Requesting Permission To Change Its Accounting Period, For Federal Income: Fill & Download for Free

NO, DON’T DO IT.NO. NO. NO.Do not change your startup’s fiscal year end. Keep it to Dec 31.Generally, we highly advise clients against changing their tax year (and fiscal year) unless there is a very strong business purpose in order to avoid pitfalls of missed tax and statutory deadlines. Some deadlines will shift with a company's fiscal year (such as the corporate income tax return), while other deadlines will remain on a calendar basis, depending on jurisdiction and type of tax (1099s, payroll taxes, sales taxes, property taxes, etc.). Overall, this complicates tax compliance heavily while providing very little benefit.Additionally, your startup tax CPA would need to file a short year-year return for the year in which the change would occur, which would mean two tax returns in one year.If you are looking into a change of fiscal year because of a presentation standpoint, you can always present your financials to the board in any given increment you like (6/1/17-5/31/18) or one that better illustrates the life cycle of the business as this would not complicate the tax return filing.….But if you (are a crazy person and) decide to change your fiscal year end, here's how to do it for Federal tax purposes:IRS approval is required to change your tax year end, but under certain circumstances, a C-corporation can change tax year end under automatic approval procedures.Among the basic requirements to qualify for an automatic change:the corporation must not have changed its tax year within the prior 48 months;the corporation must annualize its taxable income for a short tax year (This means that a startup with a 1/31 fiscal year end would file a 1-month short year-year return for 1/1/2018-1/31/2018, but annualize the income to ensure that the company is not getting any benefits from short-year tax attributes).various other requirements to ensure the year-end change is not a method of tax avoidance (about a dozen other rules, but most are not applicable to startups).A corporation, which does not qualify for an automatic change may still be able to obtain consent from the IRS for the change under the non-automatic procedures as long as it can establish a valid business purpose (note: reduction or avoidance of tax is not considered a valid business purpose). IRS has prescribed a series of tests for establishing a business purpose for a requested annual accounting period - testing when revenue is earned, or the natural business cycle of the company, or other "facts & circumstances".To request permission from the IRS for a change (including changes which are automatically approved), the company must file Form 1128 (Application for Change in Accounting Period) no later than the due date for the federal tax return for the short tax year, but no earlier than the last day of your short year (So a startup with a 1/31 fiscal year end must apply for the change between January 1, 2018 and May 15, 2018 after the short tax year ending 1/31/2018).If you receive IRS approval for your short tax year ending 1/31, your short-year-return 2018 (and all subsequent fiscal year returns) would be due May 15, but can be extended to November 15 each year. As mentioned above, many of your other tax filing deadlines would remain on a calendar basis (such as payroll tax, W-2s, 1099s, certain state taxes, property taxes, sales taxes, etc.).Since most startups ate the Seed - Series B stage is a loss company (and since tax rates have recently all been lowed to a flat 21% for C-corporations) I don't anticipate any tax complications from a change in year-end.

I don’t know whether to thank or curse you for the A2A, Neil. As a general rule, I don’t answer questions with more than 20 answers[1] , as by that point I assume that everything that can be said has been said. However, the 495 answers that the edit log says this question has received at the time of this writing are… Well, I’ll get to those; but, suffice to stay, they stopped me in my tracks[2] .The short of it is that the broad character and quality of the answers was distressing enough to keep me awake at night - so thanks for that.This answer will be far from my lengthier magna opera, but I’m going to take it in four parts. Part I will unpack the question. Part II the answers to date. Part III the core of my answer. Part IV some concluding thoughts.Part I: Unpacking the question.I’m going to be honest with you, Neil: the question as worded is confusing, and I reckon that confusion has contributed greatly to many of the dismissive answers you’ve received to-date (to be discussed in Part II). As we say in policy circles, if you get the question wrong, your solution will also be wrong[3] .Let’s look at the question.Given that nothing in the US Constitution gives citizens or the president a right to keep tax returns secret, shouldn’t Federalist Supreme Court justices agree that statutes requiring presidents or candidates to release their tax returns are valid?There are two problems. The first is that you’re leading with a fallacy (ie, that because the Constitution is silent on one thing, it is permissive of another), and the second is