Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices 29815 

DATES: Comments Due Date: August 27, 

2018. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposal. Comments should refer to 

the proposal by name and/or OMB 

Control Number and should be sent to: 

Colette Pollard, Reports Management 

Officer, QDAM, Department of Housing 

and Urban Development, 451 7th Street 

SW, Room 4176, Washington, DC 

20410–5000; telephone 202–402–3400 

(this is not a toll-free number) or email 

at Colette.Pollard@hud.gov for a copy of 

the proposed forms or other available 

information. Persons with hearing or 

speech impairments may access this 

number through TTY by calling the tollfree Federal Relay Service at 800–877– 

8339. 

FOR FURTHER INFORMATION CONTACT: 

James R. Castle, Community Planning 

and Development Specialist, CPD/ 

OBGA/DRSI, Department of Housing 

and Urban Development, 451 7th Street 

SW, Room 7272, Washington, DC 20410; 

email James R. Castle at James.R.Castle@

HUD.GOV or telephone 202–402–2696. 

This is not a toll-free number. Persons 

with hearing or speech impairments 

may access this number through TTY by 

calling the toll-free Federal Relay 

Service at 800–877–8339. 

Copies of available documents 

submitted to OMB may be obtained 

from Ms. Pollard. 

SUPPLEMENTARY INFORMATION: This 

notice informs the public that HUD is 

seeking approval from OMB for the 

information collection described in 

Section A. 

A. Overview of Information Collection 

Title of Information Collection: 

CDBG–DR 24-month Expenditure 

Deadline Extension Request. 

OMB Approval Number: 2506- 0206. 

Type of Request: Extension of 

currently approved collection. 

Form Number: 

Description of the need for the 

information and proposed use: This 

information collection is being 

conducted by CPD/OBGA to assist the 

Administrator of HUD in determining, 

as required by sec. 904(c) under Title IX 

of the Disaster Relief Appropriation Act, 

2013 (PL113–2), whether to grant 

extensions of the 24-month expenditure 

deadline for grantees receiving funds 

under the Act. The data will allow HUD 

to expeditiously review request for 

extensions of the deadline where a 

deadline puts recovery at risk. 

Respondents (i.e. affected public): 

States and Units of Local Governments. 

Estimated Number of Respondents: 

25. 

Estimated Number of Responses: 25. 

Frequency of Response: 1. 

Average Hours per Response: 4. 

Total Estimated Burdens: 25. 

Information 

collection 

Number of 

respondents 

Frequency 

of response 

Responses 

per annum 

Burden 

hour per 

response 

Annual 

burden hours 

Hourly 

cost per 

response 

Annual 

cost 

2 Year Expenditure 

Deadline Waiver Request ......................... 25.00 1.00 25.00 4.00 100.00 $25.43 $2,543.00 

Total ...................... 25.00 1.00 25.00 4.00 100.00 25.43 2,543.00 

B. Solicitation of Public Comment 

This notice is soliciting comments 

from members of the public and affected 

parties concerning the collection of 

information described in Section A on 

the following: 

(1) Whether the proposed collection 

of information is necessary for the 

proper performance of the functions of 

the agency, including whether the 

information will have practical utility; 

(2) The accuracy of the agency’s 

estimate of the burden of the proposed 

collection of information; 

(3) Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; and 

(4) Ways to minimize the burden of 

the collection of information on those 

who are to respond; including through 

the use of appropriate automated 

collection techniques or other forms of 

information technology, e.g., permitting 

electronic submission of responses. 

HUD encourages interested parties to 

submit comment in response to these 

questions. 

Authority: Section 3507 of the Paperwork 

Reduction Act of 1995, 44 U.S.C. Chapter 35. 

Dated: June 14, 2018. 

Lori Michalski, 

Acting General Deputy Assistant Secretary, 

for Community Planning and Development. 

[FR Doc. 2018–13650 Filed 6–25–18; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

[Docket No. FR–7001–N–28] 

30-Day Notice of Proposed Information 

Collection: HUD Multifamily Rental 

Project Closing Documents 

AGENCY: Office of the Chief Information 

Officer, HUD. 

ACTION: Notice. 

SUMMARY: HUD has submitted the 

proposed information collection 

requirement described below to the 

Office of Management and Budget 

(OMB) for review, in accordance with 

the Paperwork Reduction Act (PRA). 

The purpose of this notice is to allow for 

an additional 30 days of public 

comment. 

DATES: Comments Due Date: July 26, 

2018. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposal. Comments should refer to 

the proposal by name and/or OMB 

Control Number and should be sent to: 

HUD Desk Officer, Office of 

Management and Budget, New 

Executive Office Building, Washington, 

DC 20503; fax: 202–395–5806, Email: 

OIRASubmission@omb.eop.gov. 

