Specific Commitment Conditions (Applicable when indicated on the front
of this form)
B. Proposed Construction: The builder or mortgagee must notify the
assigned Fee Inspector as appropriate (see items 11, 12, and 13
below).
C. Warranty: Form HUD-92544 is required on all new construction and
shall be executed between the builder and the purchaser.
D. Section 223: This commitment is issued pursuant to Section 223(e).
E. Health Authority Approval: Submit local health authority approval
(on a form or letter) indicating the individual water supply and/or
sewage disposal system is acceptable.
F. Reserved.
G. Prefabricator’s Certificate: The Lender shall provide a prefabrication
certificate as required by the related engineering bulletin.
H. Termite Control (Proposed Construction): If soil poisioning is used,
the builder shall complete form HUD-NPCA-99-A, Termite Soil Treat-
ment Guarantee, and transmit a copy to HUD or the Direct Endorse-
ment Underwriter. The Mortgagee will deliver the original and a copy
to the mortgagor at closing.
I. Flood Insurance Requirement: This property is located in a special
flood hazard area and must be covered by flood insurance in accor-
dance with HUD regulation 24 CFR 203.16a.
J. Carpet Identification: (as listed in Certified Products Directory)
Manufacturer recommended maintenance program must be provided
to the homebuyer.
K. Termite Control: (Existing Construction) A recognized termite control
operator shall furnish certification using form NPMA-33, or State-
Advice to Homebuyers If your application was processed by a Direct
Endorsement (DE) lender, you should first contact them for assistance before
calling HUD.
Prepaid Items: These are charges that normally will be paid at closing and are
recurring in nature. They include such items as funds for real estate taxes and
hazard insurance. The amount of these items will vary depending upon the
closing date. No estimate is provided with this statement.
Escrow Account: This is a special account that your lender will keep on
your behalf to save the necessary funds to pay certain future bills. Your
mortgage payment will include, in addition to an amount for interest and
principal, amounts to cover such items as property taxes, hazard insur-
ance, and, for certain FHA programs, the mortgage insurance premium.
These charges are collected in advance so that your lender will have
enough money in the account to apply the charge when it comes due.
Generally, 1/12 of the next year’s estimated charges will be the amount
collected with each of your monthly mortgage payments. Bear in mind that
in most communities taxes and other operating costs are increasing. The
estimates should give some idea of what you can expect the costs to be at
the beginning. In some areas the estimate of taxes may also include
charges such as sewer charges, garbage collection fee, water rates, etc.
Mortgage Insurance Premium: The amount for insuring your mortgage.
The premium may be in the form of an upfront charge and/or a monthly
charge depending upon the section of the Housing Act under which your
mortgage is insured. Your lender can provide you with specific information
about your transaction.
mandated form, that the house and other structures within the legal
boundaries of the property indicate no evidence of active termite
infestation.
L. Code Enforcement: The lender shall submit a statement from the
public authority that the property meets local code requirements.
M. Repairs: The lender shall notify the original appraiser upon completion
of required repairs, unless otherwise instructed.
N. Lender's Certificate of Completion: The lender shall furnish a
certificate that required repairs have been examined and were satisfac-
torily completed.
O. Manufacturers Warranties must be provided to the homebuyer
covering heating/cooling systems, hot water heaters, ranges, etc.
P. Initial Inspection (2 working days) is requested before the “beginning
of construction” with forms in place.
Q. Frame Inspection (1 working day) is requested when the building is
enclosed and framing, plumbing, heating, electrical, and insulation is
complete and visible.
R. Final Inspection is requested when construction is completed and the
property ready for occupancy.
S. Insulation Certificate must be posted in a conspicuous location in the
dwelling.
T. The Insured Protection Plan Warranty Agreementshall be executed
between the builder and the homebuyer.
U. The lender shall furnish a certificate of occupancy or letter of accep-
tance from the local building authority.
Estimated Monthly Expenses: These are costs associated with homeowner-
ship which HUD believes the home-owners will have to pay when living in the
property. Two examples of “estimated monthly expenses” are fire insurance and
taxes, which are paid to your lender each month as part of your mortgage
payment. These are put into your escrow account.
Other Costs of Homeownership: Utilities are usually paid monthly to
whomever provides the service. Also, you should save a certain amount
each month to cover repair and maintenance costs which will come up while
you own your home.
Late Payments: If you do not pay your mortgage payment within 15 days
from the 1st day of the month, you can be charged a penalty. This may be
4 cents for each dollar of your payment.
New Construction: After specifications are accepted by HUD or a direct
endorsement lender, the builder is required to warrant that the house substan-
tially conforms to approved plans and specifications. This warranty is for 1 year
following the date on which title is transferred to the original buyer or the date on
which the house was first lived in, which ever happens first. If, during the
warranty period, you notice defects for which you believe the builder is
responsible, ask him in writing to fix them. If he does not fix them, write your
lender or HUD. Include your FHA case number. If inspection shows the builder
to be at fault, your lender or HUD will try to persuade him to fix the defect. If
he does not, you may be able to obtain legal relief under the builder’s warranty.
Where a structural defect is involved, HUD can provide money for corrections
under certain conditions. You cannot expect the builder to fix damage caused
by ordinary wear and tear or by by poor maintenance. Keeping the house in
good condition is your responsibility.
Weatherization. Contact your local utility company or other qualified person or firm for home energy audit. If energy-related improvements are required, the value of your
property may be increased to include the following: thermostats; insulation wrap for water heaters; insulation of ducts and pipes in unheated spaces of heating/cooling
systems; attic insulation; insulation for floors and foundation walls; installation of weather-stripping/caulking; installation of storm windows/doors. The value may be increased
by up to: (a) $2,000 without a separate value determination; (b) $3,500 if supported by a value determination by an approved appraiser; or (c) more than $3,500 subject
to value determination by the VA/HUD, as applicable, and subsequent endorsement of the VA Certificate of Reasonable Value, HUD Conditional Commitment, or Statement
of Appraised Value.
Sales Contract: It is expressly agreed that notwithstanding any other provisions
of this contract, the purchaser shall not be obligated to complete the purchase
of the property described herein or to incur any penalty by forfeiture of earnest
money deposits or otherwise unless the purchaser has been given in accor-
dance with HUD/FHA or VA requirements a written statement by the Federal
Housing Commissioner, Veterans Administration, or a Direct Endorsement
lender setting forth the appraised value of the property of not less than
$ . The purchaser shall have the privilege and
option of proceeding with consummation of the contract without regard to the
amount of the appraised valuation. The appraised valuation is arrived at to
determine the maximum mortgage the Department of Housing and Urban
Development will insure. HUD does not warrant the value nor the condition of
the property. The purchaser should satisfy himself/herself that the price and
condition of the property are acceptable.
Amount to be Borrowed When you borrow to buy a home, you pay interest and other charges which add to your cost. A larger
downpayment will result in a smaller mortgage. Borrow as little as you need and repay in the shortest time.
Homebuyer's Copy form HUD-92800.5B