that you’re obscuring the main controversy (ie, statutes requiring presidents and presidential candidates to disclose their taxes) by making Supreme Court justices the subject of the question. This becomes apparent when you move the opening, dependent clause to the end of the question as such:Shouldn’t Federalist Supreme Court justices agree that statutes requiring presidents or candidates to release their tax returns are valid given that nothing in the US Constitution gives citizens or the president a right to keep tax returns secret?Which leaves as the basic, subject-verb-object simple sentence:Shouldn’t Supreme Court justices agree the statutes are valid?But then that reveals a second logical error, which is that you’ve assumed the validity of the statutes in the first place - which I’ll discuss in detail later. Between the two fallacies and the confusing phraseology, you’ve invited not just a great deal of hostility to how you’ve presented the question, but a plethora of answers which miss the mark simply because they missed the point of the question.For my purposes, the form of the question I will address in Part III will be:Would statutes requiring sitting presidents or presidential candidates to release their tax returns be valid under the Constitution?That strikes me as a fair interpretation of the intent of the question stripped of fallacies and convoluted structure.Part II: Unpacking the answersSo… I tried reading all of the answers to-date - really, because I’m going to be pretty harsh here. But I think I got about 200 deep before I got the gist of things and finally went to bed.Based on my sample, though, I confidently assert that the overwhelming majority of answers to this question are wrong.Now, just as an infinite number of monkeys typing on an infinite number of typewriters for an infinite amount of time might ultimately produce Shakespeare, the sheer volume of answers has provided the contours of a single, correct answer, but they’re lost in the morass of derisiveness and, well, wrongness that otherwise pervades the feed.Without giving air time to the answers that are wrong by virtue of their curtness, hostility, or rambling, tangential screeds, here are the main themes that the substantive answers get wrong.Over-reliance on the Fourth AmendmentIn challenging the leading assertion that there is “nothing in the Constitution [that] gives citizens or the president a right to keep tax returns secret,” many, if not the bulk of answers, point you to the Fourth Amendment, which states:The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.Using the Fourth Amendment to debunk the assertion isn’t wrong (ie, there is, in fact, something in the Constitution), but where most of these answers went on to err was asserting that the implied right to privacy contained within the Fourth Amendment is absolute.It is not.The Fourth Amendment protects “the right . . . against unreasonable searches and seizures,” and there may be (and are, as we’ll see) reasonable grounds to demand one’s “papers,” which so-far has been categorically unexplored by the answers.Over-reliance on the Ninth AmendmentEither in isolation or in combination with articulation of the Fourth Amendment, a number of answers have tried to challenge the core of your leading assertion by pointing out that the Constitution itself - through the Ninth Amendment - effectively says, “Don’t take my silence to be absolute.”The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.But as with discussion of the Fourth Amendment, the answers generally fail to go on to address the implicit question: “Why do you assume that the Ninth Amendment affords an absolute protection?”Incorrect application of the Tenth AmendmentAs with the Ninth Amendment, several answers invoked the Tenth to challenge the assertion that absence of authority is permission of conduct. But just as many answers challenged you on whether you read the Constitution, I wondered whether any who invoked the Tenth had ever read it - even when they quoted it:The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.While the Ninth Amendment concerns rights not articulated by the Constitution, the Tenth Amendment concerns powers; more specifically, it articulates that powers not given to the Federal government are retained by the States - or, if the States have not assumed such powers, then to the people.The Tenth Amendment is ultimately your best argument for defending your assertion: that is, if the States choose to legislate to mandate political candidates’ disclosure of tax returns, that may be a legitimate exercise of the States’ powers (it isn’t, as I’ll discuss in the next part, but it was your strongest argument).Asserting lack of jurisdiction and over-reliance on the Fifth AmendmentSome of the most popular answers to-date assert that your question fails because there either aren’t any such statutes in the first place; that the only relevant statutes are those which explicitly protect the privacy of a person’s tax returns, regardless of Constitutional provisions; or, no entity outside of the IRS has any scope to see a person’s tax returns, regardless of Constitutional provisions.The most popular answer to-date even contains this breathtaking assertion:States have no authority over federal taxes or returns therefore, in turn, they also have no authority to demand their release or examine them.I’m sure that would come as a shock to the many state prosecutors who have relied on persons’ federal tax returns to prove the commission of financial crimes under their state’s laws. Let the appeals begin! (cc: Andrew Weill)Of the 200-ish answers I scoped prior to writing mine, only two cited the statute governing Congress’ authority to demand and examine a person’s tax returns[4] (and one of them incompletely, thus incorrectly):(f) Disclosure to Committees of Congress(1) Committee on Ways and Means, Committee on Finance, and Joint Committee on TaxationUpon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.