cfr_sections
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248 rows where part_number = 203 and title_number = 24 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 24:24:2.1.1.2.4.1.79.1 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.1 Underwriting procedures. | HUD | [62 FR 30225, June 2, 1997] | The three underwriting procedures for single family mortgages are: (a) Direct Endorsement. This procedure, which is described in § 203.5, is available for mortgagees that are eligible under § 203.3. (b) Lender insurance. This procedure, which is described in § 203.6, is available for mortgagees that are eligible for the Direct Endorsement program under § 203.5, and that are also approved according to § 203.4. (c) Issuing of commitments through HUD offices. Processing through HUD offices as described in § 203.7, with issuance of commitments, is available only for mortgages that are not eligible for Direct Endorsement processing under § 203.5(b) or to the extent required in § 203.3(b)(4), § 203.3(d)(1), or as determined by the Secretary. | |||
| 24:24:2.1.1.2.4.1.79.2 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.3 Approval of mortgagees for Direct Endorsement. | HUD | [57 FR 58345, Dec. 9, 1992, as amended at 60 FR 42758, Aug. 16, 1995; 61 FR 2651, Jan. 26, 1996; 62 FR 20088, Apr. 24, 1997; 62 FR 65182, Dec. 10, 1997] | (a) Direct Endorsement approval. To be approved for the Direct Endorsement program set forth in § 203.5, a mortgagee must be an approved mortgagee meeting the requirements of §§ 202.13, 202.14 or 202.17 and this section. (b) Special requirements. The mortgagee must establish that it meets the following qualifications. (1) The mortgagee has five years of experience in the origination of single family mortgages. The Secretary will approve a mortgagee with less than five years experience in the origination of single family mortgages if a principal officer has had a minimum of five years of managerial experience in the origination of single family mortgages. (2) The mortgagee has on its permanent staff an underwriter that is authorized by the mortgagee to bind the mortgagee on matters involving the origination of mortgages through the Direct Endorsement procedure and that is registered with the Secretary and such registration is maintained with the Secretary. The technical staff may be employees of the mortgagee or may be hired on a fee basis from a roster maintained by the Secretary. The mortgagee shall use appraisers permitted by § 203.5(e). (3) [Reserved] (4) The mortgagee must submit initially 15 mortgages processed in accordance with §§ 203.5 and 203.255. Separate approval is required to originate mortgages under part 206 of this chapter through the Direct Endorsement program unless at least 50 mortgages closed by the mortgagee have been insured under part 206 of this chapter prior to September 15, 1995. Other mortgagees who have not closed at least 50 mortgages under part 206 of this chapter must submit five (5) Home Equity Conversion Mortgages, processed in accordance with §§ 203.3 and 203.255. The documents required by § 203.255 will be reviewed by the Secretary and, if acceptable, commitments will be issued prior to endorsement of the mortgages for insurance. If the underwriting and processing of these 15 mortgages (or the 5 Home Equity Conversion Mortgages) is satisfactory, then the mortgagee may b… | |||
| 24:24:2.1.1.2.4.1.79.3 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.4 Approval of mortgagees for Lender Insurance. | HUD | [62 FR 30226, June 2, 1997, as amended at 62 FR 65182, Dec. 10, 1997; 77 FR 3604, Jan. 25, 2012] | Each mortgagee that chooses to participate in the Lender Insurance program must use the Lender Insurance process to insure all of the mortgages that it underwrites, unless the mortgages are ineligible for the Direct Endorsement program as provided in § 203.5(b), or unless HUD determines that the mortgages are ineligible for the Lender Insurance program. (a) Direct Endorsement approval. To be approved for the Lender Insurance program described in § 203.6, a mortgagee must be unconditionally approved for the Direct Endorsement program as provided in § 203.3. (b) Performance: Claim and default rate. (1) In addition to being unconditionally approved for the Direct Endorsement program, a mortgagee must have had an acceptable claim and default rate (as described in paragraph (b)(3) of this section) for at least 2 years prior to its application for participation in the Lender Insurance program, and must maintain such a claim and default rate in order to retain Lender Insurance approval. (2) HUD may approve a mortgagee that is otherwise eligible for Lender Insurance approval, but has an acceptable claim and default record of less than 2 years, if: (i) The mortgagee is an entity created by a merger, acquisition, or reorganization completed less than 2 years prior to the date of the mortgagee's application for Lender Insurance approval; (ii) One or more of the entities participating in the merger, acquisition, or reorganization had Lender Insurance approval at the time of the merger, acquisition, or reorganization; (iii) All of the lending institutions participating in the merger, acquisition, or reorganization that had Lender Insurance approval at the time of the merger, acquisition, or reorganization had an acceptable claim and default record for the 2 years preceding the mortgagee's application for Lender Insurance approval; and (iv) The claim and default record of the mortgagee derived by aggregating the claims and defaults of the entities participating in the merger, acquisition, or reorganization, for the … | |||
| 24:24:2.1.1.2.4.1.79.4 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.5 Direct Endorsement process. | HUD | [57 FR 58346, Dec. 9, 1992; 58 FR 13537, Mar. 12, 1993, as amended at 59 FR 50463, Oct. 3, 1994; 60 FR 42759, Aug. 16, 1995; 61 FR 36263, July 9, 1996; 62 FR 20088, Apr. 24, 1997; 62 FR 30226, June 2, 1997; 69 FR 43509, July 20, 2004; 77 FR 51469, Aug. 24, 2012] | (a) General. Under the Direct Endorsement program, the Secretary does not review applications for mortgage insurance before the mortgage is executed or issue conditional or firm commitments, except to the extent required by § 203.3(b)(4), § 203.3(d)(1), or as determined by the Secretary. Under this program, the mortgagee determines that the proposed mortgage is eligible for insurance under the applicable program regulations, and submits the required documents to the Secretary in accordance with the procedures set forth in § 203.255. This subpart provides that certain functions shall be performed by the Secretary (or Commissioner), but the Secretary may specify that a Direct Endorsement mortgagee shall perform such an action without specific involvement or approval by the Secretary, subject to statutory limitations. In each case, the Direct Endorsement mortgagee's performance is subject to pre-endorsement and post-endorsement review by the Secretary under § 203.255 (c) and (e). (b) Eligible programs. (1) All single family mortgages authorized for insurance under the National Housing Act must be originated through the Direct Endorsement program, except the following: (i) Mortgages underwritten for insurance by mortgagees that have applied for participation in, and have been approved for, the Lender Insurance program; (ii) Mortgages authorized under sections 203(n), 203(p), 213(d), 221(h), 221(i), 225, 233, 237, 809, or 810 of the National Housing Act, or any other insurance programs announced by Federal Register notice; or (iii) As provided in § 203.1. (2) The provision contained in § 221.55 of this chapter regarding deferred sales to displaced families is not available in the Direct Endorsement program. (c) Underwriter due diligence. A Direct Endorsement mortgagee shall exercise the same level of care which it would exercise in obtaining and verifying information for a loan in which the mortgagee would be entirely dependent on the property as security to protect its investment. Mortgagee procedures t… | |||
| 24:24:2.1.1.2.4.1.79.5 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.6 Lender Insurance process. | HUD | [62 FR 30226, June 2, 1997] | Under the Lender Insurance program, a mortgagee approved for the program conducts its own pre-insurance review, insures the mortgage, and agrees to indemnify HUD in accordance with § 203.255(f). | |||
| 24:24:2.1.1.2.4.1.79.6 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.7 Commitment process. | HUD | [57 FR 58346, Dec. 9, 1992; 58 FR 13537, Mar. 12, 1993, as amended at 62 FR 30226, June 2, 1997] | For single family mortgage programs that are not eligible for Direct Endorsement processing under § 203.5, or for Lender Insurance processing under § 203.6, the mortgagee must submit an application for mortgage insurance in a form prescribed by the Secretary prior to making the mortgage loan. If: (a) A mortgage for a specified property has been accepted for insurance through issuance of a conditional commitment by the Secretary or a certificate of reasonable value by the Department of Veterans Affairs, and (b) A specified mortgagor and all other proposed terms and conditions of the mortgage meet the eligibility requirements for insurance as determined by the Secretary, the Secretary shall approve the application for insurance by issuing a firm commitment setting forth the terms and conditions of insurance. | |||
