4410.1 REV-2

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CHAPTER 1. PROJECT FISCAL PROCEDURES

1-1. NUMBERING NEW PROJECTS. Upon acceptance of an

application (i.e., SAMA, Feasibility for Rehabilitation,

Conditional Commitment, or Firm Commitment, whichever is

received first) by the Director of Development, the

Multifamily Housing Program Staff (Program Staff) will

assign an FHA project number.

A. Deviations. For Section 1101 (Title XI) \-- Group

Practice Facilities, the Program Staff will assign an

FHA project number upon receiving an Application for

Preapplication Analysis (Section 1101).

B. Numbering Machine. The Program Staff must use a

numbering machine to imprint the assigned project

number:

1\. In the upper right corner of the application.

2\. On the tab of the project binder.

3\. On all exhibits, plans, specifications,

correspondence, and other material submitted with

the initial and subsequent applications for that

project.

1-2. COMPOSITION OF PROJECT NUMBERS. Program Staff will

compose project numbers using the issuing office\'s three-digit

code as a prefix and the five-digit serial number.

A. Number Consecutively. For applications under each

section of the Act (Appendix 1), the Program Staff

will assign project numbers consecutively. To

control the consecutive assignment of these numbers,

Program Staff will set up and use a register for each

project mortgage insurance program.

1\. As Program Staff assign each new project number,

they will:

a\. Select the next available sequential number

for that program.

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1-1 6/92

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4410.1 REV-2

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(1-2) b. Note the assigned schedule of collections

number (see paragraph 1-8) on the register

opposite the assigned project number.

2\. Reference the appropriate register sheet to:

a\. Disclose the next open project number under

each section of the Act.

b\. Disclose the schedule of collections number

reflecting the last project number assigned.

B. Use of Suffix Letters. Many types of project

transactions require suffix letters. Appendix 2

lists the suffix letters assigned to different types

of projects. Handbook 4110.1, \"Fiscal and ADP

Handbook,\" details the assignment, formation, and

required suffix designations for home mortgage

sections of the act (i.e., single family).

1-3. CHANGES IN PROJECT NUMBERS. Any change in the status of

a project which will involve the modification of an

existing insured mortgage will be processed under the

existing project number; however, new project numbers

will be assigned under certain circumstances:

A. Supersession by Another Mortgage. If any proposed

change later results in supersession of another

mortgage, a new project number will be assigned and a

new application fee will be required.

B. Transfers between Sections of the Act. Any active

uninsured project transferred between sections of the

Act as permitted by paragraph 1-9 will be assigned a

new project number.

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6/92 1-2

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4410.1 REV-2

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(1-3) C. Complete Change of Plans or Different Site. When

there is a complete change of plans proposed by the

sponsor or a different site is proposed, a new

project number must be assigned.

D. Making Two or More Commitments from a single

Mortgage. In those instances when HUD has issued a

commitment and subsequently receives a request to

split the commitment into two or more mortgageable

entities, the Program Staff will:

1\. Retain the first (i.e., the lowest) project

number.

2\. Assign the next available project number(s)

followed by the appropriate identifying suffix

(as in Appendix 2) to each new project covered by

a separate mortgage.

EXAMPLE. Assume that the Denver, Colorado Office

had issued a commitment for 1,000 units and

assigned Project No. 101-00060. If the Office

subsequently receives a request to divide the

project into three separate projects, the first

containing 500 units, the second 300 units, and

the third 200 units; then the 500-unit project

would retain the number 101-00060, and assuming

that the office had assigned no intervening

project numbers, the Program Staff would assign

101-00061 to the 300-unit project, and 101-00062

to the 200-unit project.

E. Combining Two or More Commitments into a Single

Mortgage. When HUD has issued two or more

commitments and HUD receives a request to combine

them into a single mortgage, the Director of

Development may approve the request if the combined

amount does not exceed the maximum insurable amount

as stated in the applicable FHA regulations. Program

staff will:

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1-3 6/92

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4410.1 REV-2

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(1-3) 1. Retain the first (i.e., the lowest) project

number for the combined project.