FOR FURTHER INFORMATION CONTACT: 

Colette Pollard, Reports Management 

Officer, QMAC, Department of Housing 

and Urban Development, 451 7th Street 

SW, Washington, DC 20410, email 

Colette Pollard@hud.gov, or telephone 

202–402–3400. This is not a toll-free 

number. Persons with hearing or speech 

impairments may access this number 

through TTY by calling the toll-free 

Federal Relay Service at (800) 877–8339. 

Copies of available documents to be 

submitted to OMB may be found at: 

https://www.hud.gov/program_offices/ 

housing/mfh/mfhclosingdocuments or 

obtained from Ms. Pollard. 

SUPPLEMENTARY INFORMATION: This 

notice informs the public that HUD is 

seeking approval from OMB for the 

information collection described in 

Section A. The previous PRA Federal 

Register notice that solicited public 


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29816 Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices 

comment on the information collection 

for a period of 60 days was published 

on September 5, 2017 at 82 FR 41977. 

A. Overview of Information Collection 

Title of Information Collection: HUD 

Multifamily Rental Project Closing 

Documents. 

OMB Approval Number: 2502–0598. 

Type of Request: Extension of 

currently approved collection and 

implementation of two new forms, with 

revisions to certain documents as shown 

in redline comparison found at the 

website link above. 

Form Numbers: HUD–91070M; HUD– 

91071M; HUD–91073M; HUD–91710M; 

HUD–91712M: HUD–91725M; HUD– 

91725M–CERT; HUD–91725M–INST; 

HUD–92023M; HUD–92070M; HUD– 

92223M; HUD–92408M; HUD–92412M; 

HUD–92414M; HUD–92420M; HUD– 

92434M; HUD–92441M; HUD–92442M; 

HUD–92450M; HUD–92452A–M; HUD– 

92452M; HUD–92455M; HUD–92456M; 

HUD–92464M; HUD–92466M; HUD– 

92476.1M; HUD–92476aM; HUD– 

92476M; HUD–92477M; HUD–92478M; 

HUD–92479M; HUD–92554M; HUD– 

92907M; HUD–92908M; HUD–93305M; 

HUD–94000M; HUD–94001M. 

Description of the need for the 

information and proposed use: The 

Closing Documents are used in FHAinsured multifamily rental project 

transactions. In connection with this 30- 

day notice, HUD generally tried to 

improve the forms in terms of 

readability and editorial corrections, 

while also addressing public comments 

received in connection with the 60-day 

notice. While complying with the PRA, 

this 30-day notice provides information 

beyond that normally provided in such 

notices. This notice identifies 

substantive changes that HUD has made 

to the Closing Documents in response to 

public comments submitted in response 

to the 60-day notice and responds to 

significant issues raised by commenters 

on the Closing Documents. HUD 

received comments from four law firms 

and one industry group. 

Discussion of Significant Revisions 

Consolidated Certifications—Borrower, 

HUD–91070M 

One commenter suggested HUD merge 

the Owner’s Certification and 

Acknowledgement of Program 

Obligation for Broadly Affordable, 

Affordable and Green/Energy Efficient 

Multifamily Housing Mortgage 

Insurance Premiums (MIPs) and the 

Acceptance of Housing Choice 

Vouchers, form HUD–92013–D, with the 

Consolidated Certifications—Borrower, 

to make the closing process more 

efficient and reduce the number of 

forms used in closings. HUD agreed 

with the suggestion and merged the 

92013–D into the HUD–91070M. 

Survey Instructions and Report, HUD– 

91073M 

One commenter suggested HUD’s 

Office of Multifamily Housing 

Production (Multifamily Housing) 

eliminate the Report portion of the 

document consistent with the LEAN/ 

232 Healthcare program, and that to 

have the two programs with different 

closing requirements is arbitrary and 

capricious. HUD declines to accept this 

suggested change and comment. The 

risks associated with the two programs 

are different, thus it is not arbitrary and 

capricious for the two programs to have 

different requirements. Here, HUD has 

determined that the Report is necessary 

because it calls attention to important 

property characteristics, allowing HUD 

staff to more efficiently address the 

findings to protect HUD’s interests. 

With the recent improvements to the 

form, HUD believes the burden estimate 

is realistic. 

Opinion of Borrower’s Counsel, HUD– 

91725M 

One commenter suggested changes 

concerning evidence of foreign 

qualification of entities within the 

organizational structure, as set out in 

Section I. HUD agreed with the 

comment and added an instruction to 

the HUD–91725M–INST to ‘‘include 

foreign qualification when Borrower has 

qualified the entity voluntarily or such 

qualification is required by state law or 

HUD Program Obligations.’’ 

HUD disagreed with a comment that 

Section 1, paragraph S (Residual 

Receipts Note/Surplus Cash Note) 

should be deleted or moved because of 

new paragraph W for private secondary 

financing. HUD has determined that 

there may be instances where there is 

only a Surplus Cash Note. 