(2) Chief of Staff of Joint Committee on TaxationUpon written request by the Chief of Staff of the Joint Committee on Taxation, the Secretary shall furnish him with any return or return information specified in such request. Such Chief of Staff may submit such return or return information to any committee described in paragraph (1), except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.(3) Other committeesPursuant to an action by, and upon written request by the chairman of, a committee of the Senate or the House of Representatives (other than a committee specified in paragraph (1)) specially authorized to inspect any return or return information by a resolution of the Senate or the House of Representatives or, in the case of a joint committee (other than the joint committee specified in paragraph (1)) by concurrent resolution, the Secretary shall furnish such committee, or a duly authorized and designated subcommittee thereof, sitting in closed executive session, with any return or return information which such resolution authorizes the committee or subcommittee to inspect. Any resolution described in this paragraph shall specify the purpose for which the return or return information is to be furnished and that such information cannot reasonably be obtained from any other source.The use of shall in those paragraphs is key[5] . It isn’t that Congress has the authority to ask for permission to see a person’s tax returns, it has the express authority to demand and examine them, and they “shall” be provided for such purpose.A number of answers - almost all without citing the above statute - have gone on to challenge Congress’ authority to enter into such examinations without a “legitimate purpose.” The Supreme Court, however, has already ruled that Congress has broad investigatory powers that includes examination of a person’s financial details[6] [7] :We are of opinion that the power of inquiry -- with process to enforce it -- is an essential and appropriate auxiliary to the legislative function. It was so regarded and employed in American legislatures before the Constitution was framed and ratified. . . .A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change, and where the legislative body does not itself possess the requisite information -- which not infrequently is true -- recourse must be had to others who do possess it. Experience has taught that mere requests for such information often are unavailing, and also that information which is volunteered is not always accurate or complete, so some means of compulsion are essential to obtain what is needed. All this was true before and when the Constitution was framed and adopted. In that period, the power of inquiry, with enforcing process, was regarded and employed as a necessary and appropriate attribute of the power to legislate -- indeed, was treated as inhering in it. Thus, there is ample warrant for thinking, as we do, that the constitutional provisions which commit the legislative function to the two houses are intended to include this attribute to the end that the function may be effectively exercised.The contention is earnestly made on behalf of the witness that this power of inquiry, if sustained, may be abusively and oppressively exerted. If this be so, it affords no ground for denying the power. The same contention might be directed against the power to legislate, and, of course, would be unavailing. We must assume for present purposes that neither houses will be disposed to exert the power beyond its proper bounds, or without due regard to the rights of witnesses. But if, contrary to this assumption, controlling limitations or restrictions are disregarded . . . a witness rightfully may refuse to answer where the bounds of the power are exceeded or the questions are not pertinent to the matter under inquiry.Now, that latter statement sets up another of the most common assertions made in the answers to-date, which is reliance on the Fifth Amendment to shield someone from self-incrimination by way of illicit declarations on their tax returns.It is true that people are required to declare illicit sources of income on their taxes, and may claim protections in such returns[8] …If the form of return provided called for answers that the defendant was privileged from making, he could have raised the objection in the return, but could not on that account refuse to make any return at all.