92434M Lender's Certicate

1
Lender's Certificate

U.S. Department of Housing
and Urban Development
Office of Housing

OMB Approval No. 2502-0598
(Exp. //)

Public Reporting Burden for this collection of information is estimated to average 0.75 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Response to
this request for information is required in order to receive the benefits to be derived. This agency may not collect this information, and you are not
required to complete this form unless it displays a currently valid OMB control number. While no assurance of confidentiality is pledged to respondents,
HUD generally discloses this data only in response to a Freedom of Information Act request.
Warning: Any person who knowingly presents a false, fictitious, or fraudulent statement or claim in a matter within the jurisdiction of the U.S.
Department of Housing and Urban Development is subject to criminal penalties, civil liability, and administrative sanctions.

Project Name:

HUD Project No.:

Lender:

Borrower:

Processed Under:

 Multifamily Accelerated Processing (MAP)

 Traditional Application Processing (TAP)

To the U.S. Department of Housing and Urban Development (HUD):

The entity executing this Lender’s Certificate (“Certificate”), dated as of this __ day of
_____________, 20____, is _______________________, (“Lender,” also referred to as “Mortgagee”
in Program Obligations) the lender under that certain Security Instrument dated
___________________, 20____, executed by _____________________, (“Borrower” also referred
to as “Mortgagor” in Program Obligations), securing a Note evidencing a Loan by Lender to Borrower
in the principal sum of $________________, which Lender has agreed to make on condition that it
be insured by HUD pursuant to the Contract of Insurance comprised of Section ______ of the
National Housing Act, as amended, and its implementing regulations.
The definition of any capitalized term or word used herein can be found in this Certificate, and
if not found in this Certificate, then found in the Note, the Regulatory Agreement between Borrower
and HUD, and/or the Security Instrument, except that the term “Program Obligations” means (1) all
applicable statutes and any regulations issued by the Secretary pursuant thereto that apply to the
Project, including all amendments to such statutes and regulations, as they become effective, except
that changes subject to notice and comment rulemaking shall become effective only upon completion
of the rulemaking process, and (2) all current requirements in HUD handbooks and guides, notices,
and mortgagee letters that apply to the Project, and all future updates, changes and amendments
thereto, as they become effective, except that changes subject to notice and comment rulemaking
shall become effective only upon completion of the rulemaking process, and provided that such future
updates, changes and amendments shall be applicable to the Project only to the extent that they
interpret, clarify and implement terms in this Certificate rather than add or delete provisions from such
document. Handbooks, guides, notices, and mortgagee letters are available on “HUDCLIPS,” at
www.hud.gov.

