Spreadsheet: c46b8612-c891-4aae-92d9-7630cbb90abd
Sheet: Credit & Financial Review-CH.8

[NAME] | ANSWER | Last Updated
If an operator is purchasing its facility back from a REIT in what is essentially a refinancing of outstanding debt, can that be treated as a refinance or is it a purchase in the eyes of HUD? | It is a refinance. | 2012-02-01 00:00:00
Are credit reports still only good for 30 days or can they be submitted within 60 days? | Under LEAN processing, credit reports must now be current within 60 days of entering the queue. | 2012-02-01 00:00:00
Are non-profit (NP) officers and board members considered “principals“ in a transaction where the NP is either the owner or the operator of the transaction?    Are APPS and credit reports required on all board members? | For LEAN, as with any MAP/TAP transaction, we use the 2530 Previous Participation process to determine which “key members “ of any group are to be considered “a principal player,” and thus require 2530 clearance and underwriting of that individual.  For the purposes of underwriting an FHA mortgage, any person with the authority to expend and collect funds for the project, to bind the project in contracts, or to act in any way as a managing member with signatory authority is considered a "principal."  That principal requires 2530 clearance and must be underwritten in the appropriate role of owner, operator, parent of the operator, or management agent, regardless of whether they are a board member, an officer, or the executive director.  We’ll need credit reports on “operating officers” (President, VP, Secretary, [NAME]).  because they are viewed as “principals” of the non-profit Mortgagor Entity since there are no shareholders or LLC members.  Other board members that do not have day to day responsibilities for the operations, would not be required to provide credit reports, but ALL board members must submit 2530s. | 2012-02-01 00:00:00
Can you recommend a credit report provider? | We can’t recommend specific providers, but the 2/20/09 email blast addresses:  •Important Guidance on “Credit Reports”: The Lender Narrative templates that were recently posted contain the following additional program guidance:     Program Guidance:  Dunn & Bradstreet (D&B) or other acceptable commercial credit report for business entities and RCMR ‘residential’ for individuals are required.  If not using D&B, an acceptable commercial credit report must include the following: a)  public filings that includes suits, liens, judgments, bankruptcies & federal debt; b) UCC filings; c) credit payment history;  d) industry standards showing how the facility compares in the areas of financial stress & payment trends; and e) a credit payment delinquency risk score over a 12-month period.  Credit reports can be no more than 60 days old at the time of the Firm Application submission. | 2012-02-01 00:00:00
When arranging cash to close would HUD allow an acceptable rated REIT to evidence cash to close instead of a bank? | Under LEAN we do not confirm cash to close at the underwriting stage.  In construction transactions REIT assets would be considered as evidence that equity requirements could be met. | 2013-03-01 00:00:00
For a single asset LLC whose sole member is a non-profit run by a Board of Directors, I want to clarify that Board Members would be treated like owners and we would not need to get credit checks on the individual Board Members (so long at the “business entity” / parent company checked out). | Yes.  If the principal is a business entity and has an operating history only the business (not the owners or board members) would be required to have a credit review done. | 2012-02-01 00:00:00
Are 2530s required for the administrator? | OHP does not require 2530s for facility administrators. | 2012-02-01 00:00:00
If a proposed sponsor has a reassignment noted on their 2530, does this disqualify them from participating in the LEAN 232 New Construction Program? | No, the default alone would not disqualify the potential sponsors; however we would recommend that you discuss specific details with OHP before contemplating the application submission. | 2012-02-01 00:00:00
Would a low credit score for a Mortgagor and/or Operator, due to problems related to troubled asset, be grounds for rejection of an application? | No, the low credit score alone would not be an automatic rejection.   However, the lender must make a determination as to whether the credit is acceptable – taking into account the specifics at the troubled property and their other credit.  A full description of the situation, and mitigating circumstances, must be included in the Lender Narrative. | 2012-04-01 00:00:00
Do Mortgagor’s/Borrower’s annual financial submission requirements need to be comparative or single-year format? | Mortgagor’s/Borrower’s annual financial submission requirements need to be a single-year format. | 2013-03-01 00:00:00
Where can I find this requirement written out in the Consolidated Audit Guide for Audits of HUD Program? | A summary of auditing guidelines can be found at the following link www.hud.gov/offices/reac/pdf/3frag.pdf   (Section 3.4 lists required financial information); and the Industry User Guide can be found at the following link portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/reac/products/fass/fassmf_guide. | 2013-03-01 00:00:00