HUD Pre-Construction Conference

1
HUD Pre-Construction Conference
Insured Section 202/811 Projects
HUD Procedures Forms available on the Internet
http//www.hud.gov/offices/hsg/mfh/map/mapguide/ma
pguide.cfm
http//www.hudclips.org
2
Purpose

• The HUD Pre-Construction Conference is required
  before the start of construction on every HUD
  project. The purposes of this conference are to
• review contractual roles and responsibilities
• review HUD construction administration policies,
  requirements, procedures forms
• In order to to assist the architect administer
  construction and the contractor complete
  construction on time, within budget and to the
  specified quality.

Agenda
Part I
Part III

• Contractual Roles Responsibilities
• Construction Period Overview
• HUD Inspector HUD Trip Reports
• Change Orders
• Payment Requests

• Pre-Occupancy Conference
• Permission To Occupy
• Easily Movable Non-Realty Items
• Pre-Cost Certification Conference
• 100 Final Completion
• Guarantee Inspections
• Completion of the Work

Part II
3
Contractual Roles Responsibilities
4
Contractual Roles Responsibilities
The following contract documents form the
foundation for defining the Owner, Architect and
Contractors roles and responsibilities during
construction

• Owner- Architect Agreement AIA B181 with HUD
  Amendment
• HUD Construction Contract (Cost Plus or Lump Sum)
• General Conditions AIA A201

These documents emphasize that, during
construction

• The Architect is solely responsible for the
  Administration of the Construction Contract.
• The Architect is the only member of the
  development team with the authority to instruct
  the Contractor. Formal communications between
  Owner and Contractor must be through the
  Architect (AIA A201 GC Article 4.2.4).

Architect Administrator of the Construction
Contract
Contractor
Owner
5
Roles Responsibilities
Architect

• The Architect is in a key leadership position.
  The Owner and Contractor rely on the Architect
  for decisions, administration and documentation
  as the Administrator of the Construction
  Contract.
• The Architect shall interpret and decide matters
  concerning performance of the Owner and
  Contractor under requirements of the Contract
  Documents(Article 2.5.14, AIA B181)
• The Architect will interpret and decide matters
  concerning performance under, and requirements
  of, the Contract Documents (Article 4.2.1
  Administration of the Contract, AIA A201 GC)
• The Architect is a representative of the Owner
  and has authority to act on behalf of the Owner
  in their duties as Architect and administrator.
• The Architect shall be a representative of and
  shall advise and consult with the Owner The
  Architect shall have the authority to act on
  behalf of the OwnerInstructions to the
  Contractor shall be forwarded through the
  Architect. (Article 2.5.4 of AIA B181)
• The Architect will provide administration of the
  Contract as described in the Contract Documents,
  and will be an Owners Representative (1) during
  construction, . The Architect will have
  authority to act on behalf of the Owner
  (Article 4.2.1 Administration of the Contract,
  AIA A201 GC)
• The Architect must instruct the Contractor in
  writing through the use of appropriate
  administrative tools. For changes to the work,
  ASI or Change Orders are to be used to instruct
  the Contractor, rather than verbal instruction or
  inappropriate use of RFI responses.

6
Roles Responsibilities
Architect

• The Architect (and their consultants) must guard
  against defects and deficiencies in the
  construction while performing their duties as the
  Administrator of the Construction Contract
  (Article 4.2.2, AIA A201 GC).
• The Architect (and their consultants) must
  clarify and interpret the contract documents for
  strict compliance to ensure that construction
  is carried out in accordance with these
  documents.
• The Architect (and their consultants) must
  restrict materials, products and equipment to
  those specified. Restrict all deviations to
  those substantially consistent with the original
  design concept including form, color and texture.
  Restrict substitution of items of a different
  design or size from those specified to those that
  are equivalent in utility (durability, quality
  and ease of maintenance). Restrict substitution
  of any material differing in composition or
  appearance from the one specified to one which is
  equivalent in its attributes (i.e. character,
  quality, durability and ease of maintenance).
• The Architect must review the Contractors
  monthly pay requisition for work in place and
  compare the cost of the work and materials with
  the cost to complete the project so as not to
  overpay at any time during construction (see
  slide/page 51 re stored materials).
• Architect is required to visit the site two (2)
  times per month for Section 202/811 projects. For
  insured projects, the Architect visits the site
  as appropriate to the progress of the work.

7
Roles Responsibilities
Architect

• The Architect must maintain an up-to-date
  Architects Log on-site that is readily
  available (can use Internet) to the Owner and HUD
  Inspector. Architects Log must include the
  Architects assessment of the progress of the
  work and a record of the actions taken to insure
  that the work in being accomplished per the
  contract documents. Include the following in the
  Architects Log
• Architects Field Reports (AIA G711)
  Consultants Field Reports.
• Meeting Notes (if separate from the Field Report)
  Architect to run draw meetings. (Contractor
  likely will do their own meeting notes)
• Architects Logs - Proposal Requests (PR),
  Architect Supplemental Instructions (ASI)
  Change Order (CO) logs (see next page).
• Copy of the HUD Preconstruction Conference
  handouts for reference during construction.
• The minimum information required in the
  Architects Field Reports (MAP 13.4, E.2)
  include
• Date of Inspection
• HUD Project name, number and its location
• Time, weather and temperature range
• Estimated of completion
• Work in progress conformance (or not) with
  contractors progress schedule.
• Persons present/trades working
• Observations and items to verify.
• Information or actions required by Architect or
  others.
• Provide two (2) copies of each Field Report, ASI
  and Log (PR, ASI CO) to the HUD Inspector,
  on-site.