…however, that is not an absolute defence to having tax returns introduced as evidence in criminal prosecutions[9] .In combination with Congress’ declared, broad authority to make investigations in order to ascertain the adequacy of existing tax laws or, say, evidence of bribery or Emoluments Clause violations that may require impeachment and removal of Federal officials, the notion that Congress has no jurisdiction is patently false.And in combination, the government’s legitimate interests in ensuring citizens’ compliance with tax law absolutely generates reasonable grounds to demand and examine a person’s tax returns, scuttling the Fourth Amendment argument put forward in so many answers.However, that alone isn’t sufficient to answer the question.Part III: My answerOf the answers I scanned, only two came close to the Constitutional provision which actually holds over the question:No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.The Supreme Court has previously ruled that states cannot add qualifications to office beyond what’s in the Constitution[10] . While the existing ruling concerned candidates for Congressional office, there’s little question that the principles would apply to presidential candidates:[T]he power to add qualifications is not part of the original powers of sovereignty that the Tenth Amendment reserved to the States. Petitioners' Tenth Amendment argument misconceives the nature of the right at issue because that Amendment could only "reserve" that which existed before. As Justice Story recognized, "the states can exercise no powers whatsoever, which exclusively spring out of the existence of the national government, which the constitution does not delegate to them .... No state can say, that it has reserved, what it never possessed."Likewise, the Supreme Court has previously ruled that Congress also has no scope to add qualifications beyond the Constitution[11] :[A]nalysis of the "textual commitment" under Art. I, § 5 has demonstrated that, in judging the qualifications of its members, Congress is limited to the standing qualifications prescribed in the Constitution.Therefore, any statute that would require a president or presidential candidate to release their tax returns as a condition of candidacy or qualification to receive electoral votes would be patently unconstitutional.Moreover, while I dismissed the broad assertions of the Fourth Amendment’s applicability earlier, I also said that it wasn’t necessarily incorrect to cite it. Indeed, the Fourth Amendment, on its own and in combination with others, has been said to create “a zone of privacy” that cannot be violated without due process[12] .While Congress has the power to demand a person’s tax returns as an exercise of its legitimate investigatory powers, the same could not be said of the states requiring disclosures for the sake of record-keeping, nor to the public for the sake of transparency. Even in Congress’ power to examine a person’s tax returns, they must do so in closed session unless given express permission of the individual under scrutiny.And so even if the mandate were made separate from any condition of running for office, coercing someone to violate their privacy - even if given some guarantee of immunity or security in secrecy - would almost certainly be ruled to be an unconstitutional violation.Part IV: Concluding thoughtsThe most frustrating thing about this question and the answers it had so-far received was that there are engaging points to be made, but the hostility the question provoked - between its fallacious wording and, let’s be obvious now, the direct challenge to President Trump fiercely resisting any examination of his taxes[13] [14] - took priority over serious examination of those issues.More to the point: the most upvoted and distributed answers to this question are patently wrong, but they served a reinforcing tribal purpose, and succeeded solely on that merit. And yet, had they taken a pause and made serious examination of the issues, they still could have made a defence of President Trump on the facts.That was really what kept this question and the answers floating in my mind overnight.As well aware as I am of my reputation for liberally footnoting my answers[15] , I do it for a reason: So that people can, if they’re inclined, check my work and debate me on the facts.However, I could count the number of sources the hundreds of authors to-date used to answer this question on two hands, and yet they largely presumed to be authoritative without even offering the weakest of evidence.Moreover, given the tedious repetition of the arguments in the answers, it was plain that few, if any, had bothered to see if their case had already been made and could be buttressed rather than repeated, and so decided to shout for the sake of opining.But what distresses me isn’t that people are wrong, or even that people might disagree with me - it was the confidence of the wrongness, no different than the fallacies within the question as presented, and the fact that people who should know better went along with it because it served a tribal purpose.I’ve been on Quora and engaged in politics long enough that I should be neither surprised nor bothered by that - and, indeed, I generally don’t care about people holding biases[16] - but seeing literally hundreds of answers that were such a gross, obvious display of tribalism over reasoning (when, again, reasoned answers could have served the same purpose) gave me a disquieting pause.Also, Neil, now that you have almost closed in on 500 answers to the question, I would strongly encourage you to stop asking for additional answers. It’s not that I believe that I’ve provided such a commanding response that no other could have merit, but you’re now well beyond the point of diminishing returns.Footnotes[1] Carter Moore's answer to Before posting your own answer to a question on Quora, do you read what everybody else has written? Why or why not?