2\. Not reassign the higher number.

1-4. DOCKETING. A Sponsor/Mortgagee will submit each

application in triplicate and each supporting exhibit in

duplicate. The application and exhibit duplicates will

form the basis for establishing a Washington Docket and a

Field Office Docket. Handbook 4440.1, \"Final Closing,\"

details how the Field Office will create and maintain

these dockets.

1-5. FEES AND PREMIUMS. The fee and premium chart in Appendix

3 details the amount Field Offices will collect for

specific sections of the Act and processing stages and

the appropriate code numbers. There will be no deviation

from these rates or the basis defined for their use.

A. Form of Payment. checks for fees and premiums must

be payable to the Secretary of the Department of

Housing and Urban Development.

B. Amount of Fees and Premiums. The Director of

Development is responsible for deciding the amount of

fees and premiums due in connection with each

project. The Programs Staff will collect all fees

and premiums.

C. Part or Balance of Fees and Premiums. Inadequate fee

submissions will have their applicable code numbers

(i.e., 1 = Commitment, 6 = Inspection, 7 =

Application) prefixed as follows:

1\. Less than the required amount will be prefixed

with P, for \"part,\" e.g., P-1, P-6, P-7, etc.

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6/92 1-4

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4410.1 REV-2

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(1-5) 2. Increases in amounts of applications, commitments

and insured mortgages that require additional

(1-5) charges and their code numbers will be

prefixed \"B-\_,\" for \"balance,\" e.g., B-1, B-6,

B-7, etc. This latter prefix will also be used

for any balance of fee or premium when collected

on a previously submitted insufficient

remittance.

1-6. EARNED FEES AND PREMIUMS. The following conditions

establish earned fees and premiums.

A. Application Fee. Fees are earned under the following

three step process:

1\. The Multifamily Housing Representative determines

that the SAMA, Conditional Commitment, or Firm

Commitment application is acceptable;

2\. A memorandum is prepared and sent to the Director

of Development recommending that the application

be accepted; and

3\. When the Director concurs in the memorandum, the

application fee is earned and a notation is

included in the endorsement and Form HUD 3416,

\"Schedule of Project Collections,\" (Appendix 5).

B. Inspection Fee. The inspection fee is earned at the

start of the construction stage of a project as

defined in Handbook 4460.1 REV-1. If the amount of

the commitment is decreased before the inspection fee

has been earned, the inspection fee should be based

on the decreased amount of the commitment. When the

commitment is decreased after the fee has been

earned, the inspection fee is determined on the

amount of the commitment before the decrease.

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1-5 6/92

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4410.1 REV-2

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(1-6)

For Section 223(f) projects, the inspection fee

is earned upon the first site visit to inspect

completed repairs, whether before or after

endorsement.

C. Reopening Fee. The reopening fee is earned when the

application for reopening is assigned for processing.

D. Transfer Fee. Upon granting approval, transfer fees

(defined under Paragraph 1-9) will be considered

earned and no refund will be made.

E. Preliminary Analysis Fee. The preliminary analysis

fee for Title XI, group practice facilities projects,

is earned when the request for preliminary analysis

is forwarded to the Department of Health and Human

Services for review. No refund will be made

thereafter.

F. Mortgage Insurance Premium. The mortgage insurance

premium is earned when the credit instrument is

endorsed for insurance.

1-7. PROMPT DEPOSITING OF REMITTANCES. All remittances must

be promptly scheduled, official receipts prepared, and

the original issued to the remitter. The deposit will be

made by the Program Staff by close of the following

business day.

A. Requirements. Prompt deposit of funds is a fiscal

requirement of HUD and is mandatory under Federal

statutes, procedures of the Comptroller General of

the United States, and requirements of the Treasury

Department.