8
Architect
Tools for Administration - Logs
Architects Logs
Contractors Logs

• Request for Information (RFI) - if not relying on
  contractors log.
• Submittals
• Proposal Requests
• Architect Supplemental Instructions (ASI)
• Change Orders

• Request for Information (RFI)
• Submittals
• Change Order Requests

Review at meetings, prioritize items, architect
addresses response times by architect (including
their consultants) and by contractor. (No
copies needed by HUD).
Submittals Log
Submittals Log
Contractors RFI Log
Architects RFI Log
(Architect to provide two (2) copies of each of
these logs to HUD Inspector each month at pay
draw meeting). Review at meetings, architect
provides administration and documentation for all
changes - written instructions for all changes,
submission of complete change orders and payment
approvals once work is complete (92464).
Contractors COR Log (proposed changes)
Architects PR Log (proposed changes)
ASI Log
Change Order Log
9
Roles Responsibilities
Contractor

• The Construction Contract establishes the
  Contractors responsibility for building the
  project in strict accordance with the Contract
  Documents plans, specifications, AIA A201
  General Conditions, and in compliance with the
  Supplementary Conditions to Construction
  Contract HUD 2554 which establishes the Labor
  standards and Equal Opportunity requirements.
• The Contractors formal communications to Owner
  must be through the Architect.
• Contractor is required to maintain a progress
  schedule on the job site. Provide copy of
  schedule and updates to the Owner, Architect and
  HUD Inspector. Provide Construction Start Letter
  to HUD Inspector note date of initial start
  (when mobilized on site) and permanent start date
  (when something - pipe, footing, etc. are
  permanently placed in the ground). Note The HUD
  Closing is the Notice To Proceed.
• Contractor is required to maintain accurate
  records of all changes in the work in Record
  Documents, including but not limited to the
  location of underground utility lines which are
  to be recorded on the Final Survey.
• Provide a work area on-site for the HUD Inspector
  with access to phone fax. Provide a meeting
  space on site/in trailer large enough to
  facilitate productive progress and pay draw
  meetings - room for a table and chairs for
  example.

10
Roles Responsibilities
Contractor

• The Contractors job set of the Contract
  Documents used to build the project must be the
  same as the HUD Master Set signed at Initial
  Endorsement/Closing (including all local plan
  check comments and approvals which is the
  Architects responsibility).
• To avoid any confusion with an earlier versions
  or local permit set, this job set should be
  signed and initialed at the Initial
  Endorsement/Closing and kept on-site during
  construction.

Mortgagor
Architect
Contractors Job Set of Plans
Contractor
Spec
Bonding Co.
Signature Block
Supervisory Architect
11
Labor Requirements per Supplementary Conditions
to Construction Contract HUD 2554
Contractor Labor Requirements
www.hud.gov/offices/olr/
If Applicable

• Contractor must certify payrolls for compliance
  with Davis-Bacon wage rates with each pay draw
  request prompt and proper record keeping
  required.
• Sanctions will be imposed if not in compliance.
• Wage Decision (available at www.wdol.gov) and HUD
  2554 (in spec.) must be made part of all
  subcontracts.
• Wage Decision and Notice to Employees (WH-1321)
  must be conspicuously posted on job site
  outside of trailer. (One source of posters is
  www.fwlli.com)
• Inform employees and subcontractors employees of
  HUD Inspectors wage interviews purpose, intent
  to facilitate timely cooperation.
• HUD contact for Labor requirements and where to
  submit certified payrolls for review Carol
  Clark [phone]
• US Department of HUD
• Labor Relations Division, 9SL
• 450 Golden Gate Ave. POB 36003
• San Francisco, CA. 94102-3448

12
Labor Requirements
HUD Inspector Instructions
Information is kept Confidential

• HUD Inspector verifies that Wage Decision, Notice
  to Employees (WH-1321), EEO Posters and Logos are
  conspicuously posted on job site outside of
  trailer.
• Conducts Wage Interviews with labor from each
  trade, complete HUD 11 Form and submit with Trip
  Report. Reports any violations to HUD on HUD 11
  Form.

13
FHEO Requirements Supplementary Conditions to
Construction Contract HUD 2554
FHEO Requirements

• Owner required to follow Fair Housing
  requirements regarding marketing and outreach
  (AFHM Plan HUD935.5). Contractor is required to
  post the Equal Employment Opportunity Poster on
  site.
• Contractor (and subcontractors) must comply with
  Executive Order 11246 nondiscrimination in
  employment. See SEC 301 www.dol.gov/dol/public/re
  gs/statutes/ofccp/eo11246.htm
• Contractor must post the Equal Opportunity Logo
  on site.
• Project sign is required to include the Equal
  Opportunity Logo.
• Contact for more information and copies of
  posters or logos
• CA NV HAWAII
• Jeff Jackson
• US Department of HUD
• FHEO Program Operations Division
• 450 Golden Gate Ave. POB 36003
• San Francisco, CA. 94102-3448
• [phone]

Jelani Madaraka US Department of HUD,
FHEO Branch 500 Ala Moana Blvd, Suite
3A Honolulu, HI 96813-4918 [phone]
x-269
14
Roles Responsibilities
Owner

• During construction the Owner must be able to
  make timely decisions regarding construction
  issues (payment of approved requests, change
  order proposals, construction delays, etc.) to
  their Architect, who instructs the Contractor as
  appropriate.  
• The contract documents require the Owner to
  designate an Owners Representative during
  construction. This individual must have the
  authority to make decisions and bind the Owner
  contractually and/or fiscally - signing change
  orders and payment requests for example.

• The Owner shall designate a representative
  authorized to act on the Owners behalf with
  respect to the Project. shall render
  decisionsin a timely manner (Article 4.2, AIA
  B181)
•   The Owner shall designate in writing a
  representative who shall have express authority
  to bind the Owner with respect to all matters
  requiring the Owners approval or authorization
  Except as otherwise provided in Subparagraph
  4.2.1 the Architect does not have such
  authority. (Article 2.1.1 of AIA A201 GC).

15
Roles Responsibilities
Owner

• This authority to make decisions and bind the
  Owner contractually and/or fiscally may not be
  delegated to a consultant, or to the Architect.
  Rather, only the Owner, or their Representative
  (someone employed by the ownership entity with
  legal authority to sign and bind the Owner as
  necessary during construction) must have this
  authority. This Owners Representative is
  required to attend the monthly progress/draw
  meetings on-site, so as to facilitate timely
  decision making - essential to construction
  progress.

• Construction Progress Meetings. the
  contractor, owner, supervisory architect and HUD
  Inspector are required to attend monthly job
  meetings. The meetings at the job site when
  monthly requests for advances are prepared. The
  owners representative must be a member of the
  mortgage entity, usually a general partner.
  Nonprofit organizations may be represented by a
  member of the board of directors. (HUD Handbook
  4460.1 Chapter 3, Section 3-3, Item E and E.1).

