From Les Sparks:

In general those requirements have not changed. All items such as debt, R4R, and surplus cash are generally the same. Of course, that actual method of distributions may be different, but theory is the same.

Now, there are some specific differences for the 232 world. Here is what I would add:

1. Lease payments must equal or exceed the sum of the combined debt payments (principal, interest, escrows, R4R and MIP). That is a test that is not in the Guide.
2. Management fees may also apply if the client has a management agreement.
3. Insurance may be different.
4. The auditor should inquire as to the existence of any licensing, or other issues that should have been reported within 2 business days by the operator.
5. The auditor should inquire as to whether the operator filed their required quarterly and annual statements with the lender.

Numbers 4 and 5 are not really requirements for the borrower, but the failure by the operator to do this things results in non compliance with the operator’s agreement that are required to be report.

Of course, if the borrower also as more than one project they could be subject to the distribution limitations if the other projects are not cash flowing. These rules are known as the master lease requirements. If you have a master lease, you should read the master lease form and ensure that no other requirements are missing.

Les