| 24:24:2.1.1.2.4.1.79.7 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.8 Approval of mortgagees for Direct Endorsement Lender Review and Approval Process (DELRAP). | HUD | [84 FR 41874, Aug. 15, 2019] | (a) General. Each mortgagee that chooses to participate in the review and approval of Condominium Projects, as set forth in § 203.43b, must be granted authority to participate in the Direct Endorsement Lender Review and Approval Process (DELRAP). (b) DELRAP Authority —(1) Eligibility. To be granted DELRAP authority, as described in § 203.43b, a mortgagee must be unconditionally approved for the Direct Endorsement program as provided in § 203.3 and meet the following requirements: (i) Have staff with at least one year of experience in underwriting mortgages on condominiums and/or Condominium Project approval; (ii) Have originated no fewer than 10 condominium loans in projects approved by the Commissioner; (iii) Have an acceptable quality control plan that includes specific provisions related to DELRAP; and (iv) Ensure that staff members that participate in the approval of a Condominium Project using DELRAP authority meet the above requirements in paragraph (b)(1)(i) of this section or are supervised by staff that meet such requirements. (2) Conditional DELRAP Authority. Mortgagees will be granted conditional DELRAP authority upon provision of notice to the Commissioner of the intent to use DELRAP. Mortgagees with conditional DELRAP authority must submit all recommended Condominium Project approvals, denials, and recertifications to FHA for review. If FHA agrees with the mortgagee's recommendation, it will advise the mortgagee that it may proceed with the recommended decision on the Condominium Project. (3) Unconditional DELRAP Authority. Mortgagees will be granted unconditional DELRAP authority after completing at least five (5) DELRAP reviews, or such lower number of DELRAP reviews as HUD may specify, to the satisfaction of HUD, and may then exercise DELRAP authority to approve projects in accordance with requirements of HUD. (c) Reviews. HUD will monitor a mortgagee's performance in DELRAP on an ongoing basis. (1) If the review shows that there are no material deficiencies, subsequent project… | |||
| 24:24:2.1.1.2.4.1.80.10 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.12 Mortgage insurance on proposed or new construction. | HUD | [64 FR 56110, Oct. 15, 1999] | (a) Applicability. This section applies to an application for insurance of a mortgage on a one-to four-family dwelling, unless the mortgage will be secured by a dwelling that: (1) Was completed more than one year before the date of the application for insurance or, under the Direct Endorsement Program, was completed more than one year before the date of the appraisal; or (2) Is being sold to a second or subsequent purchaser. (b) Procedures. (1) Applications for insurance to which this section applies will be processed in accordance with procedures prescribed by the Secretary. These procedures may only provide for endorsement for insurance of a mortgage covering a dwelling that is: (i) Approved under the Direct Endorsement Program or the Lender Insurance Program; or (ii) Located in a subdivision approved by the Rural Housing Service. (2) The mortgagee must submit a signed Builder's Certification of Plans, Specifications and Site (Builder's Certification). The Builder's Certification must be in a form prescribed by the Secretary and must cover: (i) Flood hazards; (ii) Noise; (iii) Explosive and flammable materials storage hazards; (iv) Runway clear zones/clear zones; (v) Toxic waste hazards; (vi) Other foreseeable hazards or adverse conditions (i.e., rock formations, unstable soils or slopes, high ground water levels, inadequate surface drainage, springs, etc.) that may affect the health and safety of the occupants or the structural soundness of the improvements. The Builder's Certification must be provided to the appraiser for reference before the performance of an appraisal on the property. (3) If a builder (or developer) intends to sell five or more properties in a subdivision, an Affirmative Fair Housing Marketing Plan (AFHMP) that meets the requirements of 24 CFR part 200, subpart M must be submitted and approved by HUD no later than the date of the first application for mortgage insurance in that subdivision. Thereafter, applications for insurance on other properties sold by the same builder … | |||
| 24:24:2.1.1.2.4.1.80.11 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.14 Builders' warranty. | HUD | [57 FR 58346, Dec. 9, 1992] | Applications relating to proposed construction must be accompanied by an agreement in form satisfactory to the Secretary, executed by the seller or builder or such other person as the Secretary may require, and agreeing that in the event of any sale or conveyance of the dwelling, within a period of one year beginning with the date of initial occupancy, the seller, builder, or such other person will at the time of such sale or conveyance deliver to the purchaser or owner of such property a warranty in form satisfactory to the Secretary warranting that the dwelling is constructed in substantial conformity with the plans and specifications (including amendments thereof or changes and variations therein which have been approved in writing by the Secretary) on which the Secretary has based on the valuation of the dwelling. Such agreement must provide that upon the sale or conveyance of the dwelling and delivery of the warranty, the seller, builder or such other person will promptly furnish the Secretary with a conformed copy of the warranty establishing by the purchaser's receipt thereon that the original warranty has been delivered to the purchaser in accordance with this section. | |||
| 24:24:2.1.1.2.4.1.80.12 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.15 Certification of appraisal amount. | HUD | [58 FR 41001, July 30, 1993] | An application with respect to insurance of mortgages must be accompanied by an agreement satisfactory to the Commissioner, executed by the seller, builder or such other person as may be required by the Commissioner, whereby the person agrees that before any sale of the dwelling, the person will deliver to the purchaser of the property a written statement, in a form satisfactory to the Commissioner, setting forth the amount of the appraised value of the property as determined by the Commissioner. | |||
| 24:24:2.1.1.2.4.1.80.13 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.16 Certificate and contract regarding use of dwelling for transient or hotel purposes. | HUD | Every application filed with respect to insurance of mortgages on a two-, three-, or four-family dwelling, or a single-family dwelling which is one of a group of 5 or more single-family dwellings held by the same mortgagor, must be accompanied by a contract in form satisfactory to the Commissioner, signed by the proposed mortgagor covenanting and agreeing that so long as the proposed mortgage is insured by the Commissioner the mortgagor will not rent the housing or any part thereof covered by the mortgage for transient or hotel purposes, together with the mortgagor's certification under oath that the housing or any part thereof covered by the proposed mortgage will not be rented for transient or hotel purposes. For the purpose of this subchapter rental for transient or hotel purposes shall mean (a) rental for any period less than 30 days or (b) any rental if the occupants of the housing accommodations are provided customary hotel services such as room service for food and beverages, maid service, furnishing and laundering of linen, and bellboy service. | ||||
| 24:24:2.1.1.2.4.1.80.14 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.16a Mortgagor and mortgagee requirement for maintaining flood insurance coverage. | HUD | [87 FR 70742, Nov. 21, 2022] | (a) In general. (1) The requirements of this section apply if a mortgage is to cover property improvements that: (i) Are located in an area designated by the Federal Emergency Management Agency (FEMA) as a floodplain area having special flood hazards; (ii) Are otherwise determined by the Commissioner to be subject to flood hazard; or (iii) Are not otherwise covered by the flood insurance standard for condominium projects established under § 203.43b(d)(6)(iii) or (i)(1). (2) No mortgage may be insured that covers property improvements located in an area that has been identified by FEMA as an area having special flood hazards unless the community in which the area is situated is participating in the National Flood Insurance Program and flood insurance under the National Flood Insurance Program (NFIP) is available with respect to such property improvements. Such requirement for flood insurance shall be effective one year after the date of notification by FEMA to the chief executive officer of a flood prone community that such community has been identified as having special flood hazards. (3) For purposes of this section, property improvement means a dwelling and related structures/equipment essential to the value of the property and subject to flood damage. (b) Flood insurance obligation. The mortgagor and mortgagee shall be obligated, by a special condition to be included in the mortgage commitment, to obtain and maintain either NFIP flood insurance or private flood insurance coverage on the property improvements. (c) Insurance policy. A mortgagee may accept a flood insurance policy in the form of the standard policy issued under the NFIP or a private flood insurance policy as defined in this section, and the mortgagee shall be named as the loss payee for flood insurance benefits. A mortgagee may determine that a private flood insurance policy meets the definition of private flood insurance in this section, without further review of the policy, if the following statement is included within the policy o… | |||