Regarding Section 1, paragraph MM 

(Additional Transaction Documents), 

one commenter noted that the change to 

include all documents related to the 

loan closing could result in disclosure 

of certain due diligence certifications 

and documents that HUD does not allow 

lenders to recite in the lender 

certification documents. HUD agreed 

with the comment and modified the 

HUD–91725M–INST to limit paragraph 

MM to ‘‘all loan documents related to 

the FHA closing that will be delivered 

at closing that are not otherwise listed 

in the form Opinion . . .’’ 

HUD agreed with a comment to 

modify the language in opinion 4 

concerning authorization related to 

controlling entities within the 

borrower’s organizational hierarchy 

‘‘whose authorization is required.’’ HUD 

rejected a comment to delete opinion 9 

because Multifamily Housing does in 

fact permit trusts as borrower entities 

per the MAP Guide. 

One commenter stated that the 

addition of ‘‘Supporting Documents’’ in 

opinion 11 is a change in policy, and 

that it results in HUD asking for an 

opinion about whether LIHTC 

documents prevail over the bond 

documents or vice versa. HUD disagreed 

with this comment as the concept of 

‘‘Supporting Documents’’ is not new to 

the form. Further, neither ‘‘Primary 

Loan Documents’’ nor ‘‘Supporting Loan 

Documents’’ include the secondary 

financing documents, Source 

Documents, or tax credit documents in 

paragraphs T–W of Section I. 

Consequently, HUD is not asking for an 

opinion about which of these 

documents would control over the 

others in the event there is a conflict. 

HUD disagreed with a similar comment 

about the addition of ‘‘Supporting 

Documents’’ in opinion 12 for the same 

reason. 

One commenter objected to the 

required disclosure of litigation 

threatened in writing in confirmation (g) 

of Section IV. HUD determined such 

disclosure is necessary because HUD is 

aware of situations where threatened 

litigation resulted in actual of filing of 

litigation. Further, HUD is adding the 

requirement in the 91725–INST that 

litigation threatened in writing must not 

only be identified, but a detailed 

explanation and risk assessment must 

be provided. 

Exhibit A to Opinion of Borrower’s 

Counsel, HUD–91725–CERT 

One commenter noted that the 

Section 7 certification that there is no 

default under the Regulatory Agreement 

would only be applicable in the context 

of a refinancing where there is an 

existing HUD Regulatory Agreement. 

HUD agreed with the comment and 

revised the language to clarify that also 

no state of facts that exists now or that 

with the passage of time will result in 

a default under the Regulatory 

Agreement or PEA (for Section 6). 

HUD agreed to a suggestion from one 

commenter to revise the signature block 

in the HUD–91725M to reflect signature 

by an attorney or law firm, which HUD 

points out is currently allowed in the 

Instructions. 

Instructions to Opinion of Borrower’s 

Counsel, HUD–91725M–INST 

HUD made several changes to the 

91725M–INST that resulted from 


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comments discussed above relative to 

the HUD–91725M. 

Two commenters objected to the 

requirement that paragraphs Y (Zoning) 

and GG (Utility Letters) be dated within 

120 days of closing as being too 

inflexible. HUD agreed with the 

comment and revised the instructions to 

reflect that the timeframe for the 

documentation will vary depending on 

the circumstances and specific facts of 

a given transaction, keeping in mind 

that HUD is interested in receiving 

recent documentation. Notwithstanding, 

the date of documentation must not be 

more than one year prior to closing. 

One commenter stated that the 

instruction for Section I, paragraph a, 

seems to indicate all organizational 

documents up the chain of the borrower 

must be included in the Opinion, even 

if they do not show up in the signature 

block of the borrower. The commenter 

also believes that discretion should be 

afforded to the local counsel to 

determine which organizational 

documents are necessary or relevant to 

issue the legal opinion in accordance 

with state law. HUD disagreed with this 

comment. Discretion is provided to 

local counsel, but the Opinion form is 

drafted to ensure that all entities in the 

chain are identified if necessary to 

establish authorization. The instructions 

state: ‘‘. . . Borrower’s Counsel’s review 

must include the organizational 

documents of Borrower and any 

controlling entity within the Borrower’s 

organizational hierarchy to the extent 

necessary to provide the required 

opinion.’’ 

HUD made a correction to the 

instructions for paragraph T (Public 

Entity Agreement) of Section I to 

establish that the term not only covers 

agreements between a borrower and a 

public entity, but also any agreement 

which binds the project, regardless of 

whether the current borrower is a 

signatory. 

Lease Addendum, HUD–92070M 

One commenter suggested HUD add 

bracketed options for different possible 

defined terms for the parties and 

documents. HUD rejected this 

suggestion because the different 

possible names are too numerous, and 

there is already flexibility to allow the 

underlying terms from the lease to be 

incorporated into the defined terms of 

the Lease Addendum. In response to a 

comment about the definition of ‘‘days,’’ 

HUD revised the form to clarify that 

‘‘days’’ means calendar days. HUD 

agreed with a comment to revise the 

form to require landlords to deliver an 

estoppel certificate from time to time to 

the tenant, lender, or HUD. 