The undersigned on behalf of Lender certifies to HUD that to the best of his or her knowledge
and belief, the following statements and information are true, correct and complete.
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A. GENERAL
Lender agrees that the Security Instrument, the Note, this Certificate, and any documents submitted
with this Certificate are considered to be consistent with and shall be interpreted consistently with
HUD’s regulations as they pertain to the Contract of Insurance.
1. Lender agrees to be bound by Program Obligations.
2. Lender agrees to furnish a complete copy of this Certificate to any successors and assigns of
Lender, and agrees that, in any contract for sale or assignment of the Security Instrument to a
successor Lender (for purposes of servicing the Loan only), the successor Lender shall be bound
by the provisions of this Certificate that relate to the servicing of the Loan. As long as the Note is
insured by HUD, any successor Lender and/or servicer must be approved by HUD in accordance
with Program Obligations.
3. There has been no material adverse change to the (a) underwriting assumptions stated on the
attachments to the Firm Commitment, including any amendments; (b) financial condition or
creditworthiness of the Borrower, or principals thereof; (c) Borrower’s ability to perform its
obligations or responsibilities under the Loan Documents; or (d) Project; and no event has
occurred or circumstances exist that may result in such material adverse change to any of the
above
4. In addition to and not in derogation of all other undertakings made or mentioned herein, Lender
agrees to fully perform all duties imposed in or described by this Certificate; and that it is Lender’s
present intent to fully perform such duties.
5. Lender acknowledges that in making its decision to provide the requested mortgage insurance
HUD relies upon the certifications and agreements made herein.
6. Lender has committed to provide Borrower with permanent financing in the amount stated above
at an interest rate of _______% per annum for a term of ________ payments, with amortization to
commence [insert commencement timeline] subject to terms described below.
B. CONSTRUCTION LOANS
1. Lender submits separately a payment to HUD for $____________ , which is [insert MIP rate] ___
of the Loan amount, covering the first mortgage insurance premium (“MIP”), together with the
other items called for in the Firm Commitment dated __________________, 20___, and in any
extensions or amendments thereof.
2. All conditions of the Firm Commitment required to be satisfied as of initial endorsement of the
Note (“Initial Endorsement”) have been fulfilled to date. All work completed prior to Initial
Endorsement has been completed in accordance with, and met, all HUD imposed conditions, and
has been approved by HUD in writing.
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3. For all cases involving insured construction advances, Lender submits separately the Building
Loan Agreement dated _______________, 20___ between Lender and Borrower, which shall
govern advances of the Loan proceeds.
4. Lender submits separately a certified survey of the Mortgaged Property, if required by HUD, and a
title policy for the Project as specified in Program Obligations together with evidence that the
Mortgaged Property is properly zoned.
5. Lender shall submit to HUD applications for insurance of advances of Loan proceeds, if and as
required, under Program Obligations at least thirty (30) days after the date of disbursement of
such advance by Lender. Applications for advances shall be accompanied by all documentation
required by HUD.
6. Lender shall not release Loan funds in the amount approved for disbursement unless or until the
current endorsement to the title policy, insuring Lender and HUD, evidences that: (a) the Security
Instrument is prior to all liens and encumbrances that may have attached or defects that may have
arisen subsequent to the recording of the Security Instrument, except such liens or other matters
approved in writing by HUD consistent with Program Obligations, including tax liens not delinquent
and (b) the Security Instrument is prior to all mechanics’ and materialman’s liens filed of record
subsequent to the recording of the Security Instrument, regardless of whether such liens attached
prior to the recording date.
C. ESCROWS, DEPOSITS, UCC AND DATA
1. Lender has collected from Borrower, or Borrower has made subject to the control and order of
Lender in a depository satisfactory to Lender in accordance with Program Obligations, the
following deposits, escrows and sums as required by the Firm Commitment:
(Check and complete applicable paragraphs.)
□ (i) The sum of $_________, required over the Loan proceeds for costs to complete the
Project, in the form of cash. Lender agrees that these funds must be used before any Loan
proceeds are advanced [insert if alternative disbursement arrangement has been approved “,
unless, in accordance with Program Obligations, HUD provides its prior written consent to the
disbursement of funds on the following basis: _______”].
□ (ii) The sum of $_________, required over the Loan proceeds for costs to complete the
Project, shall be provided in the form of a [grant OR loan] from _______________, a nongovernmental source. Lender has also collected an escrow from [grant OR loan] in the amount
of $___________ in the form [cash OR letter of credit]. Lender agrees that these funds must
be used before any Loan proceeds are advanced [insert if alternative disbursement
arrangement has been approved “unless, in accordance with Program Obligations, HUD
provides its prior written consent to the disbursement of funds on the following basis:
_______”].