| 24:24:2.1.1.2.4.1.80.8 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.9 Disclosure regarding interest due upon mortgage prepayment. | HUD | [56 FR 18947, Apr. 24, 1991, as amended at 79 FR 50837, Aug. 26, 2014] | Each mortgagee with respect to a mortgage under this part shall at or before closing with respect to any such mortgage, provide the mortgagor with written notice in a form prescribed by the Commissioner describing any requirements the mortgagor must fulfill upon prepayment of the principal amount of the mortgage to prevent the accrual of any interest on the principal amount after the date of such prepayment. This paragraph shall apply to any mortgage executed after August 22, 1991, and before January 21, 2015. | |||
| 24:24:2.1.1.2.4.1.80.9 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.10 Informed consumer choice for prospective FHA mortgagors. | HUD | [64 FR 29765, June 2, 1999, as amended at 64 FR 34984, June 30, 1999] | (a) Mortgagee to provide disclosure notice. A mortgagee must provide a prospective FHA mortgagor with an informed consumer choice disclosure notice if, in the mortgagees's judgment, the prospective FHA mortgagor may qualify for similar conventional mortgage products offered by the mortgagee. The mortgagee should base this judgment on the mortgagee's initial assessment of the prospective FHA mortgagor's eligibility for a conventional mortgage product. If a mortgagee is unsure about a prospective FHA mortgagor's eligibility for a conventional mortgage product, the mortgagee should provide the prospective FHA mortgagor with an informed consumer choice disclosure notice. (b) Informed consumer choice disclosure notice —(1) Contents of notice. The informed consumer choice disclosure notice must: (i) Provide a one page generic analysis comparing the mortgage costs of an FHA-insured mortgage with the mortgage costs of similar conventional mortgage products offered by the mortgagee that the prospective FHA mortgagor may qualify for; (ii) Provide information about when the requirement to pay FHA mortgage insurance premiums terminates; and (iii) Meet the requirements of section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)). (2) Format of disclosure notice. The informed consumer choice disclosure notice must be provided in a format prescribed by the Commissioner. HUD has prepared a model informed consumer choice disclosure notice that represents this format and that meets the requirements of section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)). The model informed consumer choice disclosure notice contains the minimum elements of an informed consumer choice disclosure notice. These elements must be included in a mortgagee's informed consumer choice disclosure notice. A mortgagee, however, may include additional elements in an informed consumer choice disclosure notice to better reflect the mortgagee's products or to provide information that the mortgagee believes is meaningful and he… | |||
| 24:24:2.1.1.2.4.1.81.15 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.17 Mortgage provisions. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 45 FR 29278, May 2, 1980; 48 FR 28804, June 23, 1983; 49 FR 21319, May 21, 1984; 53 FR 34281, Sept. 6, 1988; 54 FR 39525, Sept. 27, 1989; 57 FR 58347, Dec. 9, 1992; 61 FR 36263, July 9, 1996; 84 FR 41875, Aug. 15, 2019] | (a) Mortgage form. (1) The term “mortgage” as used in this part, except § 203.43c, shall have the meaning given in Section 201 of the National Housing Act, as amended (12 U.S.C. 1707). (2)(i) The mortgage shall be in a form meeting the requirements of the Commissioner. The Commissioner may prescribe complete mortgage instruments. For each case in which the Commissioner does not prescribe complete mortgage instruments, the Commissioner (A) Shall require specific language in the mortgage which shall be uniform for every mortgage, and (B) May also prescribe the language or substance of additional provisions for all mortgages as well as the language or substance of additional provisions for use only in particular jurisdictions or for particular programs. (ii) Each mortgage shall also contain any provisions necessary to create a valid and enforceable secured debt under the laws of the jurisdiction in which the property is located. (b) Mortgage multiples. A mortgage shall involve a principal obligation in a multiple of $1. (c) Payments. The mortgage shall: (1) Come due on the first of the month. (2) Contain complete amortization provisions satisfactory to the Secretary and an amortization period not in excess of the term of the mortgage. (3) Provide for payments to principal and interest to begin not later than the first day of the month following 60 days from the date the mortgage is executed (or the date a construction mortgage is converted to a permanent mortgage, if applicable). (d) Maturity. The mortgage shall have a term of not more than 30 years from the date of the beginning of amortization. (e) Property Standards. The mortgage must be a first lien upon the property that conforms with property standards prescribed by the Commissioner. (f) Disbursement. The entire principal amount of the mortgage must have been disbursed to the mortgagor or to his or her creditors for his or her account and with his or her consent. | |||
| 24:24:2.1.1.2.4.1.81.16 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.18 Maximum mortgage amounts. | HUD | [36 FR 24508, Dec. 22, 1971] | (a) Mortgagors of principal or secondary residences. The principal amount of the mortgage must not exceed the lesser of the following amounts that apply: (1) The dollar amount limitation that applies for the area under section 203(b)(2)(A) of the National Housing Act including any increase in the dollar limitation under § 203.29, as announced in accordance with § 203.18(h); (2)(i) The amount based on appraised value that is permitted by section 203(b)(10) of the National Housing Act, if that provision is in effect and applies to the mortgage; or (ii) If section 203(b)(10) is not in effect or otherwise does not apply to the mortgage, the lesser of the amounts based on appraised value that are permitted by section 203(b)(2)(B) of the National Housing Act and paragraph (g) of this section; (3) An amount equal to 85 percent of the appraised value if the mortgage covers a dwelling that is to be occupied as a secondary residence (as defined in paragraph (f)(2) of this section). (b) Veteran qualifications. The special veteran terms provided in section 203(b)(2) of the National Housing Act shall apply only if the mortgagor submits one of the following certifications: (1) A certification issued by the Secretary of Defense establishing that the veteran performed extra hazardous service while serving in the armed forces for a period of less than 90 days; or (2) A Certificate of Eligibility from the Department of Veterans Affairs establishing that the person served 90 days or more on active duty in the armed forces (U.S. Army, Navy, Marine Corps, Air Force, Coast Guard, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air Force Reserve, the Coast Guard Reserve, the National Guard of the United States, or the Air National Guard of the United States); that he or she enlisted before September 8, 1980; and that he or she was discharged or released under conditions other than dishonorable (a copy of the veteran's discharge papers or Form DD-214 shall be submitted with the certificate); or (3) A Certi… | |||
| 24:24:2.1.1.2.4.1.81.17 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.18a Solar energy system. | HUD | [45 FR 51770, Aug. 5, 1980] | (a) The dollar limitation provided in § 203.18(a) may be increased by up to 20 percent if such an increase is necessary to account for the increased cost of the residence due to the installation of a solar energy system. (b) Solar energy system is defined as any addition, alteration, or improvement to an existing or new structure which is designed to utilize wind energy or solar energy either of the active type based on mechanically forced energy transfer or of the passive type based on convective, conductive, or radiant energy transfer or some combination of these types to reduce the energy requirements of that structure from other energy sources and which is in conformity with such criteria and standards as shall be prescribed by the Secretary in consultation with the Secretary of Energy. | |||