[2] Carter Moore's answer to How do you write your Quora answers? How do you decide what questions you will answer? How long does it typically take for you to answer a question? Do you plan out your answers?[3] Carter Moore's answer to What is analytical writing?[4] 26 U.S. Code § 6103 - Confidentiality and disclosure of returns and return information[5] Carter Moore's answer to How has Donald Trump successfully blocked Congress from obtaining a copy of his tax returns?[6] McGrain v. Daugherty, 273 U.S. 135 (1927)[7] In Teapot Dome Case, Supreme Court Cemented Congressional Power to Investigate[8] United States v. Sullivan, 274 U.S. 259 (1927)[9] Garner v. United States, 424 U.S. 648 (1976)[10] U.S. Term Limits, Inc. v. Thornton, 514 U.S. 779 (1995)[11] Powell v. McCormack, 395 U.S. 486 (1969)[12] Griswold v. Connecticut, 381 U.S. 479 (1965)[13] The many times Donald Trump promised he was going to release his tax returns [14] President Trump asks Supreme Court to block access to his tax returns, setting up separation of powers battle[15] https://www.quora.com/How-do-I-fit-in-on-Quora/answer/Tom-Robinson-110/comment/120715406[16] Carter Moore's answer to What's wrong with being "politically biased"?

It’s important for home buyers to understand that a mortgage commitment letter in NYC does not guarantee that the bank will fund your loan.As you will see from the NYC mortgage commitment letter sample below, there are many contingencies in place for the bank to revoke its loan commitment to you. If you’re about to submit an offer and deciding whether to waive the mortgage contingency, it’s important to understand what a mortgage commitment letter entails and how much assurance a loan commitment offers you in the first place.What does a NYC mortgage commitment letter sample look like?This is an example of a standard mortgage loan commitment letter that would be issued to a New York City condo or co-op apartment buyer. There are additional sections in this NYC mortgage commitment letter sample you should review such as Commitment Conditions.MORTGAGE LOAN COMMITMENTBorrower Name(s):Borrower Mailing Address:Lender:Property Address:Type of Property: [Condo, Co-op, etc.]Commitment Expiration Date:Date:It is a pleasure to notify you that your application for a mortgage loan has been approved subject to the following matters set forth below and on pages 2 and 3.INSTRUCTIONSPlease sign, date and return Lender’s copy of this Commitment, along with any required fees and items requested, to the Lender at the following address, within 15 days of the date hereof, or at the option of Lender, this Commitment shall become null and void. Should you have any questions, please contact:This approval is not a final commitment. Due to the fact that interest rates are subject to change without notice, your approved payment and loan amount may change if interest rates increase or decrease.EFFECTIVE DATE AND COMMITMENT FEEThis commitment will become effective upon compliance with the terms herein and, if applicable, the receipt of your check in the amount of any non-refundable commitment fee (“stand-by fee”). It is understood and agreed that if this mortgage loan is not settled in accordance with the terms and conditions of this commitment, the Lender shall retain this fee as earned charges for the origination and approval of this loan.AMOUNTS, TERMS AND FEESAmount of Loan $[Amount]Initial (Contract) Interest Rate [Rate]%Loan Term [Number] monthsAmortization TypeBalloon Term (if applicable) [X] monthsLoan TypeLien Position 1st LienPAYMENT (P&I)Your initial interest only principal and interest (P&I) amount is $[Amount]. This amount does not include any escrowed amounts and may change if there is a change in loan terms.ESCROW[ X ] An Escrow Account is not required.