HUD disagreed with a comment to 

add Native American tribal lands as a 

public entity eligible for waiver of the 

HUD option to purchase in Section 7. 

HUD Multifamily Housing will consider 

such requests on a case-by-case basis in 

Headquarters due to the unique and 

complex laws and requirements 

governing Native American tribal land. 

One commenter requested 

clarification of lender’s cure and 

foreclosure rights under Section 11. 

HUD rejected this comment as it 

appeared to confuse lender’s rights 

under the Lease Addendum with 

lender’s rights under the Security 

Instrument. The Security Instrument 

provides that borrower’s failure to pay 

to lender ground rents is a Monetary 

Event of Default under the Security 

Instrument; HUD determined the Lease 

Addendum does not also need to 

provide that nonpayment of ground 

rents is a default under the Security 

Instrument. 

Another comment requested HUD add 

a finite term to the cure period in 

Section 11. HUD disagreed with the 

comment because the time required to 

cure will vary depending on the 

circumstances. Consequently, HUD has 

determined that reasonableness is the 

appropriate standard where the lender 

or HUD are reasonably and diligently 

pursuing a cure of a Ground Lease Event 

of Default. 

Surplus Cash Note, HUD–92223M 

One commenter suggested the recent 

addition of the limitation on borrowers’ 

repayment to 75% of cumulative 

Surplus Cash in Section 2 should not be 

in this document but rather in the 

Regulatory Agreement. HUD disagreed 

with the comment because it is 

important that payees of borrowers have 

no doubt or misunderstanding about 

this limitation when the borrower is the 

maker on multiple Surplus Cash Notes 

or any other subordinate loans. Payees 

will not necessarily know to look to the 

Regulatory Agreement for this 

restriction on repayment. Another 

commenter suggested that the limitation 

is mathematically unclear, with which 

HUD disagreed. The comment didn’t 

seem to take into consideration that a 

borrower could be the maker on more 

than one Surplus Cash Note, and 

without the language in question, could 

result in the borrower paying more than 

75% of Surplus Cash in a given year to 

repayment on multiple subordinate 

loans. Regarding this same requirement, 

HUD made further revisions to clarify 

that the 75% of available Surplus Cash 

limitation applies to all subordinate 

debt of the borrower, not just debt under 

Surplus Cash Notes. 

One commenter requested HUD add 

‘‘except upon the prior written approval 

of HUD’’ to the end of Section 8 to allow 

for the sale or assignment of the Surplus 

Cash Note for LIHTC transactions. HUD 

did not accept this requested policy 

change, as the present requirement has 

not been a barrier to using LIHTC in 

FHA Multifamily transactions, and HUD 

does not anticipate it being a barrier in 

the future. 

HUD added bracketed language in 

Section 9 to accommodate the policy to 

allow for compounding of interest in 

certain LIHTC transactions. 

Subordination Agreement—Public, 

HUD–92420 

HUD agreed with several commenters 

that Section 3(b) needed further 

clarification to allow for an exception to 

the general rule that the subordinate 

loan may not mature before the FHAinsured loan for forgivable loans. HUD 

rejected a comment that the HUDrequired language in Section 3 should 

not be required when the subordinate 

loan is forgivable, as these protections 

are still needed for forgivable loans in 

the event the borrower defaults under a 

forgivable loan and the subordinate 

lender seeks repayment. 

HUD added language in Section 3(c) 

that payments due under borrowers’ 

subordinate loans are limited to 75% of 

cumulative Surplus Cash, consistent 

with MAP Guide policy and the Surplus 

Cash Note. One commenter asked that 

HUD add back ‘‘from project income’’ 

(from the version of the form published 

in connection with the 60-day notice) 

relative to payments due under the 

subordinate note. HUD rejected this 

change as unnecessary because the 

Subordination Agreement—Public 

continues to permit borrower repayment 

from non-project sources. In response to 

a commenter and consistent with the 

change to the Surplus Cash Note, HUD 

made a change to Section 3 to allow for 

compounding of interest for certain 

eligible LIHTC transactions. One 

commenter suggested that removal of 

the requirement in Section 5 that the 

subordinate lien be extinguished upon a 

deed in lieu of foreclosure is contrary to 

the MAP Guide. While the commenter 

is correct, HUD Multifamily Housing 

decided to revise this policy (for public 

subordinate lenders only) as reflected in 

the document; the next issuance of the 

MAP Guide will include this revised 

policy. 

A commenter asked that Section 10 be 

revised to allow for automatic resubordination of the subordinate lien for 

Sections 223(a)(7) and 223(f) 

refinancings; HUD declined to make this 

change as the form already requires 


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automatic subordination of refinancing 

the FHA-insured senior loan, which 

includes FHA refinancings. HUD made 

a technical correction in Section 10(d) 

to remove the allowance of deletion of 

this paragraph for forgivable loans. This 

paragraph contains an important senior 

lender protection that is applicable to 

forgivable loans in the event of a default 

under the forgivable loan and payment 

becomes due. 

