HUD Capital Needs Assessments Require a Different Kind of Approach

HUD’s version of a Property Condition Assessment, called a Project Capital Needs Assessment (PCNA), is a much different beast than the engineering assessments required for other multifamily lenders including Fannie Mae and Freddie Mac. 

Low and Slow.  HUD/FHA loans will have a lower interest rate but the financing process will take longer, due to a greater level of oversight and coordination.  The same goes for HUD Project Capital Needs Assessments.  Because many of the integral parts of the PCNA are reliant on various sources of information, it is vital that all parties involved (including the Lender, Appraiser and Engineering Consultant) coordinate the flow of information, which takes time.  For example, the Property Insurance Schedule form HUD-92329 accounts for the appraised/land value based on the engineering consultant’s valuation of the gross square feet per building.  Therefore, the appraiser would need this information from the consultant before they could provide the appraised value, which the consultant in turn would use to execute the form (whew!).