[ ] An Escrow Account is required.Even if an Escrow (Impound) Account is not required at time of settlement, subject to the terms of your specific loan documents, the Lender may set up and require an Account should the taxes or insurance on the subject property ever become delinquent.EVIDENCE OF TITLEThe Evidence of Title is to be provided to the Lender and must indicate no liens, encumbrances, or any adverse covenants or conditions to title unless approved by Lender. The Evidence of Title must be issued from a firm or source, and in a form, acceptable to Lender. Borrower will be charged for the cost of providing such title and the cost of recording documents, all of which will be ordered by Lender unless requested otherwise.CANCELLATIONThe Lender reserves the right to terminate this commitment prior to the settlement of the loan in the event of an adverse change in your personal or financial status, or if the improvements on the property are damaged by fire or other casualty.REQUIRED ITEMS OR CONDITIONSAll Items Listed on the Commitment Conditions Addendum Apply.THE FOLLOWING CONDITIONS MAY APPLY TO YOUR LOAN DEPENDING ON THE LOAN TYPE AND TERMS.BALLOON MATURITYA balloon loan matures before the loan is fully amortized. The balance of the loan will be due in a lump sum payment at maturity.FIRE AND EXTENDED COVERAGE INSURANCEPrior to settlement, we will require an original insurance policy and/or binder containing fire and extended coverage (i.e., windstorm, hurricane, hail damages, or any other perils that are normally included under an extended coverage endorsement) insurance in an amount equal to the lesser of 100% of the insurable value of the improvements, or the unpaid principal balance of the mortgage as long as it equals the minimum amount (80% of the insurable value of improvements) required to compensate for damage or loss on a replacement cost basis through a company acceptable to the Lender, and a receipt showing premiums paid in advance for one year. The insurance policy shall also contain a standard mortgage clause in favor of Lender. We cannot require you to obtain a policy which exceeds the guaranteed replacement cost of the improvements securing the loan.If the property is new construction and you are not able to occupy the property immediately after closing, you will be required to furnish an original fire/hazard insurance policy or binder, including a Builder’s Risk Rider. If this is a renovation of an existing dwelling that will remain occupied, a Builder’s Risk Rider is not necessary.GOVERNMENT INSURED LOANSLoan Commitments issued for these types of mortgage loans, including, but not limited to FmHA, RHS, FHA, and VA, are subject to all the terms and conditions of the Agency’s commitment, or the VA certificate of reasonable value, as well as the rules, and regulations, and all applicable requirements of the Farmers Home Administration, Rural Housing Service, Department of Housing and Urban Development, the Department of Veterans Affairs, and/or other state or municipal authority.FLOOD INSURANCEBy signing and accepting this commitment, you acknowledge that if the property securing this loan is in an area identified as having a special flood hazard you agree to these insurance requirements.Our policy, in order to best protect collateral interest, is to adhere to the more common industry practice of requiring flood coverage for the lesser of: the full 100% Replacement Cost Value or the maximum amount of insurance available under NFIP for the particular type of building; currently $250,000 per residential dwelling/condominium unit. A copy of the declaration page or application signed by the agent, along with proof premium has been paid, is required prior to closing.Flood insurance is mandatory now or in the future if this property has been or will be determined to be in an area which has a special flood hazard. Federal Law requires that flood insurance, available through any agent, must cover the lowest of: the outstanding principal balance of the loan[s]; the maximum amount of coverage allowed for the type of building under NFIP or the full replacement cost value of the building or contents securing the loan.TAX AND INSURANCE PAYMENTSMonthly deposits and initial deposits as determined by Lender are required to cover the payment of estimated annual real estate taxes, special assessments and, if applicable, FHA or Private Mortgage Insurance Premiums. Lender may also require additional deposits for hazard or other insurance if required for this loan. Such deposits are to be placed in a separate escrow or impound account.SPECIAL ASSESSMENTSIf required, all unpaid and future special assessment installments must be paid in full prior to, or at time of settlement.DOCUMENTATIONThe mortgage or deed of trust, note and other pertinent loan documents will be provided by Lender and must be signed by all applicants that are to be contractually liable under this obligation. Further, the mortgage or deed of trust must be signed by any non-applicant spouses if their signature is required under state law to create a valid lien, pass clear title, or waive unclear rights to property. Note: Samples of loan documents are available upon request.ADDITIONAL CONDITIONS FOR CONSTRUCTION LOANS.CONSTRUCTION LOANS: ONE PAYOUT AND MULTIPLE PAYOUTImprovements are to be built in a good and workman-like manner in strict accordance with plans and specifications furnished Lender and in compliance with applicable building codes. After completion, said improvements shall be approved by a representative of Lender and an occupancy permit shall be issued by local municipality. Any changes, whether they be additions, deletions, or alterations, of the plans and specifications, must be approved in writing by Lender in order that this loan commitment remain in effect.CONSTRUCTION LOANS: MULTIPLE PAYOUTEvidence must be submitted that the net proceeds of our loan are sufficient to complete