You fill out HUD Form 92403 by listing the contractor’s approved cost line items, the work completed during the draw period, the value of materials stored on or off site, the retainage held back, and the net amount the lender should advance, then signing the certifications by the owner, contractor, architect, and HUD-approved lender. The form is the Application for Insurance of Advance of Mortgage Proceeds, and it is the single document that triggers each construction draw on an FHA-insured multifamily loan.
According to the HUD Multifamily Production Report, FHA insured more than $19 billion in multifamily mortgages in fiscal year 2024, and nearly every one of those construction loans uses Form 92403 to release funds. A single math error or missing certification can delay your draw by 30 days or more.
Here is what you will learn in this guide:
- 📋 How to complete every line of Form HUD-92403 without triggering a kickback from the HUD field office
- 🏗️ How the form ties into the Contractor’s Requisition (HUD-92448) and AIA G702/G703 schedule of values
- 💰 How retainage, stored materials, and approved change orders flow through the draw
- ⚖️ How Davis-Bacon prevailing wage and 24 CFR Part 200 rules affect your certifications
- 🚫 The seven most common mistakes that get draws rejected, and the consequences of each
What HUD Form 92403 Actually Is
HUD Form 92403 is the Application for Insurance of Advance of Mortgage Proceeds. It is the official request the borrower-mortgagor and the HUD-approved lender submit to the U.S. Department of Housing and Urban Development to insure each periodic advance of construction loan proceeds on an FHA-insured multifamily project. The form is paired with the Contractor’s Requisition (HUD-92448), which carries the trade-by-trade detail.
The form lives inside the broader Multifamily Accelerated Processing (MAP) Guide and the HUD Closing Guide. It applies to programs like Section 221(d)(4) new construction and substantial rehab, Section 220 urban renewal projects, Section 231 elderly housing, Section 213 cooperative housing, and substantial rehab under Section 207/223(f).
The plain-English purpose is simple. The form tells HUD that work has been done, materials have been delivered, and the lender wants to release a slice of the insured mortgage to pay for it. The consequence of getting it wrong is a delayed draw, a Notice of Violation, or in serious cases a referral to the HUD Office of Inspector General. A real-world example: a Phoenix sponsor named Daniel Ruiz once submitted a 92403 that double-counted $480,000 of stored steel; the HUD Account Executive flagged it within 48 hours, and the project lost a full draw cycle.
A common misconception is that the form is just a cover sheet for the contractor’s pay application. It is not. It is a sworn certification by the owner, contractor, architect, and lender, and each signature carries False Claims Act exposure if the numbers are wrong.
Who Signs the Form
Four parties sign every Form 92403. The mortgagor (the borrower or owner entity) signs first to certify that the requested advance is for work actually performed and materials actually delivered. The general contractor signs the attached HUD-92448, which feeds directly into Item 6 of the 92403. The supervisory architect signs to certify that the work in place matches the approved drawings and specifications under HUD-92403’s architect certification.
The HUD-approved MAP lender signs last and forwards the package to the HUD field office. Each signature is a separate legal certification. A false certification by any party can trigger civil penalties under 31 U.S.C. § 3729 of up to three times the government’s damages plus per-claim penalties.
Line-by-Line Walkthrough of Form 92403
The form has roughly 15 numbered items on the face page, plus the Trust Fund section, the architect’s certification, and the lender’s certification. Every line ties back to the approved Firm Commitment and the construction contract. The form must be typed, not handwritten, and any white-out invalidates the certification under HUD Handbook 4350.1.
Items 1-3: Project and Loan Identification
Item 1 asks for the project name, project number (the FHA number assigned at firm commitment), and the location. Use the exact project name from the Firm Commitment letter; even a comma difference will get the package returned. The FHA project number is the 9-digit number in the format XXX-XXXXX assigned by the HUD field office.
Item 2 asks for the mortgagor’s name and address. This must match the recorded mortgage and the entity on the Regulatory Agreement (HUD-92466). Item 3 asks for the mortgagee (lender) name and address, which must match the MAP-approved lender of record.
A misconception is that the project address can be the construction trailer or the lender’s office. It cannot. It must be the legal site address tied to the title policy and the recorded mortgage.
Item 4: Date and Number of Advance
Item 4 records the date of the application and the sequential advance number. Most projects run 18 to 24 monthly draws, numbered 1 through N. Skipping a number, or restarting the count after a change order, is a frequent rejection reason. The date should be the cut-off date for work in place, typically the 25th of the month under most MAP loan agreements.
The consequence of a wrong date is interest accrual mismatch. If the cut-off is the 25th but the form shows the 30th, the lender’s interest reserve calculation and the HUD-92464 escrow request will not match.
