Third-party reports are where a 221(d)(4) budget first meets reality, and where first-time sponsors most often misunderstand the rules. The short version: the MAP lender engages the professionals, the borrower funds the cost.
Who engages whom
The MAP Guide places selection squarely with the lender: the MAP lender is responsible for the selection, approval and training of appraisers and market analysts. The independence rule is explicit — the appraiser or market analyst may not be affiliated with any individual or institution involved in the application other than the MAP lender. Where a lender uses in-house appraisers, they must be independent of the lender’s own lending, investment and collection functions.
HUD separately approves the lender’s reviewers. Under the earlier MAP Guide edition, HUD had ten working days to object to a proposed reviewer, after which the person was approved by default.
What is required, and when
The reports are staged across the two application stages rather than delivered all at once.
| Stage | Reports and forms |
|---|---|
| Pre-application | Market study with comparables · Form HUD-92273 (market rent by comparison) · Form HUD-92274 (operating expense analysis) · sketch plans · Phase I environmental site assessment |
| Firm commitment | Form HUD-92264 (rental housing project income analysis and appraisal) · Form HUD-92264-A (supplement to project analysis) · updated 92273 and 92274 · full contract drawings and specifications · cost review · geotechnical and specialty reports |
The market study must be effective within 120 days before pre-application submission. This is the deadline that most often bites: a study commissioned early, while site control or zoning was still being sorted, can age out before the package is ready.
The report set
Market study
Establishes demand, captures the competitive set and supports the rents the appraiser will use. Because the coverage test runs off stabilized net operating income, and stabilized NOI runs off the appraiser’s rents, the market study is upstream of your loan size. A conservative market analyst costs you proceeds.
Appraisal
Produces HUD Form 92264. The appraiser and market analyst may be the same person, but the MAP Guide requires complete and independent reports — one cannot simply incorporate the other.
Phase I environmental site assessment
The standard is now ASTM E1527-21, with a Vapor Encroachment Screen performed to ASTM E2600-22. Any reference you see to E1527-05 is long superseded. A Phase II follows where the Phase I identifies a recognized environmental condition warranting it.
Architectural and engineering review
The lender’s architectural analyst reviews the drawings and specifications for compliance with local code and HUD requirements. HUD’s own analyst then examines the quality of the lender’s review and the transaction — not the underlying drawings from scratch. This is the MAP division of labor applied to design.
Cost review
Runs on the contractor’s cost breakdown (Form HUD-92328) and cost estimate (Form HUD-92326), with variances reported on Form HUD-92331B. The output is HUD’s recognized replacement cost — which is the number the loan-to-cost test runs against, and is not the same as your development budget.
Geotechnical, survey and specialty
Soils and geotechnical, noise, flood hazard, toxic hazard, termite, structural integrity, heat gain/loss calculations, and a legal survey with a Surveyor’s Report on Form HUD-2457. Which of these apply depends on the site.
Two practical consequences
Sequence them against the 120-day window. The market study clock is the binding one. Commission it when the package is genuinely close, not when the deal is still finding its shape.
Budget for a second round. A deal that sits in HUD queue between stages can require updated reports before firm submission. That cost is real and is routinely left out of first-pass budgets.