the construction of the building, free and clear of all claims of Mechanic’s Liens for labor and material. All disbursements will be made upon the order of the borrower upon presentment of proper waivers of lien, subject to compliance inspections by the Department of Veterans Affairs, the Federal Housing Administration, or Lender, not to exceed 80% of the value of the work done. The remaining funds will be held back until the certificate of completion and/or occupancy certificate is issued.I (WE) accept the terms and Conditions of this Commitment and will notify Lender if there are any changes to the information provided on the application before the closing of the loan.Borrower DateCOMMITMENT ISSUED ON BEHALF OF LENDER BY:Take special note of the cancellation clause listed above. If you lose your job or suffer some other financial setback, the bank will have cause to terminate your loan commitment!What are some typical commitment conditions in a NYC mortgage commitment letter sample?This is an example of a some typical commitment conditions in a NYC mortgage commitment letter sample. Note the long check-list of tasks that must be completed in order for the lender’s commitment to be valid.COMMITMENT CONDITIONS(Attachment to Mortgage Loan Commitment)Borrower: The Closing Disclosure will be provided to you in advance of your closing indicating your loan terms and is followed by a government mandated waiting period before the actual closing occurs. Receipt of the Closing Disclosure does not indicate all loan conditions have been satisfied which must occur prior to closing. Changes of any kind that occur after the final Closing Disclosure has been delivered to you may result in an additional waiting period prior to closing.Borrower: This loan is also subject to all other lender specified conditions and must comply with all applicable federal, state, and local laws and regulations.Lender: Verification from the Lender’s Closing Agent / Attorney that a Recognition Agreement has been executed by the the Cooperative Board and received by the Closing Agent/AttorneyLender: Title to have Recorded UCC1 lien search at time of closingLender: Recognition agreements and stock certificate required at time of closingLender: This loan is approved for a maximum interest rate of — [ ]% (qualifying pmt)Lender: If the loan does not close by the expiration date of the credit documents which includes verification of employment, assets and credit, re-verification will be required. To avoid re-verification the loan must close by: [Date] (rate)Lender: Obtain a completed and signed Form 4506-T (written permission to request tax returns from the IRS) for all borrowers at and before closing. — ** rcvd prior to closing **Lender: Closing agent to verify borrower(s) identityLender: Fully executed and signed Social Security Administration release (form OMB #0960–0760)Lender: Loan was approved based on the following parameters: Debt to Income Ratio not to exceed [ ]%; Total Reserves required for Transaction are $[Amount] or 12mos (subject to change) plus closing cost & prepays of $[Amount] (subject to change). Required Liquid Funds for transaction can be no less than $[Amount]. If any of these parameters change, as required by product guidelines, the loan will be subject to re-underwriting.Lender: If the loan does not close by the expiration date of the following documents, re-verification will be required:Appraisal: [Date] Verbal VOE: [Date] Rate: [Date] Lien Search: [Date] Co-Op Approval: [Date]Lender: No subordinate financing allowedLender: Seller paid closing cost may not exceed actual costs, the maximum amount that can be paid is — $[Amount]Lender: No cash out to borrower(s) at closingNote that this hypothetical lender does not allow any subordinate financing. That means you won’t be able to take out a 2nd lien home equity line of credit at a later time. Please also note that if your purchase doesn’t close in time, the lender may need to re-do the underwriting process.Sample Mortgage Commitment Letter InstructionsCONGRATULATIONS!Your application for a [Bank Name] Co-op Loan has just been approved. Enclosed you will find a commitment letter which provides you with specific details regarding your loan approval. We urge you to read it carefully as it contains important information on the financing terms and the documentation that is required in order to close your loan.WHAT ARE THE NEXT STEPS?You must sign the commitment and return it to us within ten (10) days of the commitment or before the expiration date, whichever is sooner with any fees specified. Please note that this commitment letter contains two critical dates. If you elected to lock in your interest rate and points there is a rate expiration date. If you do not close your loan on or before the rate expiration date, the terms and conditions will change.In addition, there is credit document expiration date. If you do not close your loan on before this date you will need to satisfactorily update certain credit documents in order for the terms and conditions of this commitment letter to apply. If your rate and points have not been locked, the rate expiration date will be established once you elect to lock in your rate. You