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• Project Name: Cottage Homesteads of Willow pond Project #: 092 -11264 Location: Lino Lakes, MN Page 7 38. The following repairs and alterations are required: Critical Repairs: There are no Critical Repairs required. Non - Critical Repairs: Asphalt Seal Coat Total Non - Critical Repairs: $ 13,770 $ 13,770 In accordance with HUD Handbook 4460.1, Rev -2, December, 1995, all critical work items must be completed prior to endorsement of the mortgage. All other work items may be completed after endorsement upon notification of the HUD Office. However, all work items which are not completed prior to endorsement shall have an escrow set up at 120% of the cost estimate of those remaining items and those work items must be completed within twelve months of closing. Funds will not be released from the 20% escrow until all work is completed. The holdback will be released when all of the following four items have been satisfied: (1) all repairs have been satisfactorily completed, (2) a supplemental cost certification has been approved, (3) evidence of clear title has been provided, and (4) latent defect assurances have been provided or a 2.5% escrow maintained for 15 months following supplemental cost certification. Any funds remaining in the 100% work write up escrow and the20% contingency escrow after completion of all the required repairs /improvements may be used to perform other repairs /replacements (with HUD's prior approval) or return to the borrower less money held for the latent defects escrow. 39. HUD encourages all new construction and all new applications requiring rehabilitation to utilize energy saving devices including Energy Star construction standards and appliances. Therefore, we ask you to explore such energy saving methods and devices in your final plans and specifications. 40. Prior to closing, the partnership agreement shall be revised to correspond with the requirements in the MAP Guide. 41. Dougherty Mortgage LLC., as mortgagee, shall be added to the fidelity bond coverage as an additional loss payee. 42. Any future window replacements will require a Figure 19 showing minimum attenuation of at least 30db. www.hud.gov eapanol.hud.gov