16
Owner
Roles Responsibilities

• Should the Owner request additional Project
  Representation on-site during construction, then
  a contract with the Architect using an edited AIA
  B352 - to clearly define the Project
  Representative's role, responsibilities and
  authority during construction - and an Identity
  of Interest disclosure statement (HUD Form) must
  be submitted to HUD for review and approval (see
  HUD Memo on this subject dated 8/5/03).
• Should the Owner wish to hire a Consultant to
  assist them during construction, (this is not
  recommended given the HUD required contracts)
  then the proposed consultant contract must be
  submitted to HUD for review and approval, to
  ensure the consultants role and responsibilities
  do not involve any administration of the
  construction contract, and do not conflict with
  those of the Owner, Architect or Contractor as
  defined by the HUD required contracts - AIA B181
  with HUD amendment, HUD Construction Contract,
  and AIA A 201 General Conditions.

17
Roles Responsibilities
Owner

• The Owner is required to review the requests for
  payments, change order proposals, and other forms
  in a timely manner.
• Owner must keep their Lender informed and address
  their questions to their Lender as the Lender
  will assist the Owner during construction and
  throughout the life of the mortgage.
• Owner and/or Owner Rep.s formal communications
  to Contractor must be through the Architect (AIA
  A201 GC Article 4.2.4).
• Owner must escrow/set-aside funds for all changes
  (change orders Form 92437) to the work , and pay
  for these changes after approved by HUD,
  completed by Contractor and inspected by the
  Architect and HUD Inspector (Form 92464).
• Prepare for occupancy, and a smooth transition
  from construction to management and maintenance.
• The Owner must complete their Cost Certification
  and other close-out requirements in a timely
  manner so as not to unduly delay Contractors
  release of retainage.

18
Roles Responsibilities
Lender (Insured Projects)

• Lender controls the project funds -their
  involvement and approvals are essential. Lender
  works closely with the HUD Mortgage Credit
  Examiner. Lender disburses payments.
• Lender assists Owner complete all HUD forms
  including payment requests. On Advance of
  Mortgage Proceeds (Draws), Lender reviews and
  approves payments (except the first and last
  draws, done at initial and final closing, also
  approved by HUD). Lender reviews, and forwards to
  HUD for approval the Requests for Advance of
  Escrowed Funds (92464) for payment of completed
  work on approved change orders, off-site work, or
  demolition.
• Lender reviews all Change Order requests (and CO
  payment forms 92464) to assure funds are
  available and/or escrowed to cover cost of
  changes submitted to HUD for approval. Lender
  reviews Time Extension Change Orders for
  potential impact on loan and fees. Confirms that
  Consent of Surety is complete and made out to
  Lender since Bond is made to the Lender.
• Lender coordinates proper flow of documents and
  communication, distributes copies of approved
  documents once approved by HUD to Owner and
  development team as appropriate. Reviews Builders
  and Owners Insurance coverages to assure they
  are appropriate and valid. Assists Owner and
  Contractor in completing their Cost Certification
  and other requirements for Final Closing.

19
Roles Responsibilities
HUD Inspector
HUD Contract Inspector

• HUD Inspector is required to visit the site twice
  (2) per month.One visit will coincide with the
  Pay Draw / Progress Meeting. HUD Inspector has
  the authority to adjust Pay Requests.
• HUD inspector will document their visit and
  evaluation of the Architect and Contractors
  performance in writing on the HUD Trip Report
  Form 95379.
• Inspector will email copies of their Trip Reports
  to Owner, Architect, Contractor, Lender, HUD.
• Inspector will report out verbally at the Pay
  Draw Meeting on their findings and evaluation.
• Inspector will conduct confidential wage rate
  interviews with labor on site. This requires
  cooperation by the Contractor to inform labor of
  the purpose and intent of these interviews.

HUD Trip Report Form 95379
20
Construction Period Overview
HUD Processing Periods and Milestones
Application Processing Period
Construction Period
Asset Management Period
Start or Pre-application
Firm Commitment
Closing Pre-construction Conf.
Occupancy (primary goal)
100 Final Completion
Management Warranty Inspections
Final Close
Construction Period Forms
Escrow Pay Draw Requests HUD Form 92448 HUD
Form 92464
List of Easily Movable Non-realty Items
Executed Closing Documents
HUD Inspector Trip Reports HUD Form 95379 HUD 11
Labor
Construction Change Orders HUD Form 92437 ASIs
Permission To Occupy HUD Form 92485
9 12 month Guarantee Inspections HUD
Form 95379
100 Final Trip Report HUD Form 95379
including Contract Documents
plans
Closing
Occupancy
spec.
Pre-Construction Conference MAP Chapter 13.2
Pre-Occupancy Conference MAP Chapter 13.14
Pre-Cost Certification Conference
MAP Chapter 14.6
21
Change Order Policies Instructions
22
Administration Documentation
Dependent upon Architects
RFI, ASI Change Orders
Timely documentation of clarifications,
interpretations, decisions changes.

• Architects Supplemental Instruction (ASI) AIA
  G710
• Minor changes
• (all structural changes are not minor)
• No Cost
• No Time

• Change Order (HUD Form 92437)
• Not Minor
• Cost Change
• Time Change

• Request For Information (RFI)
• NOT a change to the Contract Documents

or
Contractors RFI
Note HUD does not allow Change Order Directives
(ref AIA A201 GC) to be used. Cost Time must
be determined beforehand.
Note If contractor proceeds with change work
per ASI, then there is no cost, no time no
change order..
Architects Response
Architect monitor consultants responses to RFIs!

Void ASI if contractor responds with legitimate
cost or time impact to ASI and a Change Order
results.
PR or COR may lead to ASI or CO a
Change to CDs
NOT a Change to CDs
23
HUD Construction Change Policy
Administration
Scenarios for making changes in a timely manner
to keep pace with construction.
Scenario 1 Required/Ideal most changes follow
this approach.

Scope of the Change Proposal Request, or response
to contractors COR - may incl. Architect/engr.
sketches, etc. to define scope of change.
Cost/Time for Change Cost or Time impact of cost
determined as accepted by Architect. May
involve negotiation between Architect and
Contractor. Owner confirms funds in place (in
escrow or contingency)
Change Order Written Architect writes and
assembles complete Change Order (92437) and
submits to HUD Inspector. Changes to offsite and
demo work, submit on AIA Form not HUD Form.
Change Order Approved Owner, Lender HUD
approved CO.
Do Work Contractor completes the CO work
Payment Contractor gets paid for completed
CO work (92464)
Change Orders must be submitted in a timely
manner to HUD Inspector on-site (or Architect
/or Contractors pay will be reduced).
Note Now 99 done with the work of a change
order! Rest is just packaging, confirmation of
funds avail. approvals.
24
HUD Construction Change Policy
Administration
Scenarios for making changes in a timely manner
to keep pace with construction.
Scenario 2 HUD Flexibility if Architect
Contractor are organized and professional.