| 24:24:2.1.1.2.4.1.81.18 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.18b Increased mortgage amount. | HUD | [45 FR 76377, Nov. 18, 1980, as amended at 47 FR 917, Jan. 7, 1982; 49 FR 12697, Mar. 30, 1984; 49 FR 14338, Apr. 11, 1984; 53 FR 8880, Mar. 18, 1988; 56 FR 18947, Apr. 24, 1991; 58 FR 41002, July 30, 1993; 59 FR 13882, Mar. 24, 1994; 60 FR 16033, Mar. 28, 1995] | (a) If any party believes that a mortgage limit established by the Secretary under § 203.18(a)(1) does not accurately reflect the median house prices in an area, the party may submit documentation in support of an alternative mortgage limit. For purposes of this section, an area (1) must be at least the size of a county, whether or not the area is located within a metropolitan statistical area, as established by the Office of Management and Budget; and (2) may be an area for which the mortgage limits established under § 203.18(b)(1) apply. (b)(1) The documentation referred to in paragraph (a) of this section must consist of sufficient housing sales price data for the entire geographic area for which the request is made to justify an alternative mortgage limit. The documentation should include a listing of actual sales prices in the area for all or nearly all new and existing 1-family homes and condominiums, over a period of time varies with sales volume, as follows: (i) For 500 or more sales per month, a one-month reporting period; (ii) For 250 through 499 sales per month, a two-month reporting period. (iii) For less than 250 sales per month, a three-month reporting period. The listing should contain a brief address for each property, its county location, its sale price, the month and year of its sale, and whether it is new or existing. In areas where the ratio of existing sales to new sales is three-to-one or greater, an increase in the mortgage limit may be based on 95 percent of the average of the new and the existing median sales prices. In these areas, the documentation referred to in this paragraph may also include separate median sales prices for both the new and existing homes. (2) Requests for an increased mortgage limit based upon documentation of median house prices for the area should be sent to the appropriate HUD field office. (c) In the case of an area where the Commissioner determines that the median one-family house price does not reasonably reflect the sales prices of newly constructed ho… | |||
| 24:24:2.1.1.2.4.1.81.19 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.18c One-time or up-front mortgage insurance premium excluded from limitations on maximum mortgage amounts. | HUD | [57 FR 15211, Apr. 24, 1992] | After determining any maximum insurable mortgage amount under the provisions of this subpart, the maximum insurable amount of any mortgage may be increased by the amount of any one-time or up-front mortgage insurance premium that will be financed as part of the mortgage. | |||
| 24:24:2.1.1.2.4.1.81.20 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.18d Minimum principal loan amount. | HUD | [53 FR 8880, Mar. 18, 1988] | A mortgagee may not require, as a condition of providing a loan secured by a mortgage insured under this part, that the principal amount of the mortgage exceed a minimum amount established by the mortgagee. | |||
| 24:24:2.1.1.2.4.1.81.21 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.19 Qualified mortgage. | HUD | [78 FR 75237, Dec. 11, 2013] | (a) Definitions. As used in this section: (1) Average prime offer rate means an annual percentage rate that is derived from average interest rates, points, and other loan pricing terms currently offered to mortgagors by a representative sample of mortgagees for mortgage transactions that have low-risk pricing characteristics as published by the Consumer Financial Protection Bureau (CFPB) from time to time in accordance with the CFPB's regulations at 12 CFR 1026.35, pertaining to prohibited acts or practices in connection with higher-priced mortgage loans. (2) Annual percentage rate is the measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the mortgagor to the amount and timing of payments made and is the rate required to be disclosed by the mortgagee under 12 CFR 1026.18, pertaining to disclosure of finance charges for mortgages. (3) Points and fees has the meaning given to “points and fees” in 12 CFR 1026.32(b)(1) as of January 10, 2014. Any changes made by the CFPB to the points and fees definition may be adopted by HUD through publication of a notice and after providing FHA-approved mortgagees with time, as may be determined necessary, to implement. (b) Qualified mortgage —(1) Limit. For a single family mortgage to be insured under title II of the National Housing Act (12 U.S.C. 1701 et seq. ), except for mortgages for manufactured housing and mortgages under paragraph (c) of this section, the total points and fees payable in connection with a loan used to secure a dwelling shall not exceed the CFPB's limit on points and fees for qualified mortgage in its regulations at 12 CFR 1026.43(e)(3) as of January 10, 2014. Any changes made by the CFPB to the limit on points and fees may be adopted by HUD through publication of a notice and after providing FHA-approved mortgagees with time, as may be determined necessary, to implement. (2) Rebuttable presumption qualified mortgage. (i) A single family mortgage insured under title II of th… | |||
| 24:24:2.1.1.2.4.1.81.22 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.20 Agreed interest rate. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 49 FR 19457, May 8, 1984] | (a) The mortgage shall bear interest at the rate agreed upon by the mortgagee and the mortgagor. (b) Interest shall be payable in monthly installments on the principal amount of the mortgage outstanding on the due date of each installment. | |||
| 24:24:2.1.1.2.4.1.81.23 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.21 Amortization provisions. | HUD | The mortgage must contain complete amortization provisions satisfactory to the Commissioner, requiring monthly payments by the mortgagor not in excess of his reasonable ability to pay as determined by the Commissioner. The sum of the principal and interest payments in each month shall be substantially the same. | ||||
| 24:24:2.1.1.2.4.1.81.24 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.22 Payment of insurance premiums or charges; prepayment privilege. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 37 FR 8661, Apr. 29, 1972; 48 FR 28804, June 23, 1983; 50 FR 25914, June 24, 1985; 61 FR 36263, July 9, 1996; 79 FR 50837, Aug. 26, 2014] | (a) Payment of periodic insurance premiums or charges. Except with respect to mortgages for which a one-time mortgage insurance premium is paid pursuant to § 203.280, the mortgage may provide for monthly payments by the mortgagor to the mortgagee of an amount equal to one-twelfth of the annual mortgage insurance premium payable by the mortgagee to the Commissioner. Such payments continue only so long as the contract of insurance shall remain in effect or for such shorter period as mortgage insurance premiums are payable by the mortgagee to the Commissioner. (b) Prepayment privilege. The mortgage shall contain a provision permitting the mortgagor to prepay the mortgage in whole or in part at any time and in any amount. The mortgage shall not provide for the payment of any charge on account of such prepayment. | |||
| 24:24:2.1.1.2.4.1.81.25 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.23 Mortgagor's payments to include other charges. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 37 FR 25231, Nov. 29, 1972; 41 FR 47934, Nov. 10, 1976; 59 FR 53901, Oct. 26, 1994] | (a) The mortgage shall provide for such equal monthly payments by the mortgagor to the mortgagee as will amortize: (1) The ground rents, if any; (2) The estimated amount of all taxes; (3) Special assessments, if any; (4) Flood insurance premiums, if flood insurance is required by the Commissioner; and (5) Fire and other hazard insurance premiums, if any. The mortgage shall further provide that such payments shall be held by the mortgagee in a manner satisfactory to the Commissioner for the purpose of paying such ground rents, taxes, assessments, and insurance premiums before the same become delinquent, for the benefit and account of the mortgagor. The mortgage must also make provisions for adjustments in case the estimated amount of such taxes, assessments, and insurance premiums shall prove to be more, or less, than the actual amount thereof so paid by the mortgagor. Such payments shall be held in an escrow subject to § 203.550. (b) The mortgagor shall not be required to pay premiums for fire or other hazard insurance which protects only the interests of the mortgagee, or for life or disability income insurance, or fees charged for obtaining information necessary for the payment of property taxes. The foregoing does not apply to charges made or penalties exacted by the taxing authority, except that a penalty assessed or interest charged by a taxing authority for failure to timely pay taxes or assessments shall not be charged by the mortgagee to the mortgagor if the mortgagee had sufficient funds in escrow for the account of the mortgagor to pay such taxes or assessments prior to the date on which penalty or interest charges are imposed. (c) Mortgages involving a principal obligation not in excess of $9,000 may contain a provision requiring the mortgagor to pay to the mortgagee an annual service charge at such rate as may be agreed upon between the mortgagee and the mortgagor, but in no case shall such service charge exceed one-half of one percent per annum. Any such service charge shall be payable in mont… | |||
