SECTION 202 AND SECTION 811- DEVELOPMENT TEAM REFERENCE GUIDE
For Project Development and Preservation
Richard Silverblatt Associates, Inc.
At the Initial Closing, HUD establishes the Capital Advance mortgage amount based upon its
processing of the Firm Commitment. At that point, the mortgage amount represents an estimate
of all the development costs to be incurred for the project. At the Cost Certification stage, which
occurs following construction, HUD reviews the actual construction and other development costs
that have been incurred for the project as reported in certified financial statements submitted for
the Owner and the General Contractor. Based upon its review, HUD determines if the Capital
Advance mortgage amount is supported by approved costs or will be increased or decreased. It
is of utmost importance to complete the cost certification as quickly as possible, because the
final mortgage amount (Maximum Capital Advance) must be established in order to proceed to
This process begins with a Pre-Cost Certification Conference, at which the HUD Mortgage Credit
staff outlines the basic requirements of the financial statements to be submitted by the Owner
(Mortgagor) and, if applicable, the general contractor, and to be certified by the independent
accountants for the Owner and General Contactor, respectively.
Requirements For the Owner and General Contractor
Owner's Cost Certification:
Mortgagor's Certificate of Actual Cost (Form HUD 92330), supporting schedules, financial
statements, accountant's certification and opinion, in accordance with HUD requirements.
The following information about the Owner's cost certification is from a handout prepared by NY
HUD Mortgage Credit:
Handbook References: 4470.2 Cost Certification Guide
2004.04 Audit Guide
Copies Required: 3 from General Contractor
3 from Owner
Signatures: All copies must have original signatures
Dates: All copies must be dated
The Sponsor/Mortgagor signature cannot be dated after the accountant signature.
Submission: All copies must be submitted together and addressed to Teresa M. Bainton, Director,
Cut-off Date for Mortgagor Cost Certification: Cannot exceed 60 days from the final inspection. It
must be on or after the final inspection.
CPA must submit an unqualified opinion letter. (See sample opinion letter attached)
Balance Sheet: Must show a mortgage payable which agrees with the mortgage amount
disbursed as of the cut-off date.
Income Statement: Must be dated from initial closing to cutoff date. It cannot include any item
from cost certification (i.e., insurance, taxes, interest).
Additional Schedules Required:
Insurance: Must show type of insurance, dates covered by payment, and be prorated to the cutoff
Taxes: Same as for insurance
Other Fees: Must separate each vendor into three columns: Amount Paid, Amount To-Be-Paid,
Total. Must indicate the service provided (i.e., survey, soil test, etc.)
General Contractor's Cost Certification
Contractor's Cost Certification, if the General Contractor is required to cost certify (i.e., if there is
a cost plus contract):
Contactor's Certificate of Actual Cost (Form HUD-92330-A) (not fillable), supporting schedules,
financial statements, accountant's certification and opinion, in accordance with HUD
See attached HUD guidelines for the General Contractor's Cost Certification