One commenter requested HUD add 

the schedule/exhibits of senior and 

subordinate loan documents to the 

signature page. HUD agreed with this 

comment and made the corresponding 

revision. 

Lender’s Certificate, HUD–92434M 

HUD accepted several editorial and 

other non-substantive corrections 

suggested by commenters and shown in 

the redline comparison published in 

connection with this 30-day notice. 

In response to a comment, HUD 

added language in Section B.2. to 

accommodate situations where certain 

Firm Commitment conditions cannot be 

satisfied until after initial closing. HUD 

further revised language in Section B.4 

to clarify the Firm Commitment should 

not be attached to the Lender’s 

Certificate in response to another 

comment. 

One commenter objected to references 

to the reserve for replacement amount 

and related exhibit in Section C.4; HUD 

disagreed the references could lead to 

an inconsistency but changed the 

language to reference the Firm 

Commitment instead of the Regulatory 

Agreement. Relative to UCC searches in 

Section C.8, one commenter asked to 

qualify the provision for UCC filing 

searches to exclude UCC filings to be 

terminated upon closing of the insured 

loan; HUD rejected this change in 

procedure. Similarly, HUD rejected a 

requested change to Section E.7 for 

materials stored off-site to be limited to 

those paid from insured loan proceeds, 

as HUD’s collateral for the insured loan 

includes all borrower assets, not only 

those paid from insured loan proceeds. 

One commenter asked HUD to modify 

Section E.10 to allow for inclusion of an 

exhibit describing delayed permits and 

approvals to be obtained at a later date, 

but the commenter did not provide a 

rationale for the requested modification. 

HUD therefore declined to accept this 

change. Concerning lenders’ due 

diligence in Section E.10 in ensuring all 

required permits and approvals have 

been obtained, HUD agreed with several 

commenters that the prohibition against 

relying on the Opinion of Borrower’s 

Counsel should be removed. However, 

HUD determined that the ‘‘reasonable’’ 

standard for the required due diligence 

should remain. Another commenter 

asked HUD to revise the definition of 

‘‘HUD-insured Loan Funds’’ in Section 

F; HUD rejected the language as 

unnecessary given existing guidance on 

these structures. 

One commenter suggested that HUD 

add the Lender’s Assurance of 

Permanent Financing to the Lender’s 

Certificate; while HUD generally agreed 

with the comment, HUD decided it 

would be too difficult to adopt at this 

time. 

Building Loan Agreement, HUD– 

92441M 

HUD did not receive comments on 

this document but decided to make a 

needed technical correction to add 

language in Section 4(c) to ensure 

compliance with 24 CFR 200.54. 

Construction Contract, HUD–92442M 

HUD agreed to make several nonsubstantive editorial changes to improve 

the document in response to several 

comments and as shown in the redline 

comparison published in connection 

with this 30-day notice. 

HUD declined a request to remove the 

requirement in Article 2.C. for the 

lender to sign the plans and 

specifications as this is a MAP Guide 

requirement that HUD has decided to 

maintain. HUD agreed to a proposed 

change in Article 3.A to set the start 

date for work within fourteen days of 

the date of the Construction Contract. 

One commenter requested HUD 

modify the liquidated damages 

provision in Article 3(E) to allow 

borrowers to recoup soft costs. HUD 

declined to revise its policy that soft 

costs not be allowed in the calculation 

of liquidated damages. Another 

commenter asked about the Identity of 

Interest Amendment referenced within 

the form. HUD has determined that this 

form should not have been removed 

from the MAP Guide Appendices as it 

is still required when applicable. The 

MAP Guide will be revised to again 

include this document in the 

appendices. 

One commenter noted that the 

bracketed language in Section 4.E is 

confusing because Section 2.A.8 does 

not include the incentive payment 

addendum as a construction document 

in identity of interest cases, but Section 

4.E requires the addendum for identity 

of interest cases. HUD agrees with this 

comment and has revised Section 2.A.8 

(re-numbered as Section 2.A.7) 

accordingly. 

HUD agreed with one comment that 

the owner as opposed to the contractor 

is sometimes responsible for paying for 

the building permits and as-built survey 

and made corresponding changes in 

Article 7.A and 7.C to allow for this 

possibility. 

Performance Bond, HUD–92452M 

No public comments were submitted 

for this form, but HUD determined that 

several technical corrections were 

needed. HUD revised Section 3 to use 

the already-defined term ‘‘Obligees’’ 

rather than separately listing Borrower 

and Lender as ‘‘Obligees.’’ This change 

is consistent with the first paragraph of 

the form and with Section 2 of the form 

Payment Bond, HUD–92452A–M 

Separately, HUD included a 

parenthetical definition of the alreadycapitalized term ‘‘Obligor,’’ which is 

similarly defined in the form Payment 

Bond. 

