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5 <br /> The Advisor will determine whether any major building systems or <br /> components are in danger of failure. <br /> Immediately after the inspection, the Rehabilitation Advisor <br /> will complete a Preliminary Cost Estimate Report, detailing each <br /> needed eligible repair and its cost, and estimating the cost of <br /> energy-conserving improvements required by Section 882.405(s) of <br /> the regulations. <br /> The Rehabilitation Manager will monitor the quality of inspec- <br /> tions by making spot inspections and comparing his findings to the <br /> initial inspection report. <br /> 2. Preliminary Feasibility Analysis <br /> The Feasibility Analysis will be completed by the Moderate <br /> Rehabilitation Advisor, using the Preliminary Cost Estimate Report. <br /> The Moderate Rehabilitation Advisor will : <br /> a. Estimate the required amount and terms'of a conventional <br /> rehabilitation loan, using the Cost Estimate Report and <br /> loan data provided by local banks, or included in the <br /> owner's proposal . <br /> b. Determine a monthly amortization amount for the loan. <br /> c. Establish a base rent, using the average rent data <br /> contained in the proposal . <br /> d. Calculate the gross rent for the unit(s) by adding <br /> the Base Rent, the Loan Amortization Amount, and an <br /> Allowance for any tenant paid utilities. <br /> e. Compare the estimated gross rent(s) with the Fair <br /> Market Rent Limits and make a determination of <br /> feasibility. <br /> The Advisor will explore any method of financing which might <br /> be available to the owner at less cost. The Rehabilitation Advisor <br /> will meet with every owner to discuss the Feasibility Analysis. At <br /> this meeting, the proposed base rent for the unit(s) will be discussed. <br /> If the owner maintains that the base rent is too low to permit adequate <br /> maintenance and management of the rehabilitated unit, he will be re- <br /> quired to submit expense data to the Advisor. This data will be anal- <br /> yzed, based on knowledge of average management and maintenance expenses <br /> in the area and on information provided by the HUD Field Office. Prop- <br /> erty tax expenses will be obtained from city tax records , taking into <br /> consideration any anticipated increases. <br />