| 24:24:2.1.1.2.4.1.81.26 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.24 Application of payments. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 37 FR 25231, Nov. 29, 1972; 50 FR 25914, June 24, 1985; 61 FR 36263, July 9, 1996] | (a) All monthly payments to be made by the mortgagor to the mortgagee shall be added together and the aggregate amount thereof shall be paid by the mortgagor each month in a single payment. The mortgagee shall apply the same to the following items in the order set forth: (1) Premium charges under the contract of insurance (other than a one-time or up-front mortgage insurance premium paid in accordance with §§ 203.280, 203.284 and 203.285), charges for ground rents, taxes, special assessments, flood insurance premiums, if required, and fire and other hazard insurance premiums; (2) Interest on the mortgage; (3) Amortization of the principal of the mortgage; and (4) Late charges, if permitted under the terms of the mortgage and subject to such conditions as the Commissioner may prescribe. (b) Any deficiency in the amount of any such aggregate monthly payment shall, unless made good by the mortgagor prior to, or on, the due date of the next such payment, constitute an event of default under the mortgage. | |||
| 24:24:2.1.1.2.4.1.81.27 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.25 Late charge. | HUD | [41 FR 49734, Nov. 10, 1976] | The mortgage may provide for the collection by the mortgagee of a late charge, not to exceed four per cent of the amount of each payment more than 15 days in arrears, to cover servicing and other costs attributable to the receipt of payments from mortgagors after the date upon which payment is due. | |||
| 24:24:2.1.1.2.4.1.81.28 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.26 Mortgagor's payments when mortgage is executed. | HUD | [41 FR 49734, Nov. 10, 1976, as amended at 48 FR 28804, June 23, 1983] | (a) The mortgagor must pay to the mortgagee, upon execution of the mortgage, a sum that will be sufficient to pay the ground rents, if any, the estimated taxes, special assessments, flood insurance premiums, if required, and fire and other hazard insurance premiums for the period beginning on the last date on which each such charge would have been paid under the normal lending practices of the lender and local custom (if each such date constitutes prudent lending practice), and ending on the due date of the first full installment payment under the mortgage, plus an amount sufficient to pay the mortgage insurance premium from the date of closing the loan to the date of the first monthly payment under the mortgage or, where applicable, the one-time mortgage insurance premium payable pursuant to § 203.280. (b) The mortgagee may also collect from the mortgagor a sum not exceeding one-sixth of the estimated total amount of such taxes, special assessments, insurance premiums and other charges to be paid during the ensuing 12-month period. | |||
| 24:24:2.1.1.2.4.1.81.29 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.27 Charges, fees or discounts. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 43 FR 19846, May 9, 1978; 45 FR 30602, May 8, 1980; 45 FR 33966, May 21, 1980; 47 FR 29525, July 7, 1982; 48 FR 11940, Mar. 22, 1983; 48 FR 28804, June 23, 1983; 49 FR 19457, May 8, 1984; 57 FR 58347, Dec. 9, 1992; 58 FR 13537, Mar. 12, 1993; 73 FR 68239, Nov. 17, 2008] | (a) The mortgagee may collect from the mortgagor the following charges, fees or discounts: (1) [Reserved] (2) A charge to compensate the mortgagee for expenses incurred in originating and closing the loan, provided that the Commissioner may establish limitations on the amount of any such charge. (3) Reasonable and customary amounts, but not more than the amount actually paid by the mortgagee, for any of the following items: (i) Recording fees and recording taxes or other charges incident to recordation; (ii) Credit Report; (iii) Survey, if required by mortgagee or mortgagor; (iv) Title examination; title insurance, if any; (v) Fees paid to an appraiser or inspector approved by the Commissioner for the appraisal and inspection, if required, of the property. Notwithstanding any limitations in this paragraph (a)(3) if the mortgagee is permitted by applicable regulations to use the services of staff appraisers and inspectors for processing mortgages, and does so, the mortgagee may collect from the mortgagor the reasonable and customary amounts for such appraisals and inspections. (vi) Such other reasonable and customary charges as may be authorized by the Commissioner. (4) Reasonable and customary charges in the nature of discounts. (5) Interest from the date of closing or the date on which the mortgagee disburses the mortgage proceeds to the account of the mortgagor or the mortgagor's creditors, whichever is later, to the date of the beginning of amortization. (b)-(c) [Reserved] (d) Before the insurance of any mortgage, the mortgagee shall furnish to the Secretary a signed statement in a form satisfactory to the Secretary listing any charge, fee or discount collected by the mortgagee from the mortgagor. All charges, fees or discounts are subject to review by the Secretary both before and after endorsement under § 203.255. (e) Nothing in this section will be construed as prohibiting the mortgagor from dealing through a broker who does not represent the mortgagee, if he prefers to do so, and paying suc… | |||
| 24:24:2.1.1.2.4.1.81.30 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.28 Economic soundness of projects. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 42 FR 57434, Nov. 2, 1977; 45 FR 33966, May 21, 1980; 53 FR 8880, Mar. 18, 1988] | The mortgage must be executed with respect to a project which, in the opinion of the Commissioner, is economically sound, except that this section shall not apply in each of the following instances: (a) To a mortgage of the character described in § 203.18(d) and with respect to such a mortgage, the Commissioner shall determine that the mortgage is an acceptable risk giving consideration to the need for providing adequate housing for families of low and moderate income, particularly in suburban and outlying areas or small communities. (b) To a mortgage of the character described in § 203.18 (e). (c) To a mortgage of the character described in § 203.43a. (d) To a mortgage in a federally impacted area described in § 203.43e. (e) To a rehabilitation loan of the character described in § 203.50. | |||
| 24:24:2.1.1.2.4.1.81.31 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.29 Eligible mortgages in Alaska, Guam, Hawaii, or the Virgin Islands. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 49 FR 14338, Apr. 11, 1984; 55 FR 34804, Aug. 24, 1990; 56 FR 18948, Apr. 24, 1991; 64 FR 14569, Mar. 25, 1999] | (a) When is an increased mortgage limit permitted for these areas? For Alaska, Guam, Hawaii or the Virgin Islands, the Commissioner may increase the maximum mortgage amount permitted by section 203(b)(2)(A) of the National Housing Act when authorized by section 214 of that Act, through the procedures described in § 203.18(h). (b) If a party believes that the otherwise applicable mortgage limit needs to be increased to reflect the extent to which high costs make it infeasible to construct dwellings without sacrificing sound standards of construction, design or livability, the party may submit documentation in support of an alternative mortgage limit. This documentation should include actual or estimated costs of such items as design, construction, materials, and labor. In addition, actual sales prices of new homes may be submitted, together with any other documentation requested by the Commissioner. Requests for alternative mortgage limits, together with supporting documentation should be sent to the appropriate HUD field office. The field office will forward the request and supporting material, with the field office's recommendation, to the Commissioner for determination. (c) If the Alaska Housing Authority, or the Government of Guam, Hawaii, or the Virgin Islands or any agency or instrumentality of those entities, is the mortgagor or the mortgagee, or the mortgagor is regulated or restricted as to rents or sales, charges, capital structure, rate of return, and methods of operation to such an extent and in such manner as the Commissioner determines advisable to provide reasonable rental and sales prices and a reasonable return on the investment, any mortgage otherwise eligible for insurance under this subpart may be insured: (1) In any case where the Alaska Housing Authority, or the government of Guam, Hawaii, the Virgin Islands, or any agency or instrumentality of those entities, is the mortgagor, without regard to any requirement that the mortgagor occupy the dwelling as a principal residence or a secondar… | |||
| 24:24:2.1.1.2.4.1.81.32 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.30 Certificate of nondiscrimination by the mortgagor. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 57 FR 58347, Dec. 9, 1992; 61 FR 36264, July 9, 1996] | The mortgagor shall certify to the Commissioner as to each of the following points: (a) That neither he, nor anyone authorized to act for him, will refuse to sell or rent, after the making of a bonafide offer, or refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny the dwelling or property covered by the mortgage to any person because of race, color, religion, national origin, familial status (except as provided by law), or handicap. (b) That any restrictive covenant on such property relating to race, color, religion, or national origin is recognized as being illegal and void and is hereby specifically disclaimed. (c) That civil action for preventative relief may be brought by the Attorney General in any appropriate U.S. District Court against any person responsible for a violation of this certification. (d) That buildings having four (4) or more units, which were built for first occupancy after March 13, 1991, were constructed in compliance with the Fair Housing Act new construction requirements in 24 CFR 100.205. | |||