Item 5: Insured Mortgage Amount
Item 5 lists the original face amount of the insured mortgage as stated on the Note. This number never changes during the construction period unless a modification is approved. Even after a partial paydown, the original face amount remains in Item 5.
Sponsor Aisha Patel on a 220-unit Tampa project once entered the funded balance instead of the face amount; the field office returned the package and her draw slipped two weeks. The lesson is to copy the figure straight from the Firm Commitment every time.
Item 6: Cost Breakdown and Work in Place
Item 6 is the heart of the form. It is a multi-column schedule that mirrors the HUD-92264 cost breakdown approved at firm commitment. Columns include the original approved amount, approved change orders, revised contract amount, total work completed and stored to date, work completed this period, percentage complete, retainage held, and net amount due this draw.
Each row represents a trade or cost category: site work, concrete, masonry, structural steel, rough carpentry, roofing, mechanical, electrical, plumbing, finishes, general conditions, builder’s overhead, builder’s profit, bond premium, and the Builder-Sponsor Profit and Risk Allowance (BSPRA) where applicable. The numbers in Item 6 must reconcile exactly to the HUD-92448 Contractor’s Requisition and to the AIA G702/G703 schedule of values.
Retainage is typically 10% of work in place until the project reaches 50% completion, after which the lender and HUD may approve a reduction to 5% under MAP Guide Chapter 12. The consequence of releasing retainage early is a HUD finding and personal liability for the signing officer.
Item 7: Stored Materials
Item 7 captures the value of materials delivered to the site or to a bonded off-site warehouse but not yet incorporated into the work. To include stored materials, the contractor must provide paid invoices, evidence of insurance, a UCC-1 filing where applicable, and a bill of sale transferring title to the project. Off-site storage requires a HUD-approved bonded warehouse and additional insurance.
A common misconception is that any delivered material counts. It does not. Materials must be specifically identified, segregated, and protected. A contractor named Marcus Webb in Denver tried to claim $310,000 of generic lumber stored at a supplier’s yard; HUD denied the inclusion because the lumber was not segregated or tagged to the project.
Items 8-12: Calculations and Net Advance
Items 8 through 12 walk through the math. Item 8 totals the work in place plus stored materials. Item 9 subtracts retainage. Item 10 subtracts previous advances. Item 11 shows the net amount of this advance. Item 12 reconciles the net advance to the available mortgage proceeds.
If Item 11 exceeds the remaining undisbursed mortgage balance, the lender must either reduce the request or the borrower must deposit additional equity per the HUD-92476 Escrow Agreement. The consequence of overdrawing is a shortfall finding and a potential default under the Building Loan Agreement.
Items 13-15: Certifications and Signatures
Items 13, 14, and 15 are the certifications. Item 13 is the mortgagor’s certification that the request is for work actually performed and that there are no unpaid bills outside the request. Item 14 is the architect’s certification that the work in place conforms to the approved plans and specifications under the HUD-92403 architect’s certification. Item 15 is the lender’s certification and recommendation for insurance of the advance.
The Trust Fund certification is a separate but related sworn statement that no funds from prior advances were diverted. False statements expose every signer to 18 U.S.C. § 1001 criminal penalties of up to five years in prison.
Companion Forms You Must Submit With 92403
Form 92403 never travels alone. The complete monthly draw package typically includes seven to ten companion documents. Missing any one will trigger a kickback from the HUD Office of Multifamily Housing.
HUD-92448 Contractor’s Requisition
The HUD-92448 is the contractor’s sworn pay application. It carries the trade-by-trade breakdown that feeds Item 6 of the 92403. The numbers must reconcile to the penny. The contractor signs under penalty of 18 U.S.C. § 1010, which carries up to two years in prison for false statements on HUD documents.
A misconception is that the contractor can round numbers. The form requires exact figures. Builder Lena Okafor on a 144-unit Cleveland project rounded $12,847 to $12,850 and the field office returned the entire package.
HUD-92464 Request for Approval of Advance of Escrow Funds
The HUD-92464 is used when the draw includes funds from the working capital escrow, the operating deficit escrow, or other escrows established at closing. It is filed in addition to, not instead of, the 92403. The consequence of skipping it is that escrow funds will not be released, and the borrower must cover the gap from equity.
AIA G702 and G703
The AIA G702 Application and Certificate for Payment and the AIA G703 Continuation Sheet are industry-standard pay application forms. HUD requires them as backup to the 92448. Lenders use the G703 to verify line-item progress against the schedule of values.
