4115.3

CHAPTER 2. APPLICATION PROCESSING

2-1. REQUIRED EXHIBITS.

a\. Signed ASP-9 if not previously returned.

b\. Form 1322, original and one copy.

c\. One Form 2800 Package for each basic house type

(see Appendix 2).

d\. Three Sets of Final House Plans and FHA Form 2005, Description

of Materials.

e\. Three Sets of the Master Plot Plan. Grading may be shown on

the Master Plot Plan or on a separate grading plan.

f\. One Form 2439, Application and Commitment - Schedule of

Alternate Package for each basic house type.

2-2. MASTER CONDITIONAL COMMITMENT (MCC). After the sponsor has

signed and returned an ASP-9, a request for a Master Conditional

Commitment, Form 1322, may be submitted. Each MCC application

must include an original and one copy of the form. The mortgagee

will complete the following information on the Form 1322:

a\. Section A:

\(1\) Block 1. FHA Mortgagee Number.

\(2\) Block 2. FHA File Number as indicated on the heading

of the ASP-9, Pre-Construction Analysis Letter.

The FI-DT Number will be completed by HUD-FHA.

\(3\) Block 3. Indicate the proper section of the Act.

\(4\) Block 4. Indicate subdivision name, location, and

sponsor\'s name.

\(5\) Block 5. Indicate full name and address of mortgagee.

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4115.3

b\. Section C, Schedule of properties.

\(1\) The mortgagee will complete only two columns in the

Schedule of Properties, Lot and Block, and House Type.

The lots should be grouped by house type rather than

numerical lot and block order. See Appendix 1 for the

appropriate format. The case number and Lot Value

Adjustment will be added by HUD staff. If the mortgage;

wishes to indicate a requested lot premium on certain

lots, this should be done by way of a covering letter or

attached exhibit.

\(2\) The mortgagee will not complete any portion of the

alternate schedule as the required information will be

submitted by the mortgager on Form 2439.

2-3. FHA FORM 2800 PACKAGE. A separate Form 2800 package will be

prepared for each house type rather than each case.

a\. The Form 2800 for each house type is completed as if it were

a single case with the following exceptions.

\(1\) Property Address: Enter only general information

identifying the entire submission. (Examples might be:

Tract 3800, Napa, California, FHA File 123 or third

Addition to Emerald Heights, Charleston, West Virginia,

FHA File No. 74-101.)

\(2\) Model Identification: Indicate the house type.

\(3\) Lot Information: Leave the lot size information area

blank.

\(4\) Sales Price: Indicate the sales price of the basic house

without a premium lot or alternates included.

\(5\) Legal Description: List by lot and block each lot where

this house type is currently proposed.

b\. Appendix 2 of this handbook illustrates a typical Form 2800-1

with an MCC submission.

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4115.3

2-4. RECEIVING.

a\. ASP-9. If a signed ASP-9 is not part of the submission, the

Receiving Unit must determine if one has been previously

submitted. If the sponsor has previously returned a signed

ASP-9, the subdivision unit will provide a copy to the

Receiving Unit, as soon as it is returned, so that the

Receiving Unit will have it on file.

b\. Processing. At the conclusion of the preliminary review, the

cases are accepted for processing.

\(1\) Case numbers are entered on the reverse side of the MCC

and a duplicate copy is returned to the mortgagee with

Form 2800-2, Notice of Acceptance.

\(2\) When a reject lot not enumerated in the ASP-9 is listed

in error by the mortgagee on the Form 2800-1 and/or the

MCC, a line will be drawn through the lot entry. The

alteration will be marked \"FHA Correction,\" dated and

initialed during the preliminary review. A notice will

be sent to the mortgagee calling their attention to the

action.

\(3\) The mortgagee is billed for each lot shown on the MCC

with the exception of lots that may be rejected in the

preliminary review as described above.

c\. Case Binders. The Receiving Unit will establish individual

case binders at the time of billing. OCR (Optional Character

Reading) Card No. 1 and the Daily Progress Control Sheet are

transmitted to the records clerk. Only the OCR cards are

filed in the individual binders at this time.