| 24:24:2.1.1.2.4.1.81.33 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.31 Mortgagor of a principal residence in military service cases. | HUD | [55 FR 34804, Aug. 24, 1990] | (a) A mortgage that is otherwise eligible for insurance under any of the provisions of this part may be insured without regard to any requirement contained in this part that the mortgagor occupy the dwelling as a principal residence (as defined in § 203.18(f)(1)) at the time of insurance, or that the mortgagor meet loan-to-value or comparable limitations based on the failure of the mortgagor to meet an occupancy requirement, if: (1) The Commissioner is satisfied that the inability of the mortgagor to meet the occupancy requirement is by reason of his or her entry into military service after the filing of an application for insurance; and (2) The mortgagor expresses an intent (in such form as the Commissioner may prescribe), to meet the occupancy requirement upon his or her discharge from the service. (b) A serviceperson will also be considered to meet the occupancy requirement referred to in paragraph (a) of this section for mortgage insurance purposes, if the following conditions are satisfied: (1) The serviceperson and his or her family expect to meet the occupancy requirement referred to in paragraph (a) of this section for two or more years. The Commissioner may shorten this period to one year, if (i) the serviceperson's family will occupy the property for at least one year and (ii) the serviceperson is assigned to a combat zone or other hazardous duty area where the family cannot accompany him or her; and (2) The property is located in an area in which the prospects of resale are reasonable. | |||
| 24:24:2.1.1.2.4.1.82.34 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.32 Mortgage lien. | HUD | [45 FR 19223, Mar. 25, 1980, as amended at 50 FR 20906, May 21, 1985; 56 FR 4477, Feb. 4, 1991; 58 FR 42647, Aug. 11, 1993] | (a) Except as otherwise provided in this section, a mortgagor must establish that, after the mortgage offered for insurance has been recorded, the mortgaged property will be free and clear of all liens other than such mortgage, and that there will not be outstanding any other unpaid obligations contracted in connection with the mortgage transaction or the purchase of the mortgaged property, except obligations that are secured by property or collateral owned by the mortgagor independently of the mortgaged property. (b) With prior approval of the Secretary, the mortgaged property may be subject to a secondary mortgage or loan made or insured, or other secondary lien held, by a Federal, State, or local government agency or instrumentality, or an entity designated in the homeownership plan submitted by an applicant for an implementation grant under the Homeownership and Opportunity for People Everywhere (HOPE) program, or an eligible nonprofit organization as defined in § 203.41(a)(5) of this part, provided that the required monthly payments under the insured mortgage and the secondary mortgage or lien shall not exceed the mortgagor's reasonable ability to pay as determined by the Secretary. (c) With the prior approval of the Secretary, the mortgaged property may be subject to a second mortgage held by a mortgagee not described in paragraph (b) of this section. Unless the mortgage is for the purpose described in paragraph (d) of this section, it shall meet the following requirements: (1) The required monthly payments under the insured mortgage and the second mortgage shall not exceed the mortgagor's reasonable ability to pay, as determined by the Commissioner; (2) Periodic payments, if any, shall be collected monthly and be substantially the same; (3) The sum of the principal amount of the insured mortgage and the second mortgage shall not exceed the loan-to-value limitation applicable to the insured mortgage, and shall not exceed the maximum mortgage limit for the area; (4) The repayment terms shall not provid… | |||
| 24:24:2.1.1.2.4.1.82.35 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.33 Relationship of income to mortgage payments. | HUD | [37 FR 16390, Aug. 12, 1972, as amended at 54 FR 38649, Sept. 20, 1989; 59 FR 59648, Nov. 18, 1994; 77 FR 5675, Feb. 3, 2012] | (a) Adequacy of mortgagor's gross income. A mortgagor must establish, to the satisfaction of the Secretary, that his or her gross income is and will be adequate to meet (1) the periodic payments required by the mortgage submitted for insurance and (2) other long-term obligations. (b) Determinations of adequacy of mortgagor income under this section shall be made in a uniform manner without regard to race, color, religion, sex, national origin, familial status, handicap, marital status, actual or perceived sexual orientation, gender identity, source of income of the mortgagor, or location of the property. | |||
| 24:24:2.1.1.2.4.1.82.36 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.34 Credit standing. | HUD | A mortgagor must have a general credit standing satisfactory to the Commissioner. | ||||
| 24:24:2.1.1.2.4.1.82.37 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.35 Disclosure and verification of Social Security and Employer Identification Numbers. | HUD | [54 FR 39693, Sept. 27, 1989] | To be eligible for mortgage insurance under this part, the mortgagor must meet the requirements for the disclosure and verification of Social Security and Employer Identification Numbers, as provided by part 200, subpart U, of this chapter. | |||
| 24:24:2.1.1.2.4.1.82.38 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.36 [Reserved] | HUD | |||||
| 24:24:2.1.1.2.4.1.83.39 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.37 Nature of title to realty. | HUD | [49 FR 21319, May 21, 1984] | A mortgage, to be eligible for insurance, must be on real estate held in fee simple, or on leasehold under a lease for not less than 99 years which is renewable, or under a lease having a period of not less than 10 years to run beyond the maturity date of the mortgage. | |||
| 24:24:2.1.1.2.4.1.83.40 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.37a Sale of property. | HUD | [68 FR 23375, May 1, 2003, as amended at 69 FR 77116, Dec. 23, 2004; 71 FR 33142, June 7, 2006] | (a) Sale by owner of record —(1) Owner of record requirement. To be eligible for a mortgage insured by FHA, the property must be purchased from the owner of record and the transaction may not involve any sale or assignment of the sales contract. (2) Supporting documentation. The mortgagee shall obtain documentation verifying that the seller is the owner of record and must submit this documentation to HUD as part of the application for mortgage insurance, in accordance with § 203.255(b)(12). This documentation may include, but is not limited to, a property sales history report, a copy of the recorded deed from the seller, or other documentation (such as a copy of a property tax bill, title commitment, or binder) demonstrating the seller's ownership. (b) Time restrictions on re-sales —(1) General. The eligibility of a property for a mortgage insured by FHA is dependent on the time that has elapsed between the date the seller acquired the property (based upon the date of settlement) and the date of execution of the sales contract that will result in the FHA mortgage insurance (the re-sale date). The mortgagee shall obtain documentation verifying compliance with the time restrictions described in this paragraph and must submit this documentation to HUD as part of the application for mortgage insurance, in accordance with § 203.255(b). (2) Re-sales occurring 90 days or less following acquisition. If the re-sale date is 90 days or less following the date of acquisition by the seller, the property is not eligible for a mortgage to be insured by FHA. (3) Re-sales occurring between 91 days and 180 days following acquisition. (i) If the re-sale date is between 91 days and 180 days following acquisition by the seller, the property is generally eligible for a mortgage insured by FHA. (ii) However, HUD will require that the mortgagee obtain additional documentation if the re-sale price is 100 percent over the purchase price. Such documentation must include an appraisal from another appraiser. The mortgagee ma… | |||
| 24:24:2.1.1.2.4.1.83.41 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.38 Location of dwelling. | HUD | [61 FR 36264, July 9, 1996] | At the time a mortgage is insured there must be located on the mortgaged property one or more dwellings designed principally for residential use for not more than four families. | |||
| 24:24:2.1.1.2.4.1.83.42 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.39 Standards for buildings. | HUD | The buildings on the mortgaged property must conform with the standards prescribed by the Commissioner. | ||||