Lien Waivers and Davis-Bacon Payrolls
Conditional and unconditional lien waivers from every subcontractor and supplier paid in the prior draw must be attached. Certified payrolls under Davis-Bacon Form WH-347 must accompany every draw on a project subject to prevailing wage. Missing payrolls trigger a Department of Labor investigation and back-wage liability.
Three Real-World Draw Scenarios
The cleanest way to learn the form is to see how it behaves in real situations. The three scenarios below are the most common patterns the HUD field offices see.
Scenario 1: Routine Monthly Draw With Retainage
| Draw Action | Form 92403 Consequence |
|---|---|
| Contractor completes $1,200,000 of work in place during month | Item 6 columns G and H increase by $1,200,000 |
| 10% retainage withheld | Item 9 shows $120,000 retainage; net advance is $1,080,000 |
| No change orders issued | Column C of Item 6 stays at zero |
| Architect certifies work in place matches drawings | Item 14 signed; package moves to lender |
| Lender forwards to HUD field office by 5th of month | HUD insures advance within 5-10 business days |
Scenario 2: Stored Materials Off-Site
| Draw Action | Form 92403 Consequence |
|---|---|
| Contractor purchases $400,000 of HVAC equipment stored off-site | Item 7 shows $400,000 only if bonded warehouse and bill of sale provided |
| No UCC-1 filed in favor of mortgagor | HUD denies inclusion; Item 7 reduced to zero |
| Insurance certificate names mortgagor as loss payee | Item 7 inclusion approved with documentation |
| Materials moved to site next month | Item 7 reduced; Item 6 work-in-place increased by same amount |
| Title transfer documented to project | Stored materials retainage applies at same rate |
Scenario 3: Approved Change Order Mid-Draw
| Draw Action | Form 92403 Consequence |
|---|---|
| Owner signs $250,000 change order on HUD-92437 | Column C of Item 6 increases by $250,000 |
| HUD field office approves change order before draw cut-off | Revised contract amount in Column D updates |
| Change order work 40% complete at draw date | Item 6 work-in-place increases by $100,000 |
| Retainage applied at 10% on change order portion | Item 9 increases by $10,000 |
| Net advance for change order portion | $90,000 added to Item 11 |
Named Examples of Form 92403 in Action
Maria Chen, sponsor of a 180-unit Section 221(d)(4) garden-style project in Austin, Texas, runs 22 monthly draws. On Draw 11, she crosses the 50% completion threshold. Her MAP lender requests a retainage reduction from 10% to 5% under MAP Guide Chapter 12. The field office approves, and her Item 9 retainage line drops by $640,000, freeing cash flow for the back half of construction.
James O’Sullivan, general contractor on a 96-unit Section 231 senior housing project in Boston, Massachusetts, files Draw 7 with $185,000 of stored copper piping at a bonded warehouse in Worcester. He attaches a paid invoice, a bill of sale, a UCC-1 financing statement, and an insurance certificate naming the mortgagor as loss payee. HUD insures the advance without comment.
Priya Desai, an underwriter at a HUD-approved MAP lender on a Section 220 urban renewal project in Detroit, Michigan, catches a $42,000 math error in Item 11 of Draw 4 before the package leaves her desk. She returns it to the borrower the same day. Because she caught it pre-submission, the borrower keeps the draw cycle on schedule and avoids a field office kickback.
Mistakes to Avoid on Form 92403
Most draw rejections come from the same handful of errors. Each one carries a real consequence in days lost and dollars not advanced.
- Mismatched figures between 92403 and 92448. Even a $1 mismatch triggers an automatic kickback under MAP Guide Chapter 12. The consequence is a 7-14 day delay while corrections are made and re-certified.
- Releasing retainage early. Releasing more than 10% before 50% completion violates the Building Loan Agreement. The consequence is personal liability for the signing officer and a HUD finding.
- Including unsegregated stored materials. Materials not tagged to the project fail the stored materials test. The consequence is denial of the entire stored materials line in Item 7.
- Missing certified payrolls. No WH-347 payrolls means no draw approval on a Davis-Bacon project. The consequence is back-wage liability and possible debarment.
- Stale lien waivers. Waivers older than the prior draw period are rejected. The consequence is the contractor must chase down fresh waivers, costing 5-10 days.
- Skipping the architect certification. Item 14 must be signed by the supervisory architect, not a junior staffer. The consequence is automatic rejection under HUD Handbook 4350.1.
- Wrong project number. A typo in the FHA number routes the package to the wrong field office. The consequence is up to 30 days of delay.
- Overstating percent complete. Inflating Column F of Item 6 is a False Claims Act violation. The consequence is treble damages plus per-claim penalties.