B. After Banking Hours. All collections received after

bank closing hours, and collections on business days

preceding Saturdays and holidays will be deposited by

the close of the next available business day.

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6/92 1-6

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4410.1 REV-2

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1-8. SCHEDULING COLLECTIONS AND PREPARING OFFICIAL RECEIPTS.

A. Official Receipt. Form HUD-27038, \"Official Receipt\"

(Appendix 4) must be prepared for each fee and

initial premium collection. The receipt must be

prepared according to instructions in paragraph 6-5

of Handbook 4110.1 REV-1 except as modified below:

Paragraph 6-5b: include the Alpha Section of Act

Code (see Appendix 1 of this Handbook).

Paragraph 6-5i: include the appropriate

accounting code for the transaction type, e.g.,

Initial MIP fee = Acct. Code 2 (see Appendix 3 of

this Handbook).

The receipt should be distributed according to

instructions in paragraph 6-6 of Handbook 4110.1 REV-1

except that a copy of the Schedule of Project

Collections, Form HUD-3416, should be included as

supporting documentation required by paragraph 6-6b(1).

Form HUD-3416, Schedule of Project Collections (see

Appendix 5 of this Handbook) will be used to report

in summary fees and premiums for multifamily

mortgages.

Additional instructions for the preparation of an

official receipt for certain transactions are shown

in B through G below.

B. Transfers. A \"no money\" official receipt will be

issued in connection with permissible transfers

between sections of the Act immediately upon approval

of the transfer and concurrent notice of such

approval to the mortgagee. The receipt must show the

applicable cross-reference to the former project

number.

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6/92 1-7

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4410.1 REV-2

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(1-8) C. Change in Amount of Application or Insurance. The

amount of the application or amount of mortgage to be

insured must be shown as \"Application Mortgage\" in

each official receipt. When reporting any change in

the amount to be insured, show the new total amount

to be insured immediately following the dollar sign

and then show the former amount as \"Was \_\_\_\_\_\_\_\_\_\_\_\_\_.\"

D. Supersession. In the event of a change in amount by

supersession, show the face amount immediately after

the dollar sign and then show the old outstanding

balance of the superseded mortgage as \"Old Bal. \_\_\_.\"

E. Section 213 Investor Projects. When preparing the

official receipt acknowledging collection of a

commitment fee for Section 213 investor projects,

show the amount of the commitment applicable to the

owner of a management project in the panel for

\"Application-Mortgage\" followed by the letters

\"COMM.\"

F. Transfer Fee. When preparing the official receipt

acknowledging the collection of a transfer fee

involving the transfer of physical assets or

substitution of mortgagor, show \"Transfer of Physical

Assets\" in the panel for \"Application Mortgage.\"

G. Insured Secondary Loans. Whenever an official

receipt is prepared for an application pertaining to

a supplemental or operating loss loan insured under

Section 241 or 223(d), the official receipt issued

for the loan application must be noted in the panel

for \"Location or Property Address\" with the FHA

project number assigned to the underlying first

project mortgage.

1-9. PERMISSIBLE FEE TRANSFERS. Before fees are earned under

the original application, a project application may be

transferred to any other title and section under which it

is eligible. The full amount of the fees collected and

retained under the initial application may serve as a

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6/92 1-8

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4410.1 REV-2

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(1-9) credit for fees due under the transfer. Any excess fee

collected in connection with the initial application will

be refunded as an overpayment, as provided for in

paragraph 1-11. The reason cited for such refund will be

\"Overpayment of Fee\" or \"Transfer to Home Section of the

Act,\" as applicable. A change of mortgagor or sponsor is

not considered to be a transfer. Permissible transfers

to home mortgage (i.e., single family) sections of the

Act will be found in Handbook 4110.1.

