Can any upfront costs associated with an electronic risk management program be considered Eligible Costs, and therefore paid to the owner as a result of a refinance?
ORCF will not allow these costs to be included in the Criterion H Maximum Insurable Loan Calculation as they are not capital costs.-- Sep-14
Are capital leases, used to finance equipment and/or other capital items, considered eligible debt for the Borrower?
A final determination would be made during a HUD Underwriter’s review of the firm application; however, a capital lease would be considered eligible debt when the lease permits prepayment prior to the end of the term, and when the lease is terminated at HUD closing. When a capital lease meets these criteria, the “buyout” amount comprising the remaining principal balance and interest of the capital lease should be considered eligible debt as long as:
The buyout amount is verified by a payoff letter,
Documentation verifies that the item purchased is an eligible mortgageable item related to the facility, and
The FHA Lender can document that the item purchased is owned free and clear by the HUD Borrower upon payoff.