Spreadsheet: c46b8612-c891-4aae-92d9-7630cbb90abd
Sheet: Application Processing-CH.5

[NAME] | ANSWER | Last Updated
How soon should a request for an FHA number occur? | There’s no set time – you can either submit very early or closer to submittal (sooner is usually better) . | 2012-02-01 00:00:00
Two Stage Firm Submittal Process:   "As long as the Final Submission is submitted to HUD prior to the Firm Commitment’s expiration date (including approved extensions), HUD will not regulate when the Final Submission may be submitted to the OHP Underwriter."  Assuming it is within the expiration period, does this mean that the Final Submission does not return to the queue but is submitted directly back to the Underwriter and/or Project Manager for processing? | Correct, the final submission doesn’t wait in the queue – goes directly to the OHP Underwriter. | 2012-02-01 00:00:00
As part of the updated checklist of required application items, item 9.14 requests an example of a Provider Agreement.  Can you tell me if this only applies to Skilled Nursing Homes? | A Provider Agreement applies to any facility that participates in Medicare or Medicaid reimbursements.  (It is essentially an agreement between the facility and the federal government on the terms of reimbursement).  This applies mostly to Skilled Nursing Facilities.  Also be aware some states require Assisted Living Facilities to accept some percentage of Medicaid residents, in which case you would have a Provider Agreement for these projects as well. | 2012-02-01 00:00:00
How many sets of the Preliminary Plans does HUD require at Initial Submission stage processing? | We require one electronic submission of the plans. | 2012-02-01 00:00:00
The land for a new construction project is not currently in the name of the mortgagor. The borrower plans to transfer the title upon receipt of the HUD firm commitment. How is the title work handled in this situation? | It is acceptable to include a special condition in the Firm Commitment. | 2013-03-01 00:00:00
May we pay the HUD application fee when the LEAN underwriter asks for the hard copies of the application and not at the time that we send the electronic documents? | No. While we do understand that there is a lapse between the time of submission and when the project may be pulled from the queue for review, OHP will continue to require the check be included when the project enters the queue. This is when application is officially accepted. | 2012-02-01 00:00:00
In the application package for a 232/241(a), do you want a budget for just the units that are being added to this existing project or for the whole project?  Do you need an actual staffing schedule for the whole combined project or just what is being increased for the additional units? | For the staffing schedule, provide a current staffing schedule and a post construction staffing schedule. | 2013-03-01 00:00:00
As part of the LEAN 232/223(a)(7) application checklist, the following is requested:   Documents from State regarding refinance, (if applicable):    Letter from the State which addresses whether the State will recognize property repairs as capital improvements for reimbursement purposes.   State’s computation of capital reimbursement based on old allowable interest expense and old amortization of loan costs vs. new allowable interest expense and new amortization of loan costs.   Would you please specify when this would apply? | This would apply to A7 deals where either the interest rate is reduced or there are capital repairs, either of which might affect state reimbursement.  We want to make sure we account for any changes in income that would come as a result of the A7.  This will differ from state to state. | 2012-02-01 00:00:00
If we submit an initial application for new construction and complete the remaining items for the final application (i.e. architectural and cost reviews, etc.) prior to the initial application making it through the queue, can we submit the final application to replace the initial application and not lose our place in the queue? | We are not regulating when the Final Submittal may be submitted. So, if you had the Final Submittal ready before or at the same time an [NAME] was assigned, we would allow you to also submit the Final Submittal to the [NAME]. We would appreciate your discussing with the [NAME] how best to logistically do this.  Please note, however, the Initial Submittal would need to be a complete one (at the time the project enters the queue). | 2012-02-01 00:00:00