Change Order to HUD Inspector. HUD
Inspector receives complete CO while at site
draw or other visit. Reviews if complete and
technically acceptable (MAP 13.8, B.5) Not an
approval.
Scope of the Change Proposal Request, or response
to contractors COR - may incl. Architect/engr.
sketches, etc. to define scope of change.
Cost/Time for Change Cost or Time impact of cost
determined as accepted by Architect. May
involve negotiation between Architect and
Contractor. Owner confirms funds in place (in
escrow or contingency) signs CO.
Change Order Written Architect writes and
assembles complete Change Order submits to HUD
Inspector
Change Order Approved Owner, Lender HUD
approved CO.
Begin Work Contractor may begin CO work without
reduction to draw request that month.
Note HUD Inspector still records all
Noncompliant work until CO approved.
Scenario 3 HUD Verbal Approval/Emergency
Begin Work IF HUD CM approves, Contractor may
begin CO work without reduction to draw request
that month.

Scope of the Change Proposal Request, or response
to contractors COR - may incl. Architect/engr.
sketches, etc. to define scope of change.
Cost/Time for Change Cost or Time impact of cost
determined as accepted by Architect. May
involve negotiation between Architect and
Contractor. Owner confirms funds in place (in
escrow or contingency) signs CO.
Change Order Written Architect writes and
assembles complete Change Order ASAP (for next
draw meeting) to submit to HUD Inspector.
Change Order Approved Owner, Lender HUD
approved CO.
Change reviewed with HUD Inspector. HUD
Inspector reviews Scope, Cost/Time and Funds
then calls HUD Construction Manager for verbal
approval to proceed.
25
HUD Construction Change Policy
Administration
Scenarios for making changes in a timely manner
to keep pace with construction.
Scenario 4 Cost/Time or Funds Delay
Scope of the Change Proposal Request, or response
to contractors COR - may incl. Architect/engr.
sketches, etc. to define scope of change.
NO Cost/Time for Change Cost or Time impact of
change is NOT determined nor accepted by
Architect. Or Owner has NOT put funds
in place (in escrow or contingency) to pay for
change.
HOLD Contractor may NOT begin CO work. If do,
reduction will be made to pay draw requests until
CO approved by HUD.
but
Note This policy protects Contractor to assure
funds are in place to pay for changes, and Owner
to assure they do not overextend themselves by
approving changes for which they can not pay.
Scenario 5 Scope Delay

Scope of the Change NOT defined. Architect/engr.
Has not/can not define scope of change. Proposal
Request, or response to contractors COR can not
be completed.
NO Cost/Time for Change Therefore Cost or Time
impact of change can not be determined.
HOLD Contractor may NOT begin CO work since scope
is not defined. If proceed with any portion
before clearly/fully defined, then reduction will
be made to pay draw requests until CO approved by
HUD.
26
Architect Supplemental Instructions
AIA G710 (AIA A201 GC Article 7.4.1).

• Changes can only be made by either
• Architects Supplemental Instruction (ASI) AIA
  G710
• use only for minor changes, of no cost and/or no
  time.
• use for interpretations/clarifications of
  Contract Documents.
• use for directives to Contractor to correct
  non-compliances.
• use to accept specified equivalents.
• record other field orders that are not
  construction changes.
• must provide 2 copies of issued ASI to HUD
  Inspector.

Note If contractor proceeds with change work
per ASI, then there is no cost, no time no
change order period.
27
HUD Change Orders
Change Orders HUD 92437

• HUD Change Order Form 92437
• May not use Change Order to alter the intent of
  Contract Documents, lower quality or reduce value
  of the project.
• All changes must be accurately reported and
  accounted for (pursuant to US Criminal Code,
  Section 1010, Title 18, USC).
• All changes must be approved in writing by HUD
  before they are made (see HUD Construction Change
  Policy)
• Any change made without written formal approval,
  must be recorded as Non-compliance by HUD
  Inspector (affects pay draw), until Change Order
  is approved.

Architect Complete this Portion
28
Change Orders HUD 92437
Change Order Form Instructions
HUD Inspector completes worksheeton one copy
Put the Projects (not HUDs) Change Order up
here.

• List item if Necessity(N), Betterment (B) or
  Equivalent (E).
• Six (6) max group by type/trade.
• Put additive cost changes on separate CO, and
  deductive (credits) on another.
• Note here if item is a result of - error,
  omission or negligence.
• If requires more than one month/draw request for
  work to be completed, then list
  on separate/own Change Order easier for
  tracking release of escrow.

HUD Appraiser reviews changes that effect
marketability, value, income, maintenance
operating costs
HUD Inspector completes
HUD Inspector completes
List dollar amounts per item
List Amount Escrowed after first 5,000 in
changes (insured) or after contingency used up
(for Sub Rehab 202/811 Projects)
Total Cost incl. O P
For HUD use only
Owner
Lender
Architect Contractor ( Owner for Scenario 2)
sign before submitting to HUD Inspector.
Owner (Mortgagor) sign before sending to
Lender (or HUD Mortgage Credit Examiner for
202/811s).
29
Change Orders HUD 92437
Change Order Form Instructions
Four (4) originals, one (1) to HUD through Lender
(Lender)
1)
v
2)
Instructions

• Provide four (4) wet signed HUD Form 92437 with
  complete back-up materials
  HUD Inspector gets two (2)-
  passes one to HUD CM. Lender or 202/811Owner
  gets two (2) -passes one to HUD Mortgage Credit
  Examiner.
• Required back-up information includes
  Architects Letter of Justification, Architects
  revised CDs as needed to define scope of change,
  Contractors detailed cost breakdowns.
• Contractor can include general requirements,
  overhead, profit, tax liability, bond premium
  but only at same as on 2328. (No profit if
  BSPRA)
• Architect contract AIA B181 already covers
  Architect/Engineer fees for COs in Basic Services.

3)
4)
30
Change Orders HUD 92437
Change Order Form Instructions
7)
8)
Instructions

• Off-Sites NOT on HUD Form (use AIA form).
• If approved change not performed, must submit CO
  to delete the approved change.
• Time Extensions submit on separate CO, at same
  time as change causing the delay, record with
  Architect within 21 days of delay, with Consent
  of Surety. Delay must be beyond Contractors
  control.
• Owner pays for changes out of contingency or
  escrow account (depends on project type).
• Change Orders must be submitted in a timely
  manner to HUD Inspector on-site (or Architect
  /or Contractors pay will be reduced).