must lock in your rate at least five business days prior to loan closing.Please read the commitment letter and riders carefully, as they contain conditions that must be satisfied prior to your loan closing. It is incumbent upon you to make sure that we are in receipt of all items listed. These items must be reviewed and approved at least three (3) days prior to loan closing. Again we must emphasize that you cannot close your loan unless all these items have been satisfied.We have notified the closing attorney for [Bank Name] of this loan transaction.Arrangement and instructions for closing your loan should be obtained by contacting the [Bank Name] attorney named in your commitment letter. A loan closing can be scheduled shortly after all necessary documents have been received by [Bank Name].The [Bank Name] attorney will be able to provide you with specific information regarding the following:-Closing Date-Closing Location-Prepaid Interest and Escrow Funds-Co-op Lien Search Requirements-Survey Coverage Requirements-Insurance Requirements (Hazard/Flood/Condominium/Co-op)We encourage you to have your attorney contact the [Bank Name] closing attorney to review the requirements. This should help to ensure that your closing goes smoothly.Thank you for choosing [Bank Name] for your financing needs. We are delighted to have you as a client.What are sample closing conditions in NYC?Dear [Borrower],We have received today from [Bank Name] a copy of a commitment letter for a co-op loan and will represent [Bank Name] at the closing. Please be advised that we cannot schedule a closing unless we receive confirmation that the conditions required by [Bank Name], prior to closing, have been satisfied and the conditions required at closing will be obtainable and brought to the loan closing.Enclosed with this letter you will find three copies of Recognition Agreements. The Recognition Agreement must be delivered to and executed by an Officer of the Cooperative Corporation. The fully executed Recognition Agreement must be delivered to our office prior to loan closing or it must be brought to loan closing. We will be unable to close a co-op loan without the original executed Recognition Agreement with the corporate seal.Enclosed with this letter you will find a Uniform Commercial Code Authorization Form. This document must be signed by each person who will be on title and promptly returned to our office. This document is necessary for [Bank Name], to obtain a security interest in the cooperative. Upon our receipt and/or confirmation of certain information i.e. section/block/lot numbers of the building same will be inserted in the financing statement prior to filing. Please be sure to note that the executed Uniform Commercial Code Authorization Form and the check required by paragraph 3 below must be remitted to our attention at the time you accept your commitment letter to a assure a timely closing.To ensure that [Bank Name] has a proper security interest, a Cooperative search of the appropriate records will be conducted solely for [Bank Name]’s benefit. The search will be ordered by our firm and will be reviewed and approved by our office prior to loan closing. Payment of the lien search must be remitted to our office at the time you send back the UCC-1 Authorization form. The cost of the search is $275.00 and the filing fee for the UCC-1 is $100.00. Please remit a check for $375.00 made payable to [Name] for the lien search and the recording of the financing statement.Unless paid prior to loan closing, all charges and fees due to [Bank Name] must be paid from the loan proceeds. If you call our office the day before loan closing, we will advise you of the exact amount being deducted from loan proceeds.The commitment letter has two expiration dates; one is the Commitment Expiration and one is the Rate Lock Expiration. The loan must close and funds must be disbursed on or before the earlier of the Commitment Expiration or the Lock-In Expiration. In the event the loan is a refinance transaction and it is subject to the required three (3) business-day right of recission it must close four (4) business days prior to the expiration of any applicable rate lock agreement.Please note that a closing cannot be scheduled until the following items have been completed:– We have been advised by [Bank Name] that all commitment conditions have been satisfied.– The U.C.C. -1 financing statement has been filed.– The co-op search has been reviewed and approved– We have a copy of the proposed Stock Certificate and the first page of the Proprietary Lease. At closing, the original Stock Certificate and Proprietary Lease must be delivered to [Bank Name] Closing Attorney.– We must be in receipt prior to or at loan closing of a blanket insurance policy for the co-op evidencing sufficient dwelling coverage.[Bank Name] requires at least two (2) business days to schedule a loan closing.We are committed to providing you with the highest level of customer service. If you should have any questions please feel free to call us at [Phone Number].Content courtesy of https://www.hauseit.com/nyc-mortgage-commitment-letter-sample/Disclosure: Hauseit and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.