A. Project Transfers Between Titles and Sections After

Fees Are Earned. Transfer may be made between stated

sections of the Act, subject to limitations under 1.

below. If a commitment has been issued under the

project, the commitment may be issued for a term not

to exceed the remaining unexpired term of the

original or reopened commitment, or 30 days,

whichever is the greater. The amount of fees

collected and retained under the initial application

(except any earned reopening fees) may serve as a

credit on any fees due under the transfer. No fees

earned under 1 or 2 below may be refunded.

1\. Transfer of Fees Between Titles and Sections

After Processing Has Begun. Credit for fees may

be transferred provided:

a\. Eligibility requirements are met for the

section of the Act to which the transfer is

made.

b\. Fees are earned prior to Initial Endorsement

for Insurance.

c\. Project location is the same.

d\. Plans are substantially the same.

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1-9 6/92

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4410.1 REV-2

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(1-9) 2. Transfer of Fees Within the Same Section of the

Act. After processing has begun and prior to

Initial Endorsement for Insurance, it is

permissible to transfer fees, with full credit

allowed for the amount of fees paid, from one

type of commitment to another, within the same

Section of the Act (e.g., from Section 221(d)(3)

to Section 221(d)(4)), and on the same project.

EXAMPLE: If a sponsor who has submitted an

application for Conditional Commitment processing

submits an application for Firm Commitment for

that project prior to issuance of a Conditional

Commitment, the Conditional Commitment fee may be

counted towards the Firm Commitment fee.

B. Other Transfers of Fees. Any request for a transfer

of fees not classified within the provisions of this

paragraph must be treated as a new application and

assigned a new project number. No fees earned under

the initial application may be credited to the second

application.

1-10. SUBMISSION OF COMPLETELY DIFFERENT PLANS. A new

application and a new application fee are required if

sponsor/mortgagee requests processing of significantly

different plans after architectural and commitment

processing has begun. No credit will be allowed for any

fees previously paid in connection with the earlier

application.

1-11. REFUND OF FEES. A Public Voucher for Refunds (Appendix

6\) will be initiated by the Field Office and forwarded to

the Office of Finance and Accounting, P.O. Box 23290,

Washington, DC 20026. When refunds are to be made under

two or more collection items for one project at the same

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6/92 1-10

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4410.1 REV-2

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(1-11) time, they shall be included in one refund voucher. It

is preferred that required refunds be made at the time of

Initial Endorsement or at the issuance of a commitment.

Earlier refunds are granted if requested by the remitter.

Any erroneous refund must be recollected promptly.

Unearned fees are those fees that are not earned under

paragraph 1-6.

A. Types of Refunds. Refund vouchers covering fee

collections in connection with project mortgage

applications should be prepared in the situations

described in the following subparagraphs only. The

refund voucher will indicate the reason for the

refund, for example, \"Rejected Prior to Start of

Processing,\" \"Should Have Been Rejected Prior to

Start of Processing,\" etc.

1\. Application Rejected or Withdrawn Prior to Start

of Processing. Refund any unearned collected

fees at the time of the closing fiscal

examination. start of processing is the

acceptance by the Director of Development of the

application for processing.

2\. Application Should Have Been Rejected Prior to

Start of Processing. The Multifamily Housing

Representative will prepare a memorandum

detailing why the application should have been

rejected prior to assignment for processing. Any

unearned fees collected will be refunded at the

time of the closing fiscal examination. The

memorandum is to be signed by the Director of

Development and retained in the project docket.

3\. Application Rejected or Withdrawn During

Processing. During the period between assignment

for processing and issuance of a commitment, a

refund will be made of the amount of the fee

which is in excess of the amount earned

(paragraph 1-6) based on the amount of mortgage

requested. This refund will be made at the time

of the closing fiscal examination.

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1-11 6/92

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4410.1 REV-2

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(1-11) EXAMPLE. If an application comes in for Firm

Commitment processing (with an application fee of

\$3 per \$1,000 of the applied mortgage amount),

and if in the conduct of the site appraisal/

market analysis portion of the review the

Director of Development determines that HUD

should reject the application, HUD will refund

the part of the application fee that is not

earned.