Request for Endorsement of Credit 

Instrument, HUD–92455M 

HUD accepted several editorial and 

other non-substantive corrections 

suggested by commenters and shown in 

the redline comparison published in 

connection with this 30-day notice. 

One commenter requested HUD revise 

the language in Section I.A.7 to qualify 

lender’s certification about completion 

of borrower’s repairs ‘‘Based on the 

Repair Certification of Borrower . . . .’’ 

or ‘‘to the best of lender’s knowledge 

and information . . . .’’ This change is 

unnecessary as the entire section is 

qualified by the best of lender’s 

knowledge. HUD rejected a similar 

comment with respect to the new No 

Material Adverse Change certification in 

Section I.A.14 given that the entire 

section is qualified by the best of 

lender’s knowledge. Further, this new 

provision was explicitly identified in 

the 60-day notice as new, rather than a 

clarification of the form, as the 

commenter suggested. 

Regarding the 50% holdback for cashout refinances in Section 223(f) and 

addressed in Section I.B.1 of the form, 

HUD declined to change its policy at 

this time to allow for an alternative 

percentage. 

One commenter objected to the 

reference to the reserve for replacement 

amount and exhibit in Section I.B.5. 

HUD disagreed the reference could lead 

to an inconsistency and notes that the 

provision references the Firm 

Commitment instead of the Regulatory 

Agreement and made further edits to 

clarify that the Firm Commitment is not 

attached to the form. 

Regarding the list of fees and charges 

of lender in Section I.C.3, HUD 

disagreed with a request to reference the 

Certified Closing Statement instead of a 

separate list, as HUD wants this 


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information separated from the other 

information that is included in the 

Certified Closing Statement. 

One commenter asked HUD to modify 

Section I.C.11 to allow for inclusion of 

an exhibit describing delayed permits 

and approvals to be obtained at a later 

date but did not provide any rationale 

for the modification. HUD therefore 

declined to accept the requested 

modification. Concerning lenders’ due 

diligence in I.C.11 in ensuring all 

required permits and approvals have 

been obtained, HUD agreed with several 

commenters that the prohibition against 

relying on the Opinion of Borrower’s 

Counsel should be removed, but kept 

the ‘‘reasonable’’ standard for the 

required due diligence. Another 

commenter asked HUD to revise the 

definition of ‘‘HUD-insured Loan 

Funds’’ in Section I.D.; HUD rejected 

the language as unnecessary given 

existing guidance on these structures. 

HUD disagreed with a comment 

concerning Section II.A.1, requesting 

that the borrower certification about the 

Certificate of Lender be qualified, 

because the entire section is already 

qualified by ‘‘knowledge and belief.’’ 

HUD further disagreed with the request 

in II.A.to exclude customary vendor 

payables not over thirty days old from 

the list of unpaid obligations, as these 

items fall outside the scope of the 

language in most scenarios. One 

commenter objected to newly added 

language requiring the borrower to 

certify to the status of the Mortgaged 

Property and Security Instrument as 

more appropriate for a title company. 

HUD rejected this comment as 

borrowers in FHA-insured Multifamily 

transactions are sophisticated business 

entities that can engage professionals to 

assist them in making these 

determinations. 

One commenter suggested that HUD 

add the Lender’s Assurance of 

Permanent Financing to the Certificate 

of Lender; while HUD generally agreed 

with the comment, HUD decided it 

would be too difficult to adopt at this 

time. 

Regulatory Agreement, HUD–92466M 

One commenter requested HUD revise 

the definition of ‘‘Affiliate’’ to change 

‘‘policy’’ to ‘‘actions,’’ but did not 

sufficiently identify or explain the 

commenter’s perceived deficiencies 

with the current definition. HUD 

therefore declined to make the 

requested change. As a general matter, 

HUD believes that the terms ‘‘Affiliate’’ 

and ‘‘Principal’’ in the context of the 

Regulatory Agreement should remain 

distinct from ‘‘Controlling Participant’’ 

or any other term in the new previous 

participation regulations because the 

participants and scope of activity is 

different. Accordingly, HUD has elected 

to largely preserve the former 24 CFR 

200.215 definitions of ‘‘Affiliate’’ and 

‘‘Principal’’ previously referenced in the 

Regulatory Agreement rather than 

referencing the new term or regulations. 

One commenter requested HUD 

elaborate on the types of assets that can 

be held by borrowers apart from the 

Mortgaged Property defined in I.1.s. 

HUD declined to make changes to this 

paragraph to incorporate any additional 

specific examples of permissible nonproject funds. As stated in prior FAQs, 

references to items such as distributed 

Surplus Cash and permissible loan 

repayments are themselves examples of 

potential non-project funds. If a party is 

uncertain as to how to treat a particular 

asset after reviewing applicable Program 

Obligation, such party should contact 

the Office of Multifamily Housing for 

guidance. 

