Additional Funds Agreement
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1. Who is the Sponsor in an FHA-insured context?
The term "Sponsor" typically refers to the parent company of a non-profit and is rarely used in the FHA-insured context. While the Agreement of Sponsor to Furnish Additional Funds defines the party to the agreement as the "Sponsor," there is broad flexibility as to who the "Sponsor" may be in this context. The Additional Funds Agreement is a project-specific form. Not every project will require this agreement. Housing's underwriting analysis will determine whether such an agreement is required and by whom. The point is: this is a flexible agreement that can be used when other escrows or agreements leave a gap in providing for required funds.
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