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□ (iii) The sum of $_________, required over the Loan proceeds for costs to complete the
Project, shall be provided in the form of a [grant OR loan] from _______________, a
governmental source. Lender has also collected an escrow from [grant OR loan] in the amount
of $___________ in the form [cash OR letter of credit]. The agreement providing for the
advancement of [grant OR loan] proceeds executed among Lender, HUD, and the
Governmental Authority is dated _____________, 20__ and is executed
by_____________________.
□ (iv) The sum of $_______________ in the form of [cash OR letter of credit] for the escrow
deposit guaranteeing payment for off-site facilities. The Escrow Agreement for Off-Site
Facilities is dated ___________________, 20__, and is executed by
______________________________.
□ (v) The sum of $_______________ in the form of [cash OR letter of credit] for the interest rate
differential escrow, which is equivalent to the difference between the interest rate in effect after
cut-off for cost certification and the permanent interest rate upon which the debt service on the
Loan is calculated. [Include if applicable: The Escrow Agreement for Interest Rate Differential
is dated ___________________, 20__, and is executed by
______________________________.]
□ (vi) The sum of $ __________ in the form of [cash OR letter of credit] as the Working Capital
deposit, which Lender agrees to maintain under its control. Funds in this Working Capital
deposit must be released or allocated for the purposes indicated in the Escrow Agreement for
Working Capital (dated _______________, 20__, and executed by
______________________), and for no other purpose without the prior written approval of
HUD.
□ (vii) The sum of $ _____________ in the form of [cash OR letter of credit OR excess mortgage
proceeds OR excess land equity] for the Initial Operating Deficit Deposit. Funds from the Initial
Operating Deficit Deposit must be released with HUD approval and in accordance with the
Escrow Agreement for Initial Operating Deficit, dated ________, 20__, and executed
by__________________________.
□ (viii) The sum of $ ___________in the form of [cash OR letter of credit] as the Sponsor’s
guarantee to meet an initial operating deficit. Funds in the Sponsor’s guarantee escrow must
be released or allocated for the purposes indicated in the Escrow Agreement for Additional
Contribution by Sponsors, dated ___________, 20__, and executed by
____________________.
□ (ix) List other escrows (e.g., demolition): [Insert escrow amount and description of any related
escrow agreement]____________________________
2. Lender submits separately: [Check applicable paragraphs.]
□ (a) Off-site bond in the amount of $______________.
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□ (b) Evidence to the effect that required off-site utilities and streets shall be provided by the
public authorities having jurisdiction or by public utility companies serving the Project.
3. Lender submits separately a duplicate copy of the following assurances for the completion of the
project: [Check applicable paragraph.]
□ (a) Performance and Payment Bonds from a HUD-approved surety in the penal sum of
$______________ for each bond.
□ (b) Lender has collected from Borrower, or Borrower has made subject to the control and order
of Lender, in a depository satisfactory to Lender in accordance with Program Obligations, the
sum of $___________ in the form of [cash OR letter of credit] for deposit in accordance with
the Completion Assurance Agreement (Form HUD-92450M). Funds from the Assurance of
Completion deposit shall be disbursed, with HUD’s written approval, in accordance with said
Agreement.
4. Beginning on the Amortization Commencement Date of the insured Loan or at such later date as
may be agreed to by HUD in writing, Lender shall require a monthly deposit with Lender (or in a
depository satisfactory to Lender in accordance with Program Obligations) in the amount [of
_____ ] OR [as specified in the Reserve for Replacement Schedule - Exhibit D to the Firm
Commitment (attached hereto as Exhibit)] constituting a Reserve for Replacement. The Reserve
for Replacement account shall at all times remain under the control of Lender or Lender’s
Designee, and be insured or guaranteed by a federal agency in accordance with Program
Obligations. Withdrawals from such reserve may be made only with the prior written approval of
HUD (unless otherwise authorized pursuant to Program Obligations). Notice of any failure to
receive the required deposits shall be forwarded to HUD within 60 days of the date such deposits
are due. Lender agrees that the amount of the monthly deposit may be increased or decreased
from time to time at the written direction of HUD in accordance with Program Obligations.
5. Lender shall obtain a new Capital Needs Assessment (“CNA”) report for HUD to evaluate every
ten (10) years, beginning [insert date ten (10) years after the anticipated date of final endorsement
of the Note “_______, 20____”]. The cost of each such CNA report may be paid from the Reserve
for Replacement.
6. In cases where a Residual Receipts account is required (as referenced in the Regulatory
Agreement), Lender shall deposit or place in a depository satisfactory to Lender, in accordance
with Program Obligations, all funds received from Borrower for deposit therein. The Residual
Receipts account shall be subject to the control of Lender, and withdrawals may be made only
with the prior written approval of HUD (unless otherwise authorized by Program Obligations).
These funds shall be held in an interest-bearing account which shall be insured or guaranteed by
a federal agency and in accordance with Program Obligations. Lender agrees to notify HUD in
writing of any non-compliance with Program Obligations with respect to such Residual Receipts
account immediately when known to Lender.
7. Lender submits separately the appropriate financing statement(s) covering all of the Mortgaged
Property that, under applicable law, may be subject to a security interest under the Uniform
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Commercial Code (“UCC”), whether acquired now or in the future, and all products and cash
proceeds and non-cash proceeds thereof (“UCC Collateral”).
8. Lender submits separately a UCC search report conducted by ____________ [must be the title
insurance company, a reputable UCC search firm, counsel to Borrower or another licensed
attorney] dated, _______ [must be dated no earlier than 30 days before this Certificate] of the
appropriate UCC filing office(s) indicating that no UCC filings have been made against Borrower,
the Project or the Project Assets, unless approved in writing by HUD.
9. The Security Instrument and the Uniform Commercial Code Financing Statement filings, along
with any other documents or means required by State law, establish a perfected first lien security
interest under the Uniform Commercial Code in the UCC Collateral in favor of Lender. Lender
shall maintain a perfected first lien position in the UCC Collateral for the life of the Loan.
10. Lender shall: (a) obtain the prior written approval and/or consent of HUD in those instances
required in the Security Instrument; (b) furnish HUD with all pleadings, reports and data in those
instances required in the Security Instrument, including but not limited to the physical inspection
report of the Mortgaged Property, except for physical inspections performed by HUD or on behalf
of HUD, and financial reporting data; and (c) furnish HUD with a copy of any application by Lender
for the appointment of a receiver pursuant to the Security Instrument and all related pleadings.
D. FEES, CHARGES AND FINANCING TERMS
1. The term “Financing Charge” as used herein means any charge, direct or indirect, for supplying
the Loan to Borrower or servicing the Loan for HUD, Ginnie Mae, a third-party investor or Lender’s
own account.
2. The financing charges enumerated on a separate schedule prepared by Lender are attached
hereto as Exhibit ___. The charges have been (i) collected in cash or will be so collected not later
than the date of Initial Endorsement; (ii) will be disbursed from Loan proceeds; or (iii) will be
collected or disbursed as otherwise set forth in Program Obligations.
3. No financing charges other than charges disclosed herein have been made, and none shall be
made. Until Final Endorsement for insurance by HUD, all funds collected pursuant to items (d),
(e), or (f) below and not paid over to the permanent Lender, plus any funds returned by the
permanent Lender, shall be held for the account of Borrower and shall be subject to HUD’s control
and direction in the event of a claim under the Contract of Insurance.
[Lender check and complete the following applicable subsections]
□ (a) Lender has not imposed and shall not impose a financing charge of any kind directly or
indirectly, other than the initial service charge.
□ (b) Lender has imposed an initial service charge in the amount of $_______.