One commenter requested that HUD 

improve the definition of Residual 

Receipts in I.1.dd. HUD declined to 

make the proposed change to the new 

definition of Residual Receipts, as it 

would be inappropriate to describe a 

method of calculating Residual Receipts 

in this document because any residual 

receipts requirements will generally 

stem from separate HUD programs and 

source documents (e.g., Section 8 HAP 

contracts) with their own residual 

receipts language. Accordingly, the 

definition merely refers to residual 

receipts requirements in general terms, 

while the Residual Receipts Rider still 

functions to more precisely reference 

the source of residual receipts 

restrictions and their effect on the 

Regulatory Agreement. 

HUD also received a comment to 

provide greater clarity to the Section 30 

listing of other occupancy and use 

restrictions. It was not HUD’s intent to 

change policy on what information is to 

be shown in this Section 30, but rather 

to clarify the existing policy by making 

the separate instructions more distinct. 

Thus, subsection ‘‘a’’ of this revised 

Section 30 corresponds to the first 

sentence in the current version of the 

Regulatory Agreement. This subsection 

‘‘a’’ instruction is designed to 

encompass any occupancy restrictions 

or policy that may be imposed in 

connection with the FHA loan itself. For 

further clarification, HUD included 

examples of types of loan-related 

occupancy restrictions and policies that 

fall under this category. The subsection 

‘‘b’’ instruction corresponds to the 

second sentence of the current version 

of the Section 30 language. This is 

intended to cover other occupancy 

restrictions that, while not a 

requirement of the FHA loan itself, may 

otherwise be convenient to identify in 

the Regulatory Agreement. In such 

cases, such other restrictions may only 

be referenced in Section 30 with the 

caveat that they are included for 

informational purposes only. 

Escrow Agreement for Deferred Repairs, 

HUD–92476.1 

HUD received a comment to add 

alternative language for lenders that are 

approved for self-administration of the 

escrow. HUD agreed with this comment 

and added additional language in 

Sections 5 and 6 along with a new 

Exhibit C to reflect transactions where 

HUD has approved delegation to the 

lender of administration of the repair 

escrow. 

The remaining changes to the form 

shown in the redline comparison 

published in connection with this 30- 

day notice are HUD-initiated 

improvements and updates given the 

expanded levels of work that are 

permitted in certain 223(f) transactions. 

HUD added a new Alternative B for 

Sections 1 and 2 for transactions with 

Level 2/Level 3 repairs funded with tax 

credit equity, along with a new Exhibit 

D to include the tax credit equity payin schedule, and that the additional 

assurance of completion amount may be 

cash or a letter of credit. 

HUD added language in Section 8 to: 

(a) Clarify that the Latent Defects 

Deposit is only required when required 

by the Firm Commitment; (b) clarify that 

it is calculated on both ‘‘critical’’ and 

‘‘non-critical’’ repairs performed before 

or after closing; and (c) include the 

amount when a Latent Defects Deposit 

is required, or to insert ‘‘N/A’’ if it is not 

required. 

Given that the Firm Commitment 

requires latent defect assurances when 

the repairs/alterations are greater than 

$400,000, regardless of when the work 

is completed, HUD added a new 

Alternative B in the Recitals to capture 

the possibility of a Latent Defects 

Deposit when all work is completed 

before closing and no deferred repair 

escrow is required. Further, HUD added 

an instruction to revise the title of the 

document and strike paragraphs 1–3 

and 5–7 in such situations. 

Borrower’s Oath, HUD–92478M 

One commenter asked why the 

Borrower’s Oath is notarized and why it 

can’t be combined with one of the other 

closing documents executed by the 

borrower. This document is notarized 

because at least one provision is 

required by statute to be certified under 

oath. In terms of merging the contents 


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29820 Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices 

into another document. HUD declined 

to accept this suggestion because the 

notary requirement and the form’s 

contents support keeping it as a standalone document. 

Supplementary Conditions to the 

Construction Contract, HUD–92554M 

HUD received a comment to add to 

this document any provisions in the 

AIA A201 that HUD requires be stricken 

or modified per the FHA Multifamily 

Program Closing Guide. HUD declined 

to make this change. Including the 

requested change is not practical 

because the closing documents are 

renewed every three years, and the AIA 

A201 document may change prior to or 

soon after the documents are renewed. 

HUD has determined that it is more 

practical to announce changes in policy 

via the Closing Guide or other HUD 

directives. 

Subordination Agreement—Private, 

HUD–92907M 

One commenter asked HUD to clarify 

whether all ‘‘Subordinate Loan 

Documents’’ referenced in Section 1(p) 

actually means ‘‘all’’ of such documents. 

HUD determined no additional 

clarification is needed, the document 

clearly states, ‘‘include all documents.’’ 

HUD added language in Section 3(c)(1) 

that payments due under borrower 

subordinate loans are limited to 75% of 

cumulative Surplus Cash, consistent 

with MAP Guide policy and the Surplus 

Cash Note. To be consistent with the 

change to the Surplus Cash Note and 

Multifamily Housing policy, HUD made 

a change to Section 3(c)(4) to allow for 

compounding of interest for certain 

eligible LIHTC transactions. 