Would you please describe the generic flow and average time in each phase of a new construction/substantial renovation project application from start to closing? | A brief attempt at a generic flow explanation is below:  2 Stage Submittal:  1. Lender assembles Initial submittal (does not require fully developed plans and specs and costs):  timing depends upon lender and participants response to information requests. 2.  Lender submits Initial Submittal and project enters our queue.  (queue waits vary depending on the number of other new construction or sub rehab projects at a given time). 3.  Project assigned to HUD Underwriter and processed (with Firm issued):  assuming the submission is complete, should be between 30 and 45 days. 4.  Lender assembles Final Submission:  same comments as #1. 5.  Lender submits Final Submission and goes directly to HUD UW and ultimately an amendment to Firm is issued:  we estimate this process should take no longer than 30 days.   6.  Project is brought to closing by lender (typically 30-60 days – can be more or less) and construction is started.   Direct to Firm Submittal:  1. Lender assembles Direct to Firm submittal (requires fully developed plans and specs and costs):  timing depends upon lender and participants response to information requests. 2.  Lender submits Firm Submittal and project enters our queue. (queue waits very depending on the number of other new construction or sub rehab projects at a given time). 3.  Project assigned to HUD Underwriter and processed (with Firm issued):  assuming the submission is complete, should be between 30 and 45 days. 4.  Project is brought to closing by lender (typically 30-60 days – can be more or less) and construction is started. | 2012-02-01 00:00:00
On our LEAN firm submissions, does HUD want to see both hard copies and electronic pdf copies of all 3rd party reports? | Electronic documents are submitted at the time of application submission.  When a project reaches the top of the queue, they will be requested to submit ONE full set of hard copies to the designated OHP Underwriter.  Additionally, a list of specific documents (varying by the type of loan) will be required to be submitted to the HUD Closing Attorney (one set of hard copies of the designated documents).  These latter documents will be specified to you in the email directing you to whom, and where, to ship them. | 2012-02-01 00:00:00
The last page of the Lender Narrative includes an area for signatures under “This report was Reviewed by:”   Is this an area for the lender’s committee members to sign or is it for the internal HUD reviewers? | This signature line is for the lender’s signature. | 2012-02-01 00:00:00
What is HUD looking for in regard to Agreement(s) for the facility? | Below is a definition of what we want on both 9-13 and 9-14:  9-13  Example of Resident Care and/or Rental Agreement(s) for the facility- Agreement which details the rights and obligations of both the nursing home and the resident.  9-14 Example of Provider Agreement(s) for the facility-  An agreement between the Centers for Medicare & Medicaid Services (CMS) and the facility to provide for healthcare services which indicates the provider is qualified to participate and will comply with all regulations. | 2012-02-01 00:00:00
What is the application fee for and who pays for it, the lender or the developer? | The application fee covers the cost of HUD underwriting of the application.  The developer pays it (lender collects from borrower and lender submits check to HUD), although if the other maximum mortgage criterion support, it is a mortgageable item. | 2012-02-01 00:00:00
What are the typical fees? | HUD fees vary depending on the program.  There is an application fee, an inspection fee and a mortgage insurance premium.  The application fee is $3 per $1,000 mortgaged for most of the programs, however, on the 223(a)(7) program the lender may request a refund of half of the application fee after closing.  The inspection fee varies based on the program.  For 223f projects, the inspection fee is typically 1% of the repair amount.  For New Construction projects, the Inspection Fee is $5 per $1,000 mortgage.  223a7 projects do not have an inspection fee.  Mortgage Insurance Premiums are published in the Federal Register and vary depending on the program. | 2013-03-01 00:00:00
Is the HUD 232 application fee reimbursable? | In most cases the answer is No; the fee is earned when OHP processes the project submission.  However, there are two exceptions:  1.) Under Section 223(a)(7), while the loan application fee paid at time of application is equal to .3% of the mortgage amount, please use .15% in the Criterion 10 maximum mortgage calculation on the 92264a, as half of the fee is refundable upon endorsement of the loan.  2)  In a 2-stage Firm Submittal process, if the Initial Submission stage does not result in a Firm Commitment being issued, the lender may request a refund of 50% of the HUD Application fee paid upon submission.         Please note that the Application Fee is a mortgageable expense. | 2013-03-01 00:00:00
How are continuum of care mortgages, where part of the project consisted of skilled nursing beds and part of ALF units, assigned an FHA Number? | [NAME] of care mortgages are assigned a FHA Number according to the Section of the Act comprising the majority portion of the facility. | 2012-02-01 00:00:00