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□ (c) Lender has collected in the form of [cash OR letter of credit] the amount of
$_____________ as a discount or financing charge for the construction loan.
□ (d) Lender has collected in the form of [cash OR letter of credit] the amount of
$_________________ to pay construction loan extension fees. In an attached addendum
(Exhibit _____), Lender has identified the time frames in which the extension fees must be
paid and the parties liable for payment of such extension fees.
□ (e) Lender intends to retain the permanent loan and has collected a permanent placement fee
of $______________. In addition to the initial service charge and permanent placement fee,
Lender has collected in the form of [cash OR letter of credit] the amount of $____________ as
a discount or financing charge for the permanent loan.
□ (e) Lender has a firm commitment from __________________________ to purchase the Loan
when fully disbursed and fully insured at a financing charge or discount of _ __ percent, and
Lender has collected in the form of [cash OR letter of credit] the amount of $___________ for
payment of said charge or discount.
□ (f) This Project shall be financed with [tax-exempt OR taxable] bonds. Therefore, Lender has
collected in the form of [cash OR letter of credit] the amount of $___________ and has
distributed or shall distribute from Loan proceeds the amount of $______________ to cover
the costs of issuance. A statement is attached as Exhibit ___ itemizing these costs with an
explanation of the necessity of each cost and the source of the funds.
□ (g) The Loan is a unitary loan under which Lender intends to retain the Loan for both the
construction and permanent loan terms. Lender has collected a unitary loan placement fee of
$___________. In addition to the initial service charge and the unitary loan placement fee,
Lender has collected in the form of [cash OR letter of credit] the amount of $_________ as a
discount or financing charge for the unitary loan.
□ (h) Additional financing charges or discount of $_____________ are to be collected under
Exhibit ____ attached hereto for the purpose shown in (c), (d), (e), (f), or (g). [Strike
inapplicable letters.] The arrangement for the collection of additional financing charges or
discount shall follow Program Obligations and use forms prescribed by HUD.
□ (i) The Loan to be made to Borrower shall be financed through funds being provided by a thirdparty investor through the issuance to the investor of construction and permanent participation
certificates pursuant to a participation agreement between Lender and the investor, with
respect to which agreement Lender has agreed to repay the investor at a stated interest rate
according to a fixed payment schedule.
□ (j) The Loan to be made to Borrower shall be financed through funds being provided by a thirdparty investor through the issuance to the investor of construction and permanent fully
modified, pass-through, mortgage-backed securities, guaranteed as to principal and interest by
Ginnie Mae.
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□ (k) The Note rate includes a servicing fee payable to Lender monthly during the life of the Loan
(“Servicing Fees”). In addition, the Lender may impose reasonable and customary
administrative fees and charges (including but not limited to, reimbursements for out-of-pocket
expenses) for handling and investing the cash held in the Reserve for Replacement, the
Residual Receipts account, if applicable, and any other interest-bearing escrows related to the
Project and for processing, reviewing and approving other matters (“Administrative Fees”),
as more fully set forth in Program Obligations. Borrower is entitled to earn interest on the
Reserve for Replacement and Residual Receipts accounts, as more fully set forth in Program
Obligations. Lender shall not invest escrow account monies in interest-bearing accounts
unless interest earned is added to and included in the relevant escrow account, and unless the
net income is paid or credited to the account of Borrower. Net income is defined as the
earnings remaining after the following expenses are deducted: (i) any Servicing Fees, and (ii)
any Administrative Fees.
4. Except for (i) Loan advances made in accordance with Program Obligations, (ii) notes executed
pursuant to Section D(3)(h) above, or (iii) Lender advances made pursuant to the Security
Instrument, Lender does not have outstanding and shall not make loans or advances to Borrower,
any of the sponsors, the general contractor, or the architect for any purpose connected directly or
indirectly with the Project without prior written approval of HUD; and Lender has not made or
offered, and shall not make or offer, any guarantees, pledges, reservations of sums to become
due or other inducements to any entity or person to make loans or advances that Lender would
be prohibited from making under the terms of this paragraph.
5. Lender has not made and shall not make payment of any kickback or fee or other consideration,
directly or indirectly, to any person who has received payment or other consideration from any
other person in connection with this Loan transaction, including the purchase or sale of the
Mortgaged Property, except for HUD-approved compensation paid or to be paid, if any, for the
actual performance of services.
6. If a letter of credit has been accepted instead of cash, (a) such letter of credit shall be
unconditional and irrevocable and be issued in accordance with Program Obligations by (1)
another banking institution; or (2) Lender, with HUD’s written permission prior to initial
endorsement; and (b) Lender has not made and shall not make any inducements as described in
Section D(4) above to procure issuance of such letters of credit. If demand under the letter of
credit is not immediately met, Lender shall forthwith provide cash equivalent to the undrawn
balance thereunder without recourse to Borrower and without regard to Lender’s ability to recover
such amount from any other entity or person who securitized the letter of credit.
7.

