Section 1005.501 - Direct Guarantee Lender closing requirementsThe Direct Guarantee Lender shall close the loan in accordance with the following:
(a)Chain of title/interest.(1) For fee simple Properties, the Direct Guarantee Lender must obtain evidence of all prior ownership within 12 months of the case number assignment date. The Direct Guarantee Lender must review the evidence of prior ownership to determine any undisclosed Identity of Interest transactions. (i) If an Identity of Interest is discovered, the Direct Guarantee Lender must review for any possible Conflict of Interest.(ii) As a requirement of closing, all Borrowers must execute a Section 184 Borrower's Certification, addressing any Identity of Interest and Conflict of Interest.(2) For Trust Land transactions, the requirements for the determination of ownership title interest shall be prescribed by HUD in Section 184 Program Guidance.(b)Title/Title Status Report. The Direct Guarantee Lender must ensure that all objections to title binder/initial certified Title Status Report have been cleared, and any discrepancies have been resolved, to ensure that the Section 184 Guaranteed Loan will be in first security interest position.(c)Closing in compliance with Direct Guarantee Lender approval. The Direct Guarantee Lender must instruct the settlement agent to close the Section 184 Guaranteed Loan on the same terms or on the same assumptions in which it was underwritten and approved.(d)Closing in the Direct Guarantee Lender's name. A Section 184 Guaranteed Loan must close in the name of the Direct Guarantee Lender issuing the underwriting approval.(e)Required HUD documents at closing. The Direct Guarantee Lender must use the forms and language as prescribed in Section 184 Program Guidance.(f)Projected escrow. The Direct Guarantee Lender must establish an escrow account in accordance with § 1005.717 and the Real Estate Settlement Procedures Act and any other escrow requirements as prescribed under applicable Tribal and Federal laws and regulations.(g)Closing costs and fees. The Direct Guarantee Lender may charge the Borrower reasonable and customary fees in accordance with § 1005.515 .(h)Closing date. The closing date must occur before the expiration of the Firm Commitment.(i)Per diem interest and interest credits. The Direct Guarantee Lender may collect per diem interest from the closing date to the date Amortization begins. Alternatively, the Direct Guarantee Lender may begin Amortization up to 7 days prior to the closing date and provide a per diem interest credit. Any per diem interest credit may not be used to meet Borrower's minimum required investment. Per diem interest must be computed using a factor of 1/365th of the annual rate.(j)Authorization of Tribal notification in the event of default. At closing and on a form provided by HUD, the Borrower must elect whether to authorize the Direct Guarantee Lender or Servicer to notify the Tribe in the event of a default, as prescribed in the Section 184 Program Guidance.(k)Signatures. Direct Guarantee Lender must ensure that the note, security instrument, and all closing documents are signed by the required parties.(l)Other requirements. Direct Guarantee Lender shall close the loan in accordance with any applicable Tribal, State, or Federal requirements. Direct Guarantee Lenders must execute any other documents as may be required by applicable Tribal, Federal, or State law.