For Section 223(a)7 applications, does the mortgagee need to prepare a new FHA number request? | Yes | 2012-02-01 00:00:00
If doing a 223(a)(7) on a fairly new project (less then 10 years old) and a PCNA is not required, is an underwriter (or designee) inspection is still required? | We require the lender to be an FHA Approved Lender, a MAP approved lender and the underwriter must also be a MAP approved Healthcare underwriter.  In addition to underwrite a LEAN loan, the underwriter must have attended one of our LEAN training sessions.  At the below link you will find information about the general Section 232 process, as well as a link to  website that contains more information on the MAP lender approval process and a list of approved lenders:  http://portal.hud.gov/hudportal/HUD?src=/federal_housing_administration/healthcare_facilities/section_232/lean_processing_page/general_overview_of_fha_insurance | 2012-02-01 00:00:00
Are their any instructions or guidelines for completing the HUD Form 935.2 and the Worksheets for an assisted living facility, New Construction?  The form is more directed for multifamily housing rental projects and any assistance will be greatly appreciated. | If you have questions on completion of the AFHMP, please contact either one of your local FHEO staff members or a FHEO staff member in the jurisdiction where the particular project is located.  FHEO contacts are listed on www.HUD.gov. | 2012-02-01 00:00:00
Will OHP agree to have a "pre-concept" meeting before lenders commence processing new construction applications in order to ensure the proposed project is well supported by the performance of your existing portfolio and does not conflict with any existing projects currently in your pipeline? | OHP does not have the adequate staffing to offer "pre-concept" meetings.  Please see email blasts (late 2009 or early 2010) on how you can get info on any existing insured projects.  Moreover, our HUD.GOV website has a list of all NC/SR LEAN projects sorted by State. | 2012-02-01 00:00:00
What action needs to be taken if the number of beds being used in a facility change during the time the deal is in the queue? | It will be necessary to update the application to indicate the correct number of beds and the calculations based on that new number wherever bed counts appear. There is no need to revise the 2530s if the only change is the number of beds in a facility. | 2012-02-01 00:00:00
Is it acceptable to submit the application prior to completing the APPS process? | The entire Firm application electronic submittal must be submitted in order to enter the queue. | 2012-02-01 00:00:00
Where do we submit the 2530 Previous Participation signed documents, for either electronic APPs or paper submissions? | Regardless of whether the submission is done electronically in APPS or via paper, the original APPS signatures should go with the hard copy of the application that are sent to the assigned HUD Underwriter (when they request it).  Scanned copies of either type should also be included in your electronic submission for entering the queue.  Please note:  if submitting by paper, The Business Partner Registration System (BPRS) registration is still required. | 2012-02-01 00:00:00
A HUD-serviced loan is considering submitting a firm application for 223(a)(7) mortgage insurance, but the borrower is concerned that they will have to re-make requests for the waivers they received when the original HUD loans were closed.  Will such waivers stay in place if the 223(a)(7) application is approved? | The waivers will need to be reviewed as part of the entire 223(a)(7) underwriting process.  The assigned HUD Underwriter will be able to provide you with more details regarding the waivers during the review process.  Please provide the waiver documents along with your 223(a)(7) application. | 2013-03-01 00:00:00
Is there a defined process to request a waiver of the annual Audited financial statement requirement? | The waiver request for submitting an audit will depend on the individual project’s fiscal year end date.  If the FASS date is within 120 days of the project’s fiscal year end this is considered a “stub period” and the owner may request, and will be given, a deferment of the audit for this time period.   The following fiscal year’s audit will be performed on both the following fiscal year and this additional “stub period”.    Guidance on how the owner may request a stub period deferment can be found in the Industry User Guide for the Financial Assessment Subsystem - Multifamily Housing (FASSUB 7.0), Chapter 9, Page 33:                                                                                                                                                                                                                                                                  http://www.hud.gov/offices/reac/products/fass/fassmf_pdfs/chap9_admin_requests.pdf | 2013-03-01 00:00:00