2-5. RECORDS AND ASSIGNMENT.

a\. The Records Clerk registers the cases on the \"Record of Home

Mortgage Applications Received,\" Forms 2089d and 2089d1. The

records clerk mails the OCR No. 1 cards to Central Office.

b\. The MCC Package is routed to the Assignment Unit. The master

status card is pulled for the Visual Control Board. The Form

2800-4, Data Page, of each basic house type is pulled from

each 2800 package. The individual case binders which only

contain the OCR cards are left in the Valuation Section.

The following information is forwarded to the staff appraiser

for processing:

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4115.3

\(1\) One (1) set of plans and specifications.

\(2\) The Mortgage Credit copy of Form 2439-3, Application and

Commitment - Schedule of Alternates.

\(3\) The 2800-4 from each basic house package.

\(4\) One copy of the Master Plot Plan and lot value

information from the valuation subdivision file.

\(5\) One copy of cover letter, including information on any

lot value adjustments, if submitted.

\(6\) Valuation Subdivision Processing File. In this file are

kept a copy of all basic 2800-3 packages from any previous

MCC submission and any MCC attachments or amendments

for this subdivision.

2-6. ARCHITECTURAL PROCESSING. The remainder of the mortgagee\'s

submission will be forwarded to the Architectural Section for

processing. Because of the amount of work involved in processing

a group submission, every effort must be made at the supervisory

level to insure that a group submission is not delayed in the

receiving and assignment functions.

a\. If house types are those for which EAR files have been

established, the \"repeat case method\" will be used. Where

new house types are submitted, EAR files will be established

for each house type. Cases will then be processed by the

\"repeat case method.\"

b\. An inspection set will be made for each house type in the

group submission. A copy of the MCC and the Master Plot Plan

will be filed with the applicable inspection sets.

c\. As soon as the architectural processing is concluded, the

package is forwarded to the Valuation Section with

architectural conclusions recorded on the Form 2800-3. Cost

estimates for proposed alternates will be recorded on

Form 2439-3, Architectural Report.

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4115.3 CHG 3

2-7. VALUATION PROCESSING. With the aid of those exhibits initially

provided, the Appraiser completes the field analysis. If the

architectural analysis was not completed at the time that the

valuation assignment was made, the Appraiser may request needed

information by phone and delay completion of Form FHA-2800-3,

FHA Underwriting Report, until his/her return to the office.

Where the Appraiser is working from Form FHA-2800-4, the data page

of the Underwriting Report, processing will be transferred to

Form FHA-2800-3 upon completion of architectural processing.

a\. After receiving the cost estimates of any alternates involved,

the value of these alternates is recorded on the reverse side

of the MCC or such attachments as may be required where there

is an extensive list of alternates.

b\. See Appendix 3 for an example of MCC \"Attachment No.1\" which

will be used to record an extensive list of alternates.

\* c. At the option of the Field Office, Form HUD-92439, Schedule

of Alternates, may be utilized as an attachment, in lieu of

MCC \"Attachment No. 1\". \*

2-8. FORM FHA-2800-3, UNDERWRITING REPORT. The Form FHA-2800-3 is

completed for each basic house type in accordance with outstanding

instructions with the following exceptions:

a\. Block 4, Property Address: Complete only that portion of

the property a dress that is common to all of the lots in

the group submission, i.e., Shadyside, Section 1.

b\. Block 16, Lot Size: Omit this information as the sizes will

differ from lot to lot.

c\. Block 32, Replacement Cost: Use the typical market price

for a building site on the basic Form FHA-2800-3 in

determining the replacement cost estimate.

2-9. LOT VALUE ADJUSTMENT. By way of a letter which accompanies the

group submission, the sponsor may request a lot premium on

certain lots. If this is the case, the Appraiser will be provided

with a copy of this letter so that the request may be considered

as part of the valuation field analysis.

a\. The Typical Value for lots in this group submission will be

determined in accordance with outstanding instructions. Any

significant variation in lot value will be recorded in Section

C, Schedule of Properties, on the reverse side of the MCC in

the column entitled, \"Lot Value Adjustment.\"

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4115.3

b\. An Example of a typical application of this feature would be

a group submission which received a typical lot valuation of

\$8,000. If this submission contains a number of lots that

back-up to the park, or in some other way have a value of

\$9,000 each, these lots would receive a plus lot adjustment

of \$1,000 each.