5)
6)
31
Architects Justification
Change Order Classifications

• Guide to Classifications of Changes
• Necessity
• Latent (hidden) conditions not defined by CDs.
• Changes in codes or ordinances after Closing.
• Architects/Engineers omissions.
• Damage to completed construction.
• Betterment
• Economically justified by increasing net income.
• Economically justified by reducing long-term
  maintenance and/or operating expenses.
• Equivalent
• Substitution if specified item is not available,
  and not minor (if is, use ASI), or proposed
  substitution reduces contract price.
  Substitutions must provide equal or better
  utility and performance.

This form is required only for Section 202/811
project Change Orders. For Insured projects
Architect must write a letter for each CO.
Architects Letter of Justification for change
must state, for each proposed change item, the
reason for the change, and if it is a Necessity,
Betterment or Equivalent. Architect ( Engineer
if appropriate) must state they have reviewed and
accepted Contractors proposed costs and/or time
requested.
32
Change Order Procedures
Change Orders HUD 92437

• HUD Mortgage Credit Portion
• Funding Changes
• The Owner on insured projects must Escrow funds
  before change order is approved, to pay for
  changes - when aggregated changes equal or
  exceed 5,000 in additional costs. Funds are
  released using HUD Form 92464.
• Nonprofit Owners on 202/811projects use their
  contingency funds from their Developers Fees
  (HUD-92403CA) to pay for additive change orders.
  Availability of funds must be monitored by Owner.
  When contingency is exhausted, Owner must set
  aside funds (put up funds in bank) to pay for
  changes.
• For insured Substantial Rehabilitation projects,
  changes may be paid from a Contingency Fund
  (HUD-92403) - but only for Necessary changes,
  not Betterments.

HUD Inspector Completes this Portion
HUD Mortgage Credit Completes this Portion
33
Change Orders HUD 92437
Change Order Form Instructions
Non-Profits and Cooperatives for Insured Projects
No cost 1
Cost 2
Credit 3
No Cost Change Order Non-Profit
Organization/Owner can check Box 1 to accept a
zero cost change order. Added () Cost Change
Order Once the contingency is spent, the
Non-Profit Organization/Owner must get Board
approval to take on increased financial
responsibility before checking Box 2 and
accepting an increased cost change order. Credit
(-) Change Order Non-Profit Organization/Owner
can check Box 3 to accept a credit.
34
Change Orders HUD 92437
Change Order Form Instructions
HUD Mortgage Credit Portion
Owners construction costs
HUD recognized change in construction costs
X
Y
Z total


A
B total
B
downgrade
If gt 10 of construction price
See previous slides
HUD Director of Project Management reviews
approves all Change Orders
HUD Construction Manager reviews approves all
Change Orders
35
Change Order Assembling Submitting a CO
Change Orders
Required Change Order Documents
Architects Change Order Log (use like a
transmittal, one per group of COs submitted)
1
Please assemble (in this order) for each change
order ( tab backup if multiple items included in
CO)
HUD Change Order Form 92437
2

• Architects Change Order Log submit with each
  group of CO submittals as a cover/transmittal.
• HUD Change Order Form 92437 (Note if an off-site
  change, then use AIA, not HUD change order form)
• Architects Letter of Justification or
  202/811 CO Justification Certification
  Checklist.
• Architects revised CDs to define scope of
  proposed change (Proposal Request, Sketch, etc.).
• Contractors Cost Breakdown of labor and
  materials (see another page for required LM
  breakdown).
• Consent of Surety - for Time Extension Requests
  (or if CO costs are gt10 of construction price).

Architects Letter of Justification or
Checklist Form
3
4
Architects Revised CDs to define scope
Contractors Cost Breakdown (labor
materials breakdown)
5
6
Consent of Surety If appropriate for Time
(always) or
Note Provide two (2) copies of each Change
Order to the HUD Inspector, on-site.
36
Contractors Labor Material Breakdown
Change Order Back-Up
General Contractor to provide on their
letterhead, a summary of their (or their
subcontractors) labor and material breakdown for
each Change Order item
LABOR
Hours
Total
Rate/Hour
Classification (ex. Carpenter, Electrician)
Forman
Journeyman
Apprentice
Laborer
Other
Labor Total
MATERIALS
Quantity
Total
Unit Cost
Item(s)
Total
Tax
Note Some minor change order items might be
accepted as a lump sum cost, if approved by HUD
Construction Manager in advance, on a
case-by-case basis.
Material Total
L M subtotal
Overhead Profit
Note O P may not exceed set on 2328/Schedule
of Values
Grand Total
Contractors Total Cost for Change Order
37
Consent of Surety
Change Orders Time Extension Requests
Change Orders for Time Extension Requests require
a Consent of Surety. At Initial Closing, the
Contractor must provide a surety bond by an
approved Surety Co. in an amount at least equal
to the value of the construction contract. The
consent of this Surety Co. for each time
extension (and additional cost change order if
greater than 10 of the construction cost) must
comply with the following requirements

• A separate Consent of Surety is required for each
  time extension request - no blanket consents for
  multiple time extension requests.
• Consent of Surety must be addressed to the Lender
  (for insured projects), to HUD (for Section
  202/811 projects).
• Consent of Surety must acknowledge and approve
  the extension of the contract time by both
  a) the number of whole calendar days, and
  
  b) the
  date to which the contract completion is
  extended.
• Consent of Surety must be signed by the
  Attorney-in-Fact for the Surety Co.
• Consent of Surety must be Notarized.
• Power of Attorney document must be attached to
  the Consent of Surety as evidence that the
  signature on the Consent of Surety is the Surety
  Companys Attorney-in-fact.
• Note If a Letter of Credit is provided in lieu
  of Bond (Lender and HUD Mortgage Credit Examiner
  inform the HUD Construction Manager HUD
  Inspector at the Preconstruction Conference),
  then Consent of Surety is not required.

38
Change Order Flow Diagram
Change Order Process Overview
Parallel Review Tracks

• Before submitting worksheet and one (1) copy of
  change order to HUD Construction Manager
• The HUD Inspector and Contract Manager are
  responsible for architectural and cost review.
  

