223(a)(7) Loan Commitment
HUD 223a7 loan commitments last for 90 days. They should be in letter form and must list the commitment amount, the appropriate section (i.e. 223(a)(7) pursuant to 221(d)(4)), the loan terms and requirements, any required repairs.
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A commitment should be in letter form and must list the commitment amount, the appropriate Section (for example - 223(a)(7) pursuant to 221(d)(4)), the loan terms and requirements, any required repairs, requirements for executing a new Regulatory Agreement, requirements that the owner notify OAMPO (The Office of Asset Management and Portfolio Oversight) if and when any deferred repairs are underway and/or completed, and any special conditions.
This commitment is valid for 90 days. In general, extensions are not necessary for a Section 223(a)(7) refinancing. At the same time, HUD can extend Section 223(a)(7) commitments for a maximum of three additional 30-day periods. This is in light of updated processing and underwriting conclusions that may be necessary.
In addition, the commitment requires existing replacements reserves to be transferred in full to the new mortgage. The commitment must also specify the dollar amount to be transferred and any additional replacement deposits.
All loans close according to the HUD Closing Guide.