A commenter asked that Section 10 be 

revised to allow for automatic resubordination of the subordinate lien for 

Sections 223(a)(7) and 223(f) 

refinancings; HUD declined to make this 

change as the form already requires 

automatic subordination of refinancing 

the FHA-insured senior loan, which 

includes FHA refinancings. One 

commenter requested HUD add the 

schedule/exhibits of senior and 

subordinate loan documents to the 

signature page. HUD agreed with this 

comment and made the corresponding 

revision. 

Agreement and Certification, HUD– 

93305M 

One commenter requested that 

Section 14 be revised to not require 

attachment of special condition 

certifications. HUD agreed with the 

comment and removed the requirement 

to attach the separate certifications. 

These certifications should be inserted 

into the body of the document in 

Section 14. 

Security Instrument, HUD–94000M 

One commenter asked for additional 

clarity on the content of Exhibit B. HUD 

agreed with the comment and added 

instructions to indicate that form state 

Addendum provisions do not need to be 

separately referenced in the Exhibit B 

specifically if such addenda are 

otherwise validly attached to and 

incorporated in the Security Instrument 

under applicable state law. HUD 

similarly revised the instruction 

language in Sections 43 and 49. 

Another commenter suggested HUD 

add as an option ‘‘[Leasehold]’’ where 

the document covers a leasehold estate. 

HUD agreed with the suggestion and 

added the term ‘‘Leasehold’’ as optional 

bracketed language on the Security 

Instrument cover, title on page 2, and 

preamble paragraph. This language is to 

be inserted for transactions involving a 

leasehold estate. Note that use of the 

Security Instrument in such transactions 

must comply with the HUD 

requirements for leasehold mortgages, 

including use of the form Lease 

Addendum. 

Note, HUD–94001M 

One commenter requested additional 

language to harmonize the Note with the 

requirements of form HUD–9807 to put 

borrowers on notice of HUD’s 

administrative prepayment procedures 

to protect lenders from arguments that 

they are improperly conditioning 

prepayment on HUD approval. HUD 

declines to add the suggested language 

to the Note. The existing Note language 

does not conflict with form HUD–9807. 

To the extent any party has questions on 

HUD’s administrative processes 

regarding loan prepayment or FHA 

insurance termination, please refer to 

relevant Program Obligations and forms, 

including Section 11.8 of the MAP 

Guide and the instructions in form 

HUD–9807. 

Respondents (i.e. affected public): 

Lenders, Borrowers, Housing Finance 

Agencies, Government Agencies that 

support affordable housing, Multifamily 

Housing Developers, Lenders’ Counsel, 

Borrowers’ Counsel, Contractors, 

Architects, Secondary Financing 

Lenders 

Estimated Number of Respondents: 

17,468. 

Estimated Number of Responses: 

17,468. 

Frequency of Response: 1. 

Average Hours per Response: .72 

hours. 

Total Estimated Burden Hours: 

12,576.96. 

B. Solicitation of Public Comment 

This notice is soliciting comments 

from members of the public and affected 

parties concerning the collection of 

information described in Section A on 

the following: 

(1) Whether the proposed collection 

of information is necessary for the 

proper performance of the functions of 

the agency, including whether the 

information will have practical utility; 

(2) The accuracy of the agency’s 

estimate of the burden of the proposed 

collection of information; 

(3) Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; and 

(4) Ways to minimize the burden of 

the collection of information on those 

who are to respond; including through 

the use of appropriate automated 

collection techniques or other forms of 

information technology, e.g., permitting 

electronic submission of responses. 

HUD encourages interested parties to 

submit comments in response to these 

questions. Please note that HUD will not 

consider any redline/strikeout 

comparison documents submitted by 

commenters, as it is far too inefficient 

for HUD to consolidate and consider 

comparison versions of each of the 

documents from numerous interested 

parties. HUD will only consider 

proposed changes to the documents 

listed under Section A that are 

submitted in narrative and/or bulleted 

form (preferably in MS Word form), 

accompanied by a detailed explanation 

and rationale for each requested change. 

However, commenters may include in 

their detailed explanation and rationale 

the relevant excerpt(s) from the 

document(s) with redline/strikeouts. 

Authority: Section 3507 of the Paperwork 

Reduction Act of 1995, 44 U.S.C. Chapter 35. 

Dated: June 8, 2018. 

Colette Pollard, 

Department Reports Management Officer, 

Office of the Chief Information Officer. 

[FR Doc. 2018–13660 Filed 6–25–18; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

[Docket No. FWS–HQ–IA–2018–0051; 

FXIA16710900000–178–FF09A30000] 

Foreign Endangered Species; Receipt 

of Permit Applications 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Notice of receipt of permit 

applications. 


sradovich on DSK3GMQ082PROD with NOTICES