(a) For Loans funded with the proceeds of state or local bonds, Ginnie Mae mortgage-backed
securities, other bond obligations as defined by HUD, any of which contain a prepayment lock-out
and/or prepayment premium provision, in the event of a default during the term of the prepayment
lock-out and/or prepayment premium (i.e., prior to the date on which prepayments may be made
with a prepayment premium of one percent or less), Lender shall follow those procedures set
forth in Program Obligations; (b) after commencement of amortization, Lender shall notify HUD of
the delinquency when a payment is not received by the tenth (10th) day of the month in which it is
due.
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8. Lender has committed to provide the Loan subject to:
□ (a) Prepayment Provision: Prepayment of the Note is subject to the following: [list prepayment
provisions/penalty OR N/A if there are no prepayment penalties in the Note].
□ (b) Extension Provision: [list date for delivery of mortgage loan and terms and fees associated
with extension provisions OR list “N/A” if there is no delivery date or extension fee.]
E. OTHER LENDER OBLIGATIONS
1. If Borrower defaults in its obligations to (i) complete construction of the Improvements, or (ii) to
complete substantial rehabilitation to the Improvements on the Mortgaged Property, Lender has
the right, transferable to HUD, to (i) complete the Improvements as provided in the Building Loan
Agreement, or (ii) to complete any substantial rehabilitation to the Improvements. In the event
completion of the Improvements or completion of substantial rehabilitation to the Improvements is
undertaken by either Lender or by HUD, the undisbursed balance of the Loan may be advanced
for this purpose and to discharge any valid liens or claims against the Mortgaged Property. Such
advances shall be considered as made for the account of Borrower and shall be covered by the
terms of the Security Instrument and the Contract of Insurance.
2. So long as the Contractor or Borrower, or, upon default, the Contractor’s surety or any other
person authorized to act on behalf of or in substitution for any of them shall be willing and able to
complete construction or substantial rehabilitation of the Improvements, Lender, upon HUD’s
request, shall advance up to the undisbursed balance of the Loan and shall authorize release of
any grant or loan proceeds or other funds available under Section C.1 above for that purpose.
The term “Contractor” as used above, means any person, corporation or other entity contracting
directly with Borrower for the construction of all or any portion of the Improvements.
3. The following are the only identities of interest, as defined in Program Obligations, between
Lender and Borrower, any Principal of Borrower, Contractor, any subcontractor, or the seller of the
land: ___________________________________________________.
4. Lender shall disclose to HUD any future identities of interest, as defined in Program Obligations,
during the construction period or prior to final endorsement.
5. No Identity of Interest, as defined in Program Obligations, exists between Lender and the counsel
to Borrower and that no portion of the amounts included in the Loan for Borrower’s attorneys has
been paid to Lender or its employees.
6. All funds, escrows, and deposits specified in this Certificate and any and all other funds held by or
at the order of Lender in connection with the Loan transaction covered by this Certificate shall be
funds held pursuant to Program Obligations and any applicable escrow agreements.
7. For any case involving materials stored off-site, Lender shall:
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(a) File Financing Statements (UCC-1), in the proper jurisdiction with the proper office;
(b) Make whatever additional filings are necessary to maintain a first lien on the materials
until they are incorporated into the Improvements;
(c) Release the Financing Statement filings as appropriate;
(d) Unconditionally certify by letter to HUD with each disbursement request that the
Security Instrument(s) is (are) a “first lien” on such building materials covered by the
Instrument(s). This certification shall be supported by an opinion from Lender’s legal
counsel;
(e) In the event of default under the Security Instrument, either assign Lender’s security
interest to HUD or acquire title through foreclosure to the materials intended for use or
incorporation into the building(s) and convey title to HUD; and
(f) Require a performance bond and payment bond each in an amount equal to 100
percent of the construction contract be used to satisfy the assurance of completion
requirements.
8. All HUD form closing documents submitted to HUD in connection with this transaction (with the
exception of the Opinion by Counsel to Borrower and the accompanying Certification by Borrower)
conform to those documents Lender obtained from HUD and such documents have not been
changed or modified in any manner except as specifically identified and approved by HUD as
evidenced by the attached Exhibit ____. It is understood that changes and modifications do not
include filling in blanks, attaching exhibits or riders, striking through inapplicable provisions,
deleting bracketed provisions as contemplated by the terms of the documents, or making changes
authorized by Program Obligations.
9. If closing with electronic documents, Lender agrees to provide HUD with electronic copies of the
executed closing documents post-closing that conform in all respects to the electronic versions
delivered to and accepted by HUD at the closing of the Loan and will include a certification of such
conformance that includes the same warning language found in this Certificate with its electronic
submission to HUD.
10. Based upon Lender’s reasonable due diligence and as set forth in Exhibit ___(a) as of the date
hereof, the Borrower has obtained, or caused to be obtained all necessary certificates, permits,
licenses, qualifications, authorizations, consents, and approvals from all necessary
Governmental Authorities to own and operate the Mortgaged Property, and to carry out all of the
transactions required by the Loan Documents, and to comply with all applicable federal statutes
and regulations of HUD in effect on the date of the Firm Commitment, except for those, if any,
which customarily would be obtained at a later date, at an appropriate stage of construction or
completion thereof; and (b) appropriate actions have been taken by and necessary filings have
been made with those Governmental Authorities, all as disclosed by Borrower.