- Forgetting the Trust Fund certification. The Trust Fund certification is a separate sworn statement. The consequence of omission is the entire package being returned.
Federal Law and the Form 92403 Framework
The legal scaffolding behind Form 92403 starts with the National Housing Act and runs through 24 CFR Part 200 and the MAP Guide. The plain-English meaning is that HUD insures the lender against loss, and the form is the lender’s evidence that the advance is properly supported.
The consequence of non-compliance is loss of mortgage insurance on the affected advance, which in turn exposes the lender to repurchase risk under the HUD/Lender Qualified Participation Agreement. A real-world example: in 2019, a HUD OIG audit found a Midwest lender had advanced funds on inflated 92403 figures across four projects; the lender repaid $14 million and lost MAP approval for two years.
A common misconception is that HUD pre-audits every 92403. It does not. HUD spot-checks roughly 10% of draws, but the certifications carry False Claims Act liability for every signer regardless of audit.
Davis-Bacon Prevailing Wage Compliance
Davis-Bacon prevailing wage rules apply to all FHA multifamily new construction and substantial rehab projects with eight or more units. Every draw must include certified WH-347 payrolls for the prior period. The Department of Labor audits payrolls independently of HUD.
The consequence of a Davis-Bacon violation is back-wage liability, debarment from federal contracts, and potential criminal exposure under 18 U.S.C. § 1001. A misconception is that supervisors are exempt; they are exempt only if they are bona fide executives meeting the 29 CFR Part 541 duties test.
Cost Certification at Final Endorsement
After construction, the borrower files a HUD-92330 Mortgagor’s Certificate of Actual Cost and the contractor files a HUD-92330-A Contractor’s Certificate. HUD reconciles every Form 92403 advance to actual costs. If actual costs are less than insured advances, the mortgage is reduced at final endorsement.
The consequence is a smaller permanent loan than projected, which can break the underwriting and trigger an equity true-up. A misconception is that BSPRA and builder profit are excluded from the cost certification; they are included but capped per MAP Guide Chapter 8.
State Nuances Worth Knowing
While Form 92403 is a federal form, state law shapes the documentation around it. In California, state prevailing wage rules under Labor Code § 1771 layer on top of Davis-Bacon, often at higher rates. The consequence is contractors must pay the higher of the two rates or face DIR enforcement.
In Texas, there is no state prevailing wage statute, so federal Davis-Bacon controls alone. In New York, Labor Law § 220 imposes additional certified payroll obligations and the NY Department of Labor audits independently. In Florida, mechanics lien rules under Chapter 713 Florida Statutes require specific lien waiver language that must accompany every 92403.
Do’s and Don’ts for Filing Form 92403
Do’s:
- Do reconcile Form 92403 to Form 92448 to the penny, because any mismatch triggers an automatic kickback under MAP Guide Chapter 12.
- Do attach all certified payrolls for Davis-Bacon compliance, because missing payrolls block the draw entirely.
- Do verify the FHA project number against the Firm Commitment, because a typo routes the package to the wrong field office.
- Do collect lien waivers from every paid subcontractor, because stale waivers create mechanics lien risk on the insured property.
- Do photograph stored materials with project tags visible, because the stored materials test requires segregation evidence.
- Do submit the package by the 5th of the following month, because late submissions push the insured advance into the next interest period.
Don’ts:
- Don’t release retainage early, because doing so violates the Building Loan Agreement and creates personal liability.
- Don’t include materials without bills of sale, because the stored materials rule requires title transfer to the project.
- Don’t sign Item 13 without verifying that no unpaid bills exist, because the certification is sworn under 18 U.S.C. § 1010.
- Don’t round numbers, because the form requires exact figures and rounding triggers a kickback.
- Don’t skip the Trust Fund certification, because omission means the entire package is returned.
- Don’t backdate the form, because the date drives the interest reserve calculation and a wrong date creates a mismatch.
Pros and Cons of the 92403 Process
Pros:
- Standardized format means every HUD field office reviews draws the same way, which speeds approvals on clean packages.
- Built-in retainage protection under MAP Guide Chapter 12 protects the lender and HUD from contractor default.
- Architect and lender certifications create independent review checkpoints, which catches errors before HUD sees them.
- Cost certification reconciliation at final endorsement prevents over-mortgaging and protects the insurance fund.
- Clear paper trail through Form 92448, AIA G702, and lien waivers reduces litigation risk if a contractor walks off.
Cons:
- Heavy paperwork burden can run 200-400 pages per draw, which strains small sponsor teams without dedicated draw administrators.
