

10-6 Disposition of Uncompleted Projects 10-3

Chapter 11. INSURANCE BENEFITS AND TERMINATION OF INSURANCE

11-1 General Instruction 11-1

Section I. Computing Insurance Benefits

11-2 Overview of Formula for Computing HUD Insurance Benefits 11-1

11-3 Items Included in Computing Insurance Benefits 11-1

Section II. Filing Insurance Claims

11-4 General 11-2

11-5 Other Disbursements by Mortgagee (Schedule D) 11-2

11-6 Mortgagee\'s Report of Special Escrow (Schedule E) 11-2

11-7 Mortgagee\'s Report of Net Sales Proceeds (Schedule F) 11-3

Section III. Remedies for Default by a Lender-Issuer Under

the GNMA Mortgage-Backed Securities Program

11-7 General 11-3

11-8 GNMA Right to Assignment 11-3

11-9 GNMA Right to Claim Insurance Benefits 11-3

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APPENDIX

Appendix

No.

1 Supplemental Instructions for Claims Forms:

Section 221(d) Coinsurance

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FORMS AND DOCUMENTS REFERENCED IN THIS HANDBOOK

Form Number Title OMB Clearance

Number

FHA-233O Mortgagor\'s Certificate of Actual Cost 2502-0112

FHA-2452 Performance Bond-Dual Obligee

FHA-2459 Personal Undertaking

FHA-3259 Surety Bond Against Defects Due

to Defective Materials and/or

Faulty Workmanship

HUD-935.2 Affirmative Fair Housing Marketing Plan 2529-0013

HUD-2744A Allocation of Receipts and Endorsements 2535-0057

HUD-2744C Mortgagee\'s Report of Project 2535-0057

Disbursements

HUD-2744E Mortgagee\'s Report of Special Escrow 2535-0057

HUD-27009B Mortgagee\'s Report of Project 2535-0074

Collections (Coinsured Projects)

HUD-27009D Other Disbursements by Mortgagee 2535-0074

(Coinsured Projects)

HUD-27009F Mortgagee\'s Report of Net Sales Proceeds 2535-0074

HUD-58047 Default Report Before Final Endorsement

HUD-92080 Mortgage Record Change 2535-0087

HUD-924l0 Statement of Profit and Loss 2502-0052

HUD-92426 Multifamily Default Status Report 2502-0041

HUD-92450 Completion Assurance Agreement

HUD-92458 Rent Schedule 2502-0012

Appendix 36 Regulatory Agreement for Multifamily 2502-0272

HBK 4561.1 Housing Projects Coinsured by HUD

Appendix 29 Claim Certification and Identity- 2535-0074

HBK 4566.2 of-Interest Disclosure Statement

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FOREWORD

This handbook supplements HUD Handbook 4566.2, Management,

Servicing and Disposition Requirements for Projects with 223(f)

Coinsured Loans. Coinsuring lenders, HUD field staff, project owners

and management agents participating in the 221(d) coinsurance

program must follow the procedures in that handbook as supplemented

and modified by this handbook.

The statutory authority for the 221(d) coinsurance program is in

Sections 244 and 221 of the National Housing Act, and the program

regulations are in 24 CFR Part 251. In addition to HUD Handbook

4566.2, users of this handbook will need the following handbooks:

IG 2003.3A Audit and Investigation Activities

IG 4000.0 REV Audit Guide for Audits of HUD Approved Non-

Supervised Mortgagees for Use by Independent

Public Accountants

4060.1 Mortgagee Approval Handbook

4060.2 Mortgagee Review Board

4065.1 Previous Participation Handbook

4080.1 Compliance Handbook for Housing

4110.2 The Mortgagee\'s Guide - Home Mortgage

Insurance - Fiscal Instructions

IG 4200.1 Auditing Development Costs of HUD Insured

Projects

4370.1 REV-1 Reviewing Annual and Monthly Financial Reports

4370.2 Financial Operations and Accounting

Procedures for Insured Multifamily Projects

4370.4 Basic Accounting Desk Guide

IG 4372.1 Audit Guide for Mortgagors having HUD Insured

or Secretary-Held Multifamily Mortgages for

Use by Independent Public Accountants

4470.1 Mortgage Credit Analysis for Project Mortgage

Insurance

4561.1 Coinsurance for Mortgage Lenders (Section

221(d))

4566.1 REV-1 Coinsurance for Private Lenders Section

223(f)

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GNMA 5500.1 REV-5 GNMA Mortgage-Backed Securities Guide

7420.3 REV-2 Section 8 Housing Assistance Payments

Program - Existing Housing and Moderate

Rehabilitation Processing Handbook

8025.1 REV-1 Implemention of Affirmative Fair Housing

Marketing Requirements

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