Track 1 Architectural Technical review
Track 1
2 copies with back-up
signed worksheet
Architect writes Change Order, includes
Contractors back-up. Owner, Architect and
Contractor sign and submit change orders to HUD
Inspector in the field (not mailed) at
Progress/Draw Meetings. If the HUD Inspector
finds CO complete, then Inspector takes their two
copies Owner takes their two copies for funding
review (see below).
HUD Mortgage Credit Examiner (attention to Jackie
Perry)
Change Order
Track 2
2 copies with back-up
1 copy with back-up
Track 2 Financial Funding Review

• Before submitting one (1) signed copy to HUD
  Mortgage Credit (via Jackie Perry)
• Lender is responsible for financial and funding
  review (Insured projects).
• Owner is responsible for financial and funding
  review (Section 202/811projects).

Note Lender and Owner, please mail the one (1)
signed copy for HUD Mortgage Credit Examiner to
the attention of Jackie Perry, HUD Construction
Management Clerk.
39
Change Order Flow Diagram
Change Order
Process Overview Approved
CO Distribution
Email CO Spreadsheet
Lender
Spreadsheet
202/811 Owner
Architect
Contractor
HUD CM
HUD Mortgage Credit Examiner
HUD Inspector

• Scanned and Emailed , Mailed, or Faxed to Lender
  or 202/811 Owner
• One copy of completed HUD CO Form

202/811 Owner
Change Order
Section 202/811 Projects
Lender
Insured Projects
40
Change Order Flow Diagram
Change Order Process Proposing a Change
Revised CDs Architect issues Sketch, Change
Request, Bulletin or other document - to
define scope of proposed change(s) in detail.
Start
1
2
3
Contractor Response Contractor provides detailed
breakdown of additional cost and/or time of
proposed change(s) as described by Architect.
Change Proposed Owner, Architect or Contractor
may propose a change. Proposed change is
discussed with the HUD Inspector to get an idea
of whether the proposed change is a betterment,
necessity, equivalent, omission, etc.
Architects Supplemental Instruction (ASI) AIA
G710 Architect issues an ASI if no change in cost
and no change in time, i.e. the change is
Equivalent and minor.
if no cost/no time
or
Noncompliance Observed Noncompliance (NC) in the
work is observed by Architect or HUD Inspector.
NC is recorded in Architects Field Report or HUD
Trip Report.
Noncompliance Corrected Contractor provides the
work in accordance with contract documents.Not a
change.
Note Non-compliances affect payments and next
phase of work until corrected
41
Change Order Flow Diagram
Change Order Process Creating a
Change Order
4
5a
Review Cost/Time Owner, Architect and HUD
Inspector review Contractors quotations of
cost/time for the proposed change in scope. Owner
funds it.
Change Order Written Architect writes
Change Order and Justification (Letter) for each
proposed change Necessity, Betterment or
Equivalent (Note IF change is a result of
error/omission or negligence, state if by
Owner, Architect or Contractor). Use HUD Form
92437 for on-site changes. Off-site changes
do not use this HUD Form use an AIA form.
6

• Change Order Reviewed, Signed
• Concurrent with Progress Pay Draw meeting, the
  team reviews change orders with the HUD Inspector
  to make certain they are complete and conform to
  instructions including signatures by
• Contractor
• Architect
• Owner (Mortgagor)
• Owner then provides complete change orders to
• 1) HUD Inspector at the meeting.
• 2a) Mails to the Lender (if Insured)
• 2b) Mails direct to HUD Mortgage
• Credit Examiner (if 202/811)

Accepted
Time Extension full calendar
days, on separate CO. A revised schedule, NOAA
data (if weather delay- show impact to critical
path) Consent of Surety required. Must record
with Architect in 21 days of delay.
5b
Rejected
General Condition Costs, Overhead
Profit due to delay on separate CO.
5c
Note Now 99 done with the work of a change
order! Rest is just packaging, confirmation of
funds avail. approvals.
Track 1
Track 2
NOTE For 5b 5c any appropriate and requested
General Condition costs, Overhead and Profit
associated with a delay must be put on a separate
Change Order. This Cost Change Order and Time
Extension Change Order will be processed and
recorded, but drawn only when/if needed that
is, if Contractor exceeds the contract completion
date. Owner must set aside these funds (escrow)
or deduct from contingency to cover this approved
cost obligation.
42
Change Order Flow Diagram
Change Order Process HUD Contract Inspector
Review
Track 1 Architectural Technical Review

• HUD Inspector Review
• HUD Inspector reviews CO for technical
  acceptability (per MAP guide 13.8 thru 13.10
  and/or Handbooks 4460.1, 4435.01).
• Completes the Worksheet, initials and dates the
  CO worksheet copy only.
• Transmits worksheet and COs to inspectors
  Contract Manager for review.
• Inspector maintains Change Order Log copy of
  Change Order with back-up in Construction Record.

7a
8a
HUD Construction Manager HUD CM/GTM reviews the
HUD Contractors work and Change Order. Signs
worksheet copy. Forwards to HUD Mortgage Credit
Examiner. Sends review comments/Cover Sheet back
to Contract Manager. Jim Myers HUD Construction
Manager (CM) Gov. Technical Monitor (GTM) HUD San
Francisco Office [phone]

• HUDs Contractor Review
• By Contract Manager
• Reviews for completeness and performance of the
  HUD Inspectors work.
• Submits the following to the HUD Construction
  Manager/GTM
• a) cover sheet
• b) change order log
• c) Worksheet
• d) one (1) complete change order with back-up
  material

Track 1
Track 1
Track 1
43
Change Order Flow Diagram
Change Order Process Sponsor or Lender Review
Track 2 Financial Funding Review

• 202/811 Owner
• (Section 202/811 Projects)
• Reviews CO for cost impacts and ensures funds are
  available in contingency. If not, then must set
  aside funds to cover increased costs of CO.
• Reviews time extension requests for impact on
  project budget and occupancy.
• Owner submits one (1) complete change order to
  the HUD Mortgage Credit Examiner.