4\. Construction Not Started. If construction has

not started as defined in paragraph 1-6.B,

any collected inspection fee may be refunded at

the time the application is withdrawn, provided

any commitment to insure upon completion or any

endorsed instrument is returned for cancellation.

This refund will be made at the time of the

closing fiscal examination.

5\. Overpayment of Fee. An overpayment of fees

requiring a refund during the fiscal examination

includes:

a\. Duplication of fees.

b\. Fees remitted in error.

c\. Situations where the amount of the commitment

issued or the increase in the mortgage

granted is for less than the amount applied.

EXCEPTION. Any minor overpayment of an

application fee will be adjusted in the

collection of the commitment fee; however, if

the overpayment of the application fee is

material, it should be refunded without delay

after receipt in the office.

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6/92 1-12

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4410.1 REV-2

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(1-11) 6. Partial Refund of the Inspection Fee. The refund

voucher (Appendix 6) must be completed to show

the following relevant information in the remarks

portion:

a\. Original amount of the commitment.

b\. Amount of the inspection fee collected.

c\. Each increase in the commitment and the

corresponding amount of inspection fee

collected.

d\. Amount of the commitment outstanding at the

start of construction.

e\. Reason for the foregoing refund shown as

\"Overpayment of Fee.\"

7\. Construction or Financing Prevented. Collected

fees may be refunded where condemnation

proceedings or other legal action taken by any

state, county, municipality, or other public

agency prevents project continuation.

8\. Lack of Need for Housing. Fees may be refunded

if HUD determines that there is no need for the

additional housing represented by an application

in process or active commitment, subject to

surrender of the commitment involved.

9\. Reopening Refused. Refund any collected

reopening fees if the request for reopening is

not approved.

10\. Transfer to Home Section of the Act. When a

transfer is made from a project mortgage section

(i.e., multifamily) to a home mortgage section

(i.e., single family), the fees paid under the

project section which are ineligible for transfer

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1-13 6/92

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4410.1 REV-2

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(1-11) to the home section will be refunded. The refund

voucher must show complete details concerning the

fees collected on the project (schedule of

collections number, date, accounting code, etc.)

and the opening and closing FHA case numbers to

which the transfer is being made. In no instance

should the refund voucher be submitted until

after the transfer has been made.

11\. Rejected or Withdrawn Before Submission to Health

and Human Services (HHS). When the request for

preliminary analysis of a Title XI group practice

facilities project is withdrawn or rejected at

any time prior to the date the submission is

forwarded to HHS, the \$400 fee will be refunded

upon receipt by the Financial Control and

Accounting Division, of a certified voucher from

the Field Office. The reason for refund will be

shown as \"Withdrawn Before Submission to HHS\" or

\"Rejected Before Submission to HHS,\" as

applicable.

12\. Insurance Cannot be Made Effective. If insurance

endorsement is prevented by noncompliance with

commitment, expiration, or withdrawal, etc., any

collected initial mortgage insurance premium will

be refunded at the time of the closing fiscal

examination.

B. Approval of Refund Voucher. Send refund vouchers to

the Office of Finance and Accounting for approval.

Complete the voucher (Appendix 6) per OFA\'s Voucher

Payment Guide Book.

C. Certifying Officer\'s Responsibility. Each voucher

must be properly certified by an authorized

certifying officer. The certifying officer is

accountable for the amount of any illegal, improper,

or incorrect payment resulting from any false,

inaccurate, or misleading certification made.

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4410.1 REV-2

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1-12. CLOSING FISCAL EXAMINATION WORK SHEET. Form FHA 3635,

\"Closing Fiscal Examination Work Sheet\" (Appendix 7), is

designed to record all the fiscal transactions in

connection with the project, from the collection of the

application fee through Final Endorsement, rejection, or

expiration. It should be completed during the course of

the project.