| 24:24:2.1.1.2.4.1.83.43 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.40 Location of property. | HUD | [49 FR 12697, Mar. 30, 1984, as amended at 61 FR 36264, July 9, 1996] | The mortgaged property shall be located within the United States, Puerto Rico, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, and American Samoa. The mortgaged property, if otherwise acceptable to the Commissioner, may be located in any community where the housing standards meet the requirements of the Commissioner. | |||
| 24:24:2.1.1.2.4.1.83.44 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.41 Free assumability; exceptions. | HUD | [58 FR 42648, Aug. 11, 1993; 59 FR 15112, Mar. 31, 1994] | (a) Definitions. As used in this section: (1) Low- or moderate-income housing means housing which is designed to be affordable, taking into account available financing, to individuals or families whose household income does not exceed 115 percent of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families. The Secretary may approve a higher percentage up to 140 percent. (2) Eligible governmental or nonprofit program means a program operated pursuant to a program established by Federal law, operated by a State or local government, or operated by an eligible nonprofit organization, if the program is designed to assist the purchase of low-or moderate-income housing including rental housing. (3) Legal restrictions on conveyance means any provision in any legal instrument, law or regulation applicable to the mortgagor or the mortgaged property, including but not limited to a lease, deed, sales contract, declaration of covenants, declaration of condominium, option, right of first refusal, will, or trust agreement, that attempts to cause a conveyance (including a lease) made by the mortgagor to: (i) Be void or voidable by a third party; (ii) Be the basis of contractual liability of the mortgagor for breach of an agreement not to convey, including rights of first refusal, pre-emptive rights or options related to mortgagor efforts to convey; (iii) Terminate or subject to termination all or a part of the interest held by the mortgagor in the mortgaged property if a conveyance is attempted; (iv) Be subject to the consent of a third party; (v) Be subject to limits on the amount of sales proceeds retainable by the seller; or (vi) Be grounds for acceleration of the insured mortgage or increase in the interest rate. (4) Tax-exempt bond financing means financing which is funded in whole or in part by the proceeds of qualified mortgage bonds described in section 143 of the Internal Revenue code of 1986, or any successor section, on which the interest is ex… | |||
| 24:24:2.1.1.2.4.1.83.45 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.42 Rental properties. | HUD | [56 FR 27692, June 17, 1991, as amended at 61 FR 36264, July 9, 1996] | (a) A mortgage on property upon which there is a dwelling to be rented by the mortgagor shall not be eligible for insurance if the property is a part of, or adjacent or contiguous to, a project, or group of similar rental properties, in which the mortgagor has a financial interest in eight or more dwelling units. (b) Paragraph (a) of this section shall not apply where: (1) A mortgage qualifies as a rehabilitation loan under § 203.50 of this part; (2) The mortgage is to be used for the rehabilitation of property located in a specific area or neighborhood that has been targeted by a State or local government for redevelopment, in accordance with a specific program that involves substantial public or private commitments in support of neighborhood improvement or redevelopment; and (3) The State or local government has approved, and has submitted to the Commissioner a plan describing the program of neighborhood redevelopment and revitalization, including the geographic area targeted for redevelopment, and the nature and proportion of public or private commitments that have been made in support of the redevelopment program. (c) No two-, three-, or four-family dwelling, and no single-family dwelling, if it is part of a group of five or more single-family dwellings held by the same mortgagor, or any part or unit thereof, shall be rented or offered for rent for transient or hotel purposes, as defined in § 203.16, so long as the dwelling is subject to any insured mortgage. | |||
| 24:24:2.1.1.2.4.1.83.46 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43 Eligibility of miscellaneous type mortgages. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 45 FR 30602, May 8, 1980; 47 FR 29525, July 7, 1982; 52 FR 4139, Feb. 10, 1987; 52 FR 37287, Oct. 6, 1987; 52 FR 44861, Nov. 23, 1987; 53 FR 8880, Mar. 18, 1988; 55 FR 34805, Aug. 24, 1990; 55 FR 38033, Sept. 14, 1990; 61 FR 36264, July 9, 1996] | (a) A mortgage which meets the requirements of this subpart, except as modified by this section, shall be eligible for insurance under this subpart subject to compliance with the additional requirements of this section. (b) The mortgage may be accepted for insurance if: (1) Executed in connection with the sale by the Government, or any agency or official thereof, of any housing acquired or constructed under Public Law 849, Seventy-sixth Congress, as amended; Public Law 781, Seventy-sixth Congress, as amended; or Public Law 9, 73 or 353, Seventy-seventh Congress, as amended (including any property acquired, held or constructed in connection with such housing or to serve the inhabitants thereof); or (2) Executed in connection with the sale by the Public Housing Administration, or by any public housing agency with the approval of the said Administration, or any housing (including any property acquired, held or constructed in connection with such housing or to serve the inhabitants thereof) owned or financially assisted pursuant to the provisions of Public Law 671, Seventy-sixth Congress; or (3) Executed in connection with the sale by the Government, or any agency or official thereof, or any of the so-called Greenbelt towns, or parts thereof, including projects, or parts thereof, known as Greenhills, OH; Greenbelt, MD; and Greendale, WI, developed under the Emergency Relief Appropriation Act of 1935; or of any of the village properties or employee's housing under the jurisdiction of the Tennessee Valley Authority; or of any housing under the jurisdiction of the Department of the Interior located within the town area of Coulee Dam, WA, acquired by the United States for the construction, operation, and maintenance of Grand Coulee Dam and its appurtenant works or of any permanent housing under the jurisdiction of the Department of the Interior constructed under the Boulder Canyon Project Act of December 21, 1928, as amended and supplemented, located within the Boulder City municipal area; or (4) Executed in connect… | |||
| 24:24:2.1.1.2.4.1.83.47 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43a Eligibility of mortgages covering housing in certain neighborhoods. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 55 FR 18493, May 2, 1990] | (a) A mortgage financing the repair, rehabilitation, construction, or purchase of property located in an older declining urban area shall be eligible for insurance under this subpart subject to compliance with the additional requirements of this section. (b) The mortgage shall meet all of the requirements of this subpart, except such requirements as are judged to be not applicable on the basis of the following determinations to be made by the Commissioner: (1) That the conditions of the area in which the property is located prevent the application of certain eligibility requirements of this subpart. (2) That the area is reasonably viable, and there is a need in the area for adequate housing for families of low and moderate income. (3) That the mortgage to be insured is an acceptable risk. (c) Mortgages complying with the requirements of this section shall be insured under this subpart pursuant to section 223(e) of the National Housing Act. Such mortgages shall be insured under and be the obligation of the Special Risk Insurance Fund. (d) For restrictions against approving mortgage insurance for a certain category of newly legalized alien, see 24 CFR part 49. | |||
| 24:24:2.1.1.2.4.1.83.48 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43b Eligibility of mortgages on single-family condominium units. | HUD | [84 FR 41875, Aug. 15, 2019] | (a) Definitions. As used in this part: (1) Condominium Association (Association) means the organization, regardless of its formal legal name that consists of homeowners within a Condominium Project for the purpose of managing the financial and common-area assets. (2) Condominium Project means the project in which one-family dwelling units are attached, semi-detached, detached, or manufactured housing units, and in which owners hold an undivided interest in the Common Elements. (3) Condominium Unit means real estate consisting of a one-family dwelling unit in a Condominium Project. (4) Common Elements means the Condominium Project's common areas and facilities including: Underlying land and buildings, driveways, parking areas, elevators, outside hallways, recreation and landscaped areas, and other elements described in the condominium declaration. (5) Rental for Transient or Hotel Purposes shall have the meaning given in section 513(e) of the National Housing Act (12 U.S.C. 1731b(e)). (6) Single-Unit Approval means approval of one unit in an unapproved Condominium Project under paragraph (i) of this section. (7) Site Condominium means: (i) A Condominium Project that consists entirely of single-family detached dwellings that have no shared garages or any other attached buildings; or (ii) A Condominium Project that: (A) Consists of single family detached or horizontally attached (townhouse) dwellings where the unit consists of the dwelling and land; and (B) Is encumbered by a declaration of condominium covenants or condominium form of ownership and does not contain any manufactured housing units. (b) Eligibility. A mortgage secured by a Condominium Unit shall be eligible for insurance under section 203 of the National Housing Act if it meets the requirements of this subpart, except as modified by this section. (c) Approval required. To be eligible for insurance under this section, a Condominium Unit must be located in a Condominium Project approved by HUD or a DELRAP mortgagee approv… | |||