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11. Lender has made reasonable inquiry and has discovered no liens or encumbrances against the
Mortgaged Property that are not reflected as exceptions to coverage in the title policy.
12. Lender has consented to all secondary financing liens or encumbrances against the Property
(including Section 241 loans), if any.
13. Lender (i) shall notify HUD in writing immediately upon learning of any Violation of the
Regulatory Agreement by Borrower, (ii) shall treat Violations under the terms of the Regulatory
Agreement as a default under the Security Instrument when HUD instructs Lender to do so; and
(iii) shall, following a Declaration of Default by HUD under the Regulatory Agreement and upon
the direction of HUD, declare the entire Indebtedness to be due and payable.
14. Lender shall promptly review any Borrower’s request to transfer the Project and shall not
unreasonably withhold Lender’s approval of the transfer. If HUD approves the transfer, Lender
shall execute a release and assumption agreement or a security instrument modification
agreement incorporating any new Regulatory Agreement in the existing Security Instrument. It
is understood that Lender’s consent to the transfer shall in no way prejudice Lender’s rights
under the Contract of Insurance with HUD.
15. Lender shall (a) require Borrower to keep the Mortgaged Property insured at all times against
such hazards as Lender and HUD may from time to time require and as set forth in the Security
Instrument, and (b) notify HUD of any known payments made by an insurer. All insurance
policies on the Project comply with the terms of the Security Instrument, and where applicable,
those insurance policies have attached thereto a standard mortgagee clause making the loss
payable to HUD and Lender, as its interest may appear, and where applicable, HUD and Lender
are shown as an additional insured. If Lender determined that any of the Improvements are
located in an area identified by the Federal Emergency Management Agency (or any successor
to that agency) as an area having special flood hazards, or when flood insurance is otherwise
determined necessary by HUD consistent with Program Obligations and required by the Firm
Commitment, Lender shall collect from the insurance company providing flood insurance, an
insurance certificate evidencing flood insurance, dated as of_______.
16. The Loan does not violate the usury laws or laws regulating the use or forbearance of money of
the Property Jurisdiction.
17. If the Security Instrument is assigned to HUD under the Contract of Insurance, HUD shall not be
bound by the requirements of this Certificate.
18. If there is a sale or transfer of all or a partial interest in the Note (other than a sale or transfer of
a participation or other beneficial interest, e.g., a transfer of any interest of a Ginnie Mae MBS
Security, or the creation of a security interest) or a change of the loan servicer, Lender shall be
responsible for ensuring that Borrower is given Notice of the sale, transfer and/or change.