How do you determine the FASS date for the original/new owner of a property? | To determine the FASS date for the original/new owner of a property, adhere to the following: 1.      New Construction or Substantial Rehab Projects – the day after the cost certification cut-off date.   2.      Transfer of Physical Assets (TPA) – the day the deed is signed (not the date recorded) 3.      Refinance of an existing HUD-insured loan –  there is no break in financial reporting  4.      Refinance of conventional financing with HUD-insured financing – the final endorsement date of the new HUD mortgage. | 2013-03-01 00:00:00
Does HUD ever consider waivers of the PCNA on 223(a)(7)s of 223(f) projects completed within the last three years? | In giving consideration to such a waiver request, HUD asks that the lender address the following issues in the application submission:  The last PCNA completed (for the recently approved 223f application) should be included with the application for review by our staff  in considering the request.  The Lender Narrative should:  •         Discuss how the Estimated Useful Life from the PCNA assures the lender (and HUD) that the risk is minimal given just a two year extension.  •         Discuss whether the RfR Schedule proposed by the subject PCNA is on track – consider the balance in the RfR, given years 2-3.  Is the RfR funded at a healthy level or does it need adjusting (upward)?  A lender site visit would be required; in documenting the visit within the Lender Narrative (e.g. who conducted the visit, who they met with, date of visit, etc.) be sure to fully address the physical condition of the facility and the site based on the visit, considering recent REAC (if any) and the PCNA report as a guide (e.g. were any capital improvements completed since time of, or recommended by, the PCNA?).  In the draft Firm, it should be noted that the next PCNA will be due in on the 10th anniversary date of the last completed PCNA.  The OHP Underwriter may raise additional concerns with you that are particular to the deal upon further review of the application. Overall, HUD will be seeking assurance that there would be no real additional risk in not requiring a new PCNA in this case. | 2013-03-01 00:00:00
In submitting 223(a)(7) application, when the existing survey cannot be found, is it okay to submit the application with the new ALTA survey in progress, to be provided prior to closing? | The survey will need to be submitted at the time of firm application.  The survey addendum is a narrative attachment required for the (a)(7) firm application whenever a new survey is required.  If we were to allow the new ALTA survey to be submitted prior to closing and a closer were to find a survey issue, HUD could leave itself open to unnecessary risk. | 2013-03-01 00:00:00
Can an application for a 223(a)(7) refinancing be submitted if it has a soon to expire lock-out (i.e. can the application be submitted prior to expiration, but within a reasonable time-frame for it to be processed and reach firm commitment, and still have the lock out expire before closing)? | Yes, it is acceptable to submit a 223(a)(7) application in advance of the lockout, if you anticipate that it will expire prior to closing.  If the application was to be reviewed by OHP prior to the lockout expiration, it will then be put on hold for closing until the lockout does expire. | 2013-03-01 00:00:00
In a state that requires a certificate of need for adding new beds to an existing nursing home, can we submit the first phase of the firm application for substantial rehab before the CON process is final?  Would this also apply to first phase submittals on new construction?  A condition of the firm commitment would be the final state CON approval and this approval would have to be submitted with “phase two” of the application process. | OHP would not object to submitting the first phase proposal with a condition in the Firm Commitment issued after the Initial Stage of processing that requires the final state CON approval (Early Commencements are not permitted). | 2013-03-01 00:00:00
Will ORCF simultaneously underwrite a 223a7 with processing a TPA? | Yes, OHP will process a TPA and 223a7 simultaneously.  The 223a7 checklist has the documents required to process the TPA if done concurrently.   Please also refer to the February 19, 2010 Email Blast. | 2013-03-01 00:00:00
Where can the HUD requirements for Management Fee computation and payment be found? | The Management Fee and structure should be laid out in the Management Agreement, which would be submitted to HUD as part of the application package.  Though HUD does not dictate how the Management Fee is computed, the HUD approval of the fee is provided in the form HUD-9839-ORCF (Management Certification—Residential Care Facility), which is also required as part of the application.   Please see the September 1, 2011 Email Blast for more detail on Management Fees. | 2013-03-01 00:00:00