May/June 2012

HUD’s Multifamily Rental Project Closing Documents

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HUD’s Multifamily Rental Project Closing Documents

In 2011, the Department of Housing and Urban Development (HUD) revised its Federal Housing Administration (FHA) multifamily closing documents in recognition of modern commercial real estate legal structures (such as changes in the forms of asset ownership), to reduce the FHA’s bad loan risks and improve the efficient management of FHA programs by placing new obligations on lenders to perform more of the due diligence required for loan underwriting that was formerly performed by the FHA, and to require borrowers to recognize their responsibility for managing project operations in manner that prevents waste, fraud, and abuse.

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