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[Add this Section if the Project will be partially financed by cash-collateralized, tax-exempt bonds. This Section
may be modified for similarly structured transactions that use tax-exempt loans in lieu of tax-exempt bonds, as
approved by the HUD Closing Attorney.]

F. 4% Low Income Housing Tax Credit & Tax-Exempt Bonds
1. The financing for this Project includes the issuance of tax-exempt, cash-collateralized bonds
(the “Bonds”) by [insert state agency issuing bonds]
___________________________________________. As set forth in the draft bond loan
agreement and draft bond trust indenture [modify bond loan document titles as needed] (the
“Bond Documents”), the bond structure requires the Lender to deliver funds to the bond
trustee for deposit into the bond “Collateral Fund”. The Bond Documents also govern the
funding and use of funds contained in the “Project Fund” and the “Bond Fund”.
2. Lender agree for purposes of this Section F only that:
a. “HUD-Insured Loan Funds” means funds delivered to the Borrower (or Borrower’s
designee, such as the contractor but never the bond trustee) by the Lender pursuant to
HUD form HUD-92403 Application for Insurance of Advance of Mortgage Proceeds.
b. Funds do not become HUD-Insured Loan Funds unless, and until, such funds are
disbursed directly to the Borrower (or Borrower’s designee, which may not be the bond
trustee or any related party); and
c. “Lender Funds” means: funds in the Lender’s control, whether from Lender’s own
account or from Lender’s warehouse bank line of credit or other funding source.
3. All funds delivered by Lender to the bond trustee for deposit into the Collateral Fund shall be
Lender Funds, and shall not be subject to payment under a mortgage insurance claim;
4. HUD-Insured Loan Funds shall not be sent to the bond trustee or deposited in the Collateral
Fund, Project Fund, Bond Fund, or any other funds or accounts established through the Bond
Documents to facilitate issuance of the Bonds; and
5. Lender Funds are not insured by HUD and are used at the Lender’s own risk; Lender Funds do
not become HUD-Insured Loan Funds until direct disbursement to the Borrower (or Borrower’s
designee).

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{The following statement must appear on the same page as the executed signature block for the
Lender.}
The signatory below certifies that all of the information provided in this Certificate and in any
accompanying documentation is true, accurate, and complete, has been made, presented, and
delivered for the purpose of influencing an official action of HUD, and may be relied upon by HUD as
a true statement of the facts contained therein. The signatory acknowledges that the submission of
any false, fictitious, or fraudulent statement, representation, or certification in this Certificate or on any
accompanying documents may result in criminal, civil, and/or administrative sanctions, including
fines, penalties, and/or imprisonment under applicable federal law.
Lender:

By

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Previous editions are obsolete

Lender’s Certificate

HUD-92434M