• Lender (Insured Projects)
• Reviews CO for cost impacts and ensures funds are
  available - in contingency or escrowed to cover
  increased costs of CO.
• Reviews time extension requests for impact on
  project budget, occupancy and income.
• Reviews CO for any impact on value.
• Lender signs CO and submits one (1) copy of
  complete change order to the HUD Mortgage Credit
  Examiner.
• (Reference MAP Guide 13.8, A 13.9, A. 3 b (4),
  13.10)

7b
8b
or
Track 2
Track 2
NOTE 2 Insured Projects If additive costs of
change orders is 5,000 or greater, then funds
must be Escrowed HUD-92464 (unless rehab
contingency)

• FUNDING NOTES
• NOTE 1 All Change Orders are paid by either
• NP Developers Fee Contingency (202/811
  Projects)
• Contingency Funded (Sub. Rehab.) HUD-92403
• Escrowed Funds - HUD 92464

NOTE 3 202/811Projects and/or Sub Rehab
(Insured) Once contingency is spent, then funds
must be set aside or escrowed to pay for changes
- HUD-92464.
44
Change Order Flow Diagram
Change Order Process Mortgage Credit Review
HUD Approval
Note Receipt of both Worksheet from HUD CM and
signed Change Order from Lender - initiates the
Mortgage Credit Examiners CO processing.
9
10
HUD Mortgage Credit Examiner Calculates
cumulative costs of executed change orders,
reviews source of funds to pay increase costs,
calculates impact on mortgage amount (per MAP
13.11). (Note See attached list of HUD
Mortgage Credit Examiners)
HUD Approval Signature Insured Projects HUD
Director of Project Management reviews all
insured project change orders for approval
signs original change order. Returns signed CO to
Mortgage Credit Examiner. Section 202/811
Projects Supervisory Project Manager reviews all
202/811project change orders for approval - signs
original. Returns signed CO to Mortgage Credit
Examiner.
Track 1
CM signed worksheet
Track 2
Lender or Owner signed CO - funds are
available.
HUD Appraisal Review (only as
needed) Review changes that may have impact on
value, operating income, or mortgage amount.
45
Change Order Flow Diagram
Change Order Process Approved CO Email
Distribution
11

• HUD Mortgage Credit Examiner
• Emails CO spreadsheet log to Lender or 202/811
  Owner, Architect, Contractor, HUD Inspector HUD
  Construction Manager.

Email
Spreadsheet
Approved Change Order Contractor can begin
making this change in the work.
46
Change Order Flow Diagram
Change Order Process Approved CO Mail
Distribution
Mail or Email if scanned
12

• HUD Mortgage Credit Examiner
• Mails to Lender or 202/811Owner
• cover letter
• copy of approved change order HUD Form 92437.

Change Order

• HUD Mortgage Credit Examiner
• Maintains Mortgage Credit File with
• wet signed original CO
• CO worksheet
• CO spreadsheet
• copy of cover letter

47
HUD Mortgage Credit Examiners
Change Order Process
Insured Projects
Section 202/811 Projects
Mortgage Credit Examiner Dan Grumet HUD San
Francisco Office [phone] Daniel_A._Grumet_at_h
ud.gov
Mortgage Credit Examiner Flo Campit HUD San
Francisco Office [phone] Flo_Campit_at_hud.gov
Mortgage Credit Examiner Rhea Perales HUD
Sacramento Office [phone] x-344 (559)
487-5033, x-226 Rhea_A._Perales_at_hud.gov
Mortgage Credit Examiner Michael Otocki HUD San
Francisco Office [phone] Michael_J._Otocki_at_
hud.gov
Mortgage Credit Examiner Pete Koziol HUD Phoenix
Office [phone] Pete_E._Koziol_at_hud.gov
Mortgage Credit Examiner Dave Hickman HUD Hawaii
Office [phone] x-232 Roy_D._Hickman_at_hud.go
v
48
Payment Requests Forms Instructions
49
Payment Requests

• Copies/Distribution (wet sign four
  (4) copies)
• HUD Inspector 2 (one for Constr. file, one
  to HUD CM)
• Lender (Insured) 2 (Lender uses one for
  payment, sends 1 to HUD Mortgage Credit after
  payment made.)
• Section 202/811Owner 2 (for
  Section 202/811 projects Owner submits one (1) to
  HUD Mortgage Credit Examiner for payment.)

Owners Requisition
HUD-92403
Contractors Requisition
HUD-92448
3
Advance of Escrow Funds
Architects Invoice
HUD-92464
Contractors Requisition

Advance of Escrow Funds
1

Owner provides supporting documentation (bills,
invoices, receipts, etc.) for other actual
expenses (not estimates) including Contractors
request, Architects Fees, Advance of Escrow
Release Form with copy of approved change orders,
consultant's fees, taxes, etc.
2
For Change Orders, Off-Sites, Minor Movables
Demolition
50
Contractors Requisition Procedures
HUD-92448
Instructions

• Contractor makes requisitions for payment on a
  monthly basis, for work in place, on HUD Form
  92448.
• Contractor, Architect and HUD Inspector schedule
  a monthly Draw Meeting at the site to review the
  payment requisition.
• After the Architect and HUD Inspector have
  reviewed and approved, the Contractor submits
  four (4) copies of their payment requisition
  two(2) to HUD Inspector, and two (2 ) to Owner
  for preparation of Owners Application for
  Advance of Mortgage Proceeds Form 92403.
• The Owner will submit the Contractors Request
  for Payment to the Lender with their Application
  for Advancement for Advance of Mortgage Proceeds
  Form 92403. (For 202/811 projects, Owner sends
  directly to HUD Mortgage Credit Examiner with
  their 92403 for all payment requests).
• Lender processes payment requests and provides
  copies to HUD Mortgage Credit Examiner. For
  Insured projects, HUD reviews and approves first
  last draws. (For Section 202/811 projects HUD
  approves all draws).

• Copies/Distribution
• (wet sign four (4) copies)
• Provide two (2) to HUD Inspector (1 for
  Constr. file, 1 to HUD CM)
• Provide two (2) to Lender (For Insured Projects
  Lender processes one for payment, Lender provides
  one to HUD Mortgage Credit).
• Provide two (2) to 202/811 Owner
  (For Section 202/811 Projects Owner provides 1
  to Mortgage Credit for payment processing).

51
Contractors Requisition Procedures
HUD-92448
A
C
B
Work in Place, excluding any stored materials
onsite, or for off-site work.
Same as Original Schedule of Values HUD 2328
HUD Inspector adjustments lists amount approved

• Column A Shall be identical to approved cost
  breakdown (Schedule of Values HUD 2328)
  excluding bond premium and Contractors other
  fees if paid at Initial Closing).

• Column B Shall be the Contractors estimate of
  work-in-place. Attach formatted back-up (similar
  to AIA G702/703) to show breakdowns for payment
  requests. Use whole dollar amounts, not cents.

• Column C Shall be used by the HUD Inspector for
  adjustments should the amounts listed need to be
  reduced due to over estimations, or
  non-compliances explain adjustment and reason
  why in Trip Report.