- Strict timing under the MAP Guide means a single missed deadline pushes the draw a full month.
- Multiple sworn certifications under 18 U.S.C. § 1001 and 18 U.S.C. § 1010 raise personal liability for officers and architects.
- Davis-Bacon overlay under 29 CFR Part 5 adds payroll certification work that conventional construction loans do not require.
- Field office variability means processing times can range from 5 days in some HUD regions to 20 days in others.
Key Entities in the 92403 Process
The form pulls together a defined cast. The mortgagor-borrower owns the project and signs Item 13. The general contractor performs the work and signs the HUD-92448. The supervisory architect certifies work in place under Item 14. The HUD-approved MAP lender underwrites and forwards the package, signing Item 15.
The HUD field office insures the advance through its account executive. The HUD Office of Multifamily Housing sets policy through the MAP Guide. The Department of Labor Wage and Hour Division enforces Davis-Bacon on the same project. The HUD Office of Inspector General audits draws for fraud.
Each entity has a separate role and separate liability. A misconception is that the lender shoulders all the risk; in fact, every signer holds independent False Claims Act exposure for the certifications they sign.
Recap of Relevant Rulings and Enforcement Actions
In United States ex rel. Hendow v. University of Phoenix, the Ninth Circuit confirmed that false certifications on federal forms create False Claims Act liability even without direct fraud, a ruling that applies squarely to Form 92403 certifications. In United States v. Sci. Applications Int’l Corp., the D.C. Circuit held that implied certifications of compliance can trigger liability, expanding exposure for 92403 signers.
The HUD OIG semiannual reports document recurring 92403 fraud patterns, including inflated work in place, unsupported stored materials, and forged architect signatures. The consequence in nearly every documented case has been criminal prosecution, civil penalties, and program debarment.
FAQs
Is HUD Form 92403 required for every FHA multifamily construction loan?
Yes. Every FHA-insured multifamily construction or substantial rehab loan under the MAP Guide uses Form 92403 to request insurance of each advance during construction.
Can the borrower fill out Form 92403 without a HUD-approved lender?
No. Only a HUD-approved MAP lender can submit Form 92403 to HUD, because Item 15 requires the lender’s certification and recommendation for insurance of the advance.
Does Form 92403 apply to FHA 223(f) refinance loans?
No. Standard Section 223(f) refinance loans do not have a construction draw period, but 223(f) loans with substantial rehab do require Form 92403 for repair escrow advances.
Can stored materials at a contractor’s yard be included in Item 7?
No. Materials must be at the project site or at a HUD-approved bonded warehouse with title transferred to the project, not at a contractor’s general storage yard.
Is retainage always 10% on FHA multifamily projects?
No. Retainage starts at 10%, but MAP Guide Chapter 12 allows reduction to 5% after 50% completion with HUD field office approval and lender concurrence.
Does the architect have to physically visit the site each draw?
Yes. The supervisory architect must inspect work in place before certifying Item 14, and HUD expects on-site visits documented in the architect’s monthly report.
Can change orders be processed mid-draw on Form 92403?
Yes. Approved change orders documented on HUD-92437 flow into Column C of Item 6 once HUD field office approval is in hand before the draw cut-off date.
Is Davis-Bacon prevailing wage required on every FHA multifamily project?
Yes. Projects with eight or more units under most FHA multifamily programs trigger Davis-Bacon coverage, with certified WH-347 payrolls attached to each draw.
Can the borrower self-certify the architect’s role on small projects?
No. The supervisory architect must be a licensed professional independent of the borrower, and self-certification violates 24 CFR Part 200 and the MAP Guide.
Does HUD audit every Form 92403 before insuring the advance?
No. HUD spot-checks roughly 10% of draws, but every signer remains exposed to False Claims Act liability and HUD OIG audits regardless of pre-insurance review.
Can a draw be submitted electronically?
Yes. Most field offices accept electronic submission through the lender’s HUD secure portal, though wet-signature originals must be retained by the lender for the life of the loan.
Is the Trust Fund certification the same as Item 13?
No. The Trust Fund certification is a separate sworn statement that prior advance funds were not diverted, while Item 13 certifies the current advance request itself.
Related reading
- How to Fill Out HUD Form 92005 (w/Examples) + FAQs
- How to Fill Out HUD Form 92210 (w/Examples) + FAQs
- How to Fill Out HUD Form 92245 (w/Examples) + FAQs
- How to Fill Out HUD Form 92433 (w/Examples) + FAQs
- How to Fill Out HUD Form 92485 (w/Examples) + FAQs
- How to Fill Out HUD Form 92800 (w/Examples) + FAQs