c\. In Determining the Actual Amount of the lot adjustment, the

appraiser must consider the manner in which his estimate will

be used as a final value adjustment. At the time that a firm

commitment is requested on a lot that has received a value

adjustment, the mortgage credit processor will adjust the

basic house value estimate by the amount of any lot adjustment

that may be indicated on the Master Conditional Commitment for

the affected lot.

d\. Because the Replacement Cost Will Not be Recalculated to

introduce a higher or lower allowance for Miscellaneous

Allowable Costs or Marketing Expense as lot premiums or

downward adjustments are being established, the appraiser

should consider these items. A lot adjustment would normally

be restricted to \$100 multiples and a premium of leas than

\$250 should not be ascribed.

e\. Individual Lot Values are entered on a copy of the recorded

map in the Valuation Subdivision Processing File and lot value

adjustments, if any, are noted for later entry on the MCC.

2-10. REVIEW AND MCC PREPARATION. After the basic Form 2800 package

and the Form 2439-3 have been reviewed by the Chief Appraiser or

his designee, the Master Conditional Commitment is prepared.

a\. A Blank or Machine Copy of the Sponsor\'s MCC is used to

collect the required information for the completion of the

MCC\. All of the required information can be obtained from

the basic Form 2800 package and from the Form 2439 with the

exception of information concerning possible lot value

adjustments. The formal MCC is then typed from the completed

draft. See Appendix 1 for a completed MCC.

b\. A Valuation Clerk prepares four (4) copies of the Master

Conditional Commitment which are reviewed and signed by the

Chief Appraiser or his designee. Distribution of the form

is as follows:

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4115.3

\(1\) Original to the Valuation Subdivision Processing File;

\(2\) Two (2) copies to the mortgagee (each-copy should include

one copy of FHA Form 1322-3. see Chapter 4).

\(3\) One copy to the Architectural Section inspection sets;

\(4\) One additional copy of the signed original is made for

each case binder.

c\. The Original 2800-1 and a copy of the signed 2800-3 and Form

2800-4 established for each house type will also be placed in

the subdivision processing file. One copy each of the 2800-1

and the 2800-3 will be placed in each case file with the copy

of the MCC.

d\. The Form 2439-3, completed by the staff appraiser will also

be filed in the Subdivision Processing File.

2-11. CHANCE OF HOUSE TYPE.

a\. A Form 2577, Request for Acceptance of Changes in Approved

Drawings and Specifications, is not necessary for a change of

house type to another approved basic plan, i.e., one already

shown on the outstanding MCC or Amendment, unless such a

change is precluded by a commitment condition on the MCC or

Amendment.

b\. Sites and/or Projects which may pose special problems, such

as extreme topography, will have the MCC conditioned to require

all changes to be approved prior to start of dwelling

construction. A standard commitment requirement is provided on

the MCC for this purpose.

c\. Review Procedure. Where an office permits a builder to

interchange approved houses without submitting a change order,

the builder must be warned to avoid repetitive plotting of

identical plans and/or elevations on adjoining lots. Where a

builder\'s past performance indicates that the normal review

procedure is warranted, this will be so indicated by requiring

that a change order Form 2577 be submitted requesting prior

approval on all changes of house type.

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4115.3

d\. Townhouse Proposals. Occasionally, a builder must revise

lot lines in a townhouse HUD proposal which may or may not

affect plans other than the tract map. These changes must be

approved by the Field Office prior to construction. Therefore,

the following condition will be used for townhouse

proposals when issuing the Master Conditional Commitment:

\"When changing plans within tract, caution should

be taken in order to insure that legal descriptions

of the individual properties are not changed. If a

change in plan requires a change in lotting, written

approval from this office is required prior to start

of construction.\"

e\. Individual Changes. Should individual changes to the basic

house be necessary to add components, increase size, change

specifications, etc., Form 2577 is required in triplicate and

must be identified by use of the MCC identification number.

Form 2577 is also required to include a new house type on an

outstanding MCC.

2-12. MASTER CONDITIONAL COMMITMENT - ATTACHMENT 1. In those instances

where an extensive list of alternates is involved, a special

attachment to the MCC has been provided. When Attachment 1 is

used as an MCC attachment or an attachment to an Amendment to the

MCC, the regular alternate schedule portion of the basic document

will refer the reader to the Attachment 1 for a list of approved

alternates. See Appendix 3 for an example of Attachment 1.

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