52
Contractors Requisition Procedures
HUD-92448
Other Fees Bond Premium excluded
Work in Place
Lender (MC on 202/811) Completes this Section
x x x
Note 10 Retainage Held
what was billed
what was received
Contractor certifying that work is completed per
Contract Documents Architect HUD Inspector
checking.
Contractor certifying what they have actually
been paid Lender HUD Mortgage Credit Examiner
checking.
Release of 10 Retainage
Lump Sum Contract 5 when Construction 100,
other 5 at Final Close. Cost Plus
Contract 5 when Contractors Cost
Certifications to HUD, other 5 at Final Closing.

53
Contractors Requisition Procedures
HUD-92448
Stored Materials
On-Site Stored Materials typically allowed
Off-Site Stored Materials not allowed unless
approved in advance of Closing (see HUD
Handbook 4435.1 Section 1-6, 4430.1 Appendix 9,
or MAP Guide Appendix 13C).
Contractor may request payment for materials
acceptably stored On-Site. A copy of the
inventory for that month (itemized per standard
unit of measure and cost) shall be attached and
reviewed by Architect and HUD Inspector sign
and date inventory. (see MAP Guide Appendices
13-B and 13-C).
54
Contractors Requisition Procedures
HUD-92448
Certifications
Architect
Note the Architects review and certification
upon which we are relying
HUD Inspector
Inspector is checking Architects review
certification, and the work
Contractor
Contractor is certifying compliance with labor
requirements regarding paying prevailing wage
rates (if/when Davis-Bacon Wages are required).
55
Advance of Escrow Funds Procedures
HUD-92464
Instructions Page 2 (start)

• Owner completes four (4) copies of the Request
  for Advance of Escrow Funds Form 92464, with
  signature.
• 2. Architect and HUD Inspector review and sign
  all four of the request Form 92464 at the Draw
  Meeting. Owner keeps two (2), and HUD Inspector
  gets two (2).
• 3. Owner submits two (2) to the Lender (for
  202/811 projects, Owner submits one (1) to HUD
  Mortgage Credit Examiner. Include Banks address
  - if funds escrowed rather than in a project
  contingency).

Owner Completes this Portion
HUD Mortgage Credit Completes this Portion
Architect Completes this Portion
HUD Inspector Completes this Portion
Note Form 92464 is required to access the
Substantial Rehab contingency funds - for
payment of completed work in approved change
orders.
56
Advance of Escrow Funds Procedures
HUD-92464
Instructions Page 1 (continued)

• Lender reviews and signs their approval, then
  submits the request to HUD Mortgage Credit
  Examiner (for 202/811 Projects HUD MC Examiner
  reviews and approves).
• HUD Mortgage Credit reviews, holds 10 retention,
  recommends approval and gets Authorizing Agents
  signature before returning it to the Lender (or
  direct to Bank for 202/811 projects with escrowed
  funds).
• Lender Releases the funds to the Owner. (For
  202/811 projects Bank releases funds if escrowed.
  If funds in a contingency, HUD MC Examiner
  releases funds from project contingency.
• Owner pays for offsite work, change orders or
  construction costs not paid at Closing.

Lender or Owner Completes this Portion
HUD Mortgage Credit Completes this Portion
57
Advance of Escrow Funds Procedures
HUD-92464
In new construction, escrow is typically used for
off-site work, demolition and change orders.
Note No retainage held on demolition work. 10
holdback held on Change Orders and Off-Site work.
Off-site work retainage is released after 30
days. Change Order holdback released at end with
project retainage.
To release funds placed in an Escrow Account (or
a contingency fund for 202/811 projects) to pay
for completed offsite, demolition, or approved
change order work the Owner must submit a
completed HUD Form 92464 for HUD approval
(through the Lender for Insured projects).
58
Advance of Escrow Funds Procedures
HUD-92464
Note for offsite work
X
X
5
40,000
20,000
50
7
15,000
15,000
100
HUD Inspector adjustments
If a construction change requires more than one
draw and work is to be completed beyond a 30 day
period, then submit a separate Escrow Release
Form for each Change Order - so release of escrow
funds can be tracked (more of a substantial
rehab. issue, than new construction).
59
Owners Requisition Procedures
HUD-92403
Instructions

• Owner (Lender assists) prepares two (2) copies of
  Owners Application for Advance of Mortgage
  Proceeds Form 92403.
• Owner includes Contractors Request for Payment
  Application HUD 92448 with their Application for
  Advance of Mortgage Proceeds Form 92403.
• Owner provides supporting documentation (bills,
  invoices, receipts, etc.) for other actual
  expenses (not estimates) including interest,
  consultant's fees, taxes and Architects fees (on
  completion basis) - Note Architect Fees will
  be withheld if performance is inadequate.
• Owner submits two (2) to the Lender (for 202/811
  projects Owner submits 1 to MC Examiner).

Owner Completes this Portion. Lender or 202/811
Housing Consultant assists the Owner as needed.
60
Owners Requisition Procedures
HUD-92403
Instructions
Lender Completes this Portion

• Lender ( MC Examiner for 202/811) processes draw
  request and provides copies to HUD Mortgage
  Credit Examiner and Construction Manager.
• HUD Mortgage Credit Examiner reviews and approves
  the first and the last draws for insured
  projects only. (HUD Mortgage Credit Examiner does
  all draws for 202/811 projects).
• HUD Mortgage Credit will contact the Lender if
  upon review adjustments need to be made on
  Insured interim advances. (HUD Mortgage Credit
  Examiner copies Owner and Housing Consultant on
  202/811 projects).

HUD Mortgage Credit Completes this Portion for
First and Last, Lender does all others
61
80
Owners Preoccupancy Conference HUD Inspectors
Preoccupancy Review
62
Pre-Occupancy Conference
Asset Management
80 Construction Completion (of first phase, if
phased occupancy approved by HUD)
When construction is approximately three quarters
to 80 complete, the Owner should contact HUD
Asset Management to schedule a Pre-Occupancy
Conference (at HUD Offices or via Teleconference)
to review HUDs Regulatory Agreement
requirements. Some of the items covered include

• Regulatory Agreement review
• Mortgage Payments
• Annual Financial Statements (filed
  electronically)
• Monthly deposits into the Reserve for
  Replacement.
• FHEO requirements regarding marketing and
  outreach (AFHM Plan HUD935.5).
• Management Certification (if subsidized project).
• Rental collections, increases, and other
  requirements (if subsidized project).
• Insurance coverage requirements (may include
  blanket fidelity bond, workers compensation
  employers liability, pub