A. Completion of the Form. Program Staff will record

fiscal entries on this form per its instructions

after receipt of the application and deposit of the

remittance. The Director of Development will sign

the certification panel in the lower portion of the

form.

B. Distribution of the Form. The original of the form

will be filed in the fiscal section of the Washington

Docket and a copy in the Field Office Docket.

1-13. CLOSING FISCAL EXAMINATION. A thorough review of all the

fiscal aspects of a project is required. The purpose of

this examination is to: determine the sufficiency of all

fees and premiums; establish those fees and premiums

which have been earned per Paragraph 1-6; and refund

those fees and premiums which have not been earned and

collect those which were.

A. When Closing Fiscal Examinations Are Performed:

1\. Issuance of a commitment. The fiscal examination

will ensure the billing of fee deficiencies as

promptly as possible and avoid retaining unearned

fees during the construction period.

2\. Initial closing. When a mortgage is initially

endorsed for insurance, the mortgagee will be

promptly billed for any fee deficiencies that

exceed \$1. A refund voucher will be initiated

for any fees that both exceed \$1 and which have

been collected but not earned.

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4410.1 REV-2

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(1-13) 3. Final Closing. This is defined as when:

a\. A mortgage is insured by Final (or

Initial/Final) Endorsement of the credit

instrument.

b\. An application or commitment is either

rejected, withdrawn, expired, or terminated.

c\. The SAMA letter has expired.

B. Reviews of the Fiscal Examination. The Field Office

Manager will designate personnel to conduct quality

control reviews of Field Office Dockets to look for

fiscal errors and unreconciled discrepancies. If any

collection item is not represented by an initialed

entry, an imprinted receipt date-stamp, cannot be

traced to a schedule of collections, or fiscal errors

are apparent, the designated personnel will report

promptly to the Director of Development who can take

the necessary corrective action. The Director will

report all actions to the Financial Control Branch,

OFA.

C. Final Closing of Mortgage Transaction. Final review

and arrangement of the original material in the

Washington Docket are the responsibility of the

attorney who conducted the final closing of the

mortgage transaction as detailed in Handbook 4440.1.

D. Deficiency Created by an Erroneous Refund.

Erroneous refunds must be recollected promptly and

reported to Multifamily Accounting and Servicing

Division, Attention: Multifamily Insurance

Operations Branch. This report must include all

pertinent details concerning the transaction and an

explanation of the circumstances surrounding the

initiation, preparation, and certification of the

voucher.

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4410.1 REV-2

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1-14. COLLECTION OF MORTGAGE INSURANCE PREMIUMS. The Field

Office will collect the initial Mortgage Insurance

Premium. Once this premium is collected, the Field

Office will follow the procedures in paragraphs 1-7 and

1-8 of this Handbook. The Multifamily Insurance

Operations Branch of the Multifamily Accounting and

Servicing Division bills and collects subsequent

premiums. Any mortgage insurance premium received in the

Field Office in response to a billing by the Multifamily

Insurance Operations Branch should be forwarded promptly

with a letter of explanation by certified mail to:

Department of Housing and Urban Development

Multifamily Premiums

Post Office Box 198045

Atlanta, GA 30384-8045

1-15. FUNDING AND DISBURSEMENT PROCEDURES. Funding and

disbursement procedures for the Delegated Processing

Procedures and Technical Discipline Contracts should be

in accordance with HUD Handbook No. 7400.10, \"Housing

Funding Control Handbook,\" associated notices and

memorandum, and OFA\'s Voucher Payment Guide Book.

1-16. REQUESTS FOR AMORTIZATION SCHEDULES. Requests will be

submitted within 2 working days of closing to the

Department of Housing and Urban Development, Multifamily

Insurance Operations Branch, HFMMI, P.O. Box 44124,

Washington, DC 20026-4124 in accordance with detailed

instructions provided in Handbook 4440.1.

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