| 24:24:2.1.1.2.4.1.83.49 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43c Eligibility of mortgages involving a dwelling unit in a cooperative housing development. | HUD | [42 FR 40431, Aug. 10, 1977, as amended at 45 FR 29278, May 2, 1980; 45 FR 76377, Nov. 18, 1980; 48 FR 12085, Mar. 23, 1983; 48 FR 28804, June 23, 1983; 49 FR 23584, June 6, 1984; 52 FR 48201, Dec. 21, 1987; 53 FR 8881, Mar. 18, 1988; 53 FR 9869, Mar. 28, 1988; 53 FR 34282, Sept. 6, 1988; 56 FR 24631, May 30, 1991; 58 FR 41002, July 30, 1993] | A mortgage involving a dwelling unit in a cooperative housing development which meets the requirements of this subpart, except as modified by this section, shall be eligible for insurance under section 203(n) of the National Housing Act. (a) The provisions of §§ 203.16a, 203.17, 203.18, 203.18a, 203.23, 203.24, 203.26, 203.37, 203.38, 203.43h, 203.43i, 203.43j, 203.44, 203.49, and 203.50 of this part do not apply to mortgages insured under section 203(n) of the National Housing Act. (b) As used in connection with the insurance of mortgages under this section and § 203.437 of this part: (1) The term mortgage shall mean a first lien given to secure a loan made to finance the unpaid purchase price of a Corporate Certificate together with the applicable Occupancy Certificate of a cooperative ownership housing corporation in which the permanent occupancy of the dwelling units is restricted to members of such corporation, and may refer both to a security instrument creating a lien, whether called a mortgage, deed of trust, security deed or another term used in a particular jurisdiction, as well as the credit instrument, or note, secured thereby. (2) Corporation shall mean an organization which holds title to a cooperative housing development which is covered by a blanket mortgage or mortgages insured by FHA under the National Housing Act. (3) Corporate Certificate shall mean such stock certificates, membership certificates, or other instruments which the laws of the jurisdictions in which the cooperative housing development is located require to evidence ownership of a specified interest in the corporation. (4) Occupancy Certificate shall mean a written instrument provided by the corporation to each holder of a Corporate Certificate which grants an exclusive right of possession of a specific dwelling unit in the cooperative housing development. (5) References in this subpart to a dwelling, residence or property which is sold, conveyed, covered by a mortgage or subject to a lien shall be construed to mea… | |||
| 24:24:2.1.1.2.4.1.83.50 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43d Eligibility of mortgages in certain communities. | HUD | [42 FR 57434, Nov. 2, 1977, as amended at 55 FR 34805, Aug. 24, 1990] | Notwithstanding any other requirements of this subpart, a mortgage covering a one- to four-family dwelling occupied by the mortgagor as a principal residence (as defined in § 203.18(f)(1)) is eligible for insurance if the following requirements are met: (a) The property is located in a community where the Secretary determines that: (1) Temporary adverse economic conditions exist throughout the community as a direct and primary result of outstanding claims to ownership of land in the community by an American Indian tribe, band, or Nation; (2) Such ownership claims are reasonably likely to be settled, by court action or otherwise; (3) As a direct result of the community's temporarily impaired economic condition, owners of homes in the community occupied as principal residences (as defined in § 203.18(f)(1)) have been involuntarily unemployed or underemployed and have, thus, incurred substantial reductions in income that significantly impair their ability to continue timely payment of their mortgages; (4) As a result, widespread mortgage foreclosures and distress sales of homes are likely in the community; and (5) Fifty or more individuals were joined as parties defendant or were members of a defendant class prior to December 31, 1976 in litigation involving claims to ownership of land in the community by an American Indian tribe, band or Nation. (b) The mortgagor, as a direct result of the community's temporarily impaired economic condition, has been involuntarily unemployed or underemployed and has thus incurred a substantial reduction in income which significantly impairs the owners ability to continue timely payment of the mortgage. (c) The mortgagee certifies that the security instrument has been recorded and is a good and valid first lien on the property except for the claims specified in paragraph (a)(1) of this section. (d) The mortgagee agrees upon insurance of the mortgage to assign such mortgage to the Secretary within 30 days from the date of the issuance of the insurance certificate and if such… | |||
| 24:24:2.1.1.2.4.1.83.51 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43e [Reserved] | HUD | |||||
| 24:24:2.1.1.2.4.1.83.52 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43f Eligibility of mortgages covering manufactured homes. | HUD | [48 FR 7735, Feb. 24, 1983, as amended at 61 FR 36264, July 9, 1996] | A mortgage covering a one-family manufactured home (as defined in 24 CFR 3280.2(a)(16)) that meets the requirements of this subpart, except as modified by this section, shall be eligible for insurance pursuant to this subpart. (a) The manufactured home, when erected on site, shall have floor space area of not less than four hundred square feet and shall have been constructed in conformance with the National Manufactured Home Construction and Safety Standards as evidenced by a certification label affixed thereto in accordance with 24 CFR 3280.8. (b) The mortgage shall cover the manufactured home and site, shall constitute a mortgage on a property classified and taxed as real estate, and shall have a term of not more than 30 years from the date of the beginning of amortization. (c) In the case of a manufactured home which has not been permanently erected on a site for more than one year prior to the date of the application for mortgage insurance: (i) The manufactured home shall be erected on a site-built permanent foundation that meets or exceeds applicable requirements of the Minimum Property Standards for One- and Two-Family Dwellings, 4900.1 (see 24 CFR 200.929(b)(1)) (MPS) and shall be permanently attached thereto by anchoring devices adequate for all loads identified in the MPS. The towing hitch or running gear, which includes axles, brakes, wheels and other parts of the chassis that operate only during transportation, shall have been removed. The finished grade level beneath the manufactured home shall be at or above the 100-year return frequency flood elevation. The site, site improvements, and all other features of the mortgaged property not addressed by the Manufactured Home Construction and Safety Standards shall meet or exceed applicable requirements of the MPS. (ii) The space beneath the manufactured home shall be enclosed by continuous foundation-type construction designed to resist all forces to which it is subject without transmitting forces to the building superstructure. The enclosure shall be… | |||
| 24:24:2.1.1.2.4.1.83.53 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43g Eligibility of mortgages in certain communities. | HUD | [49 FR 21319, May 21, 1984, as amended at 55 FR 34805, Aug. 24, 1990] | (a) A mortgage which meets the requirements of this subpart shall be eligible for insurance without regard to the limitation in this part relating to marketability of title under the following conditions: (1) The mortgagor is to occupy the dwelling as a principal residence (as defined in § 203.18(f)(1)). (2) The defect or potential defect in title is a direct and primary result of outstanding claims to ownership of land in the community by an American Indian tribe, band, group or Nation. (3) Fifty or more individual owners were joined as parties defendant or were members of a defendant class before April 1, 1980 in litigation involving claims to ownership of land in the community in which the property is located by an American Indian tribe, band, group or Nation pursuant to a dispute involving the Articles of Confederation, the Trade and Intercourse Act of 1790 or any similar State or Federal law. (4) Such ownership claims are reasonably likely to be settled by court action or otherwise. (5) Temporary adverse economic conditions exist throughout the community as a direct and primary result of such claims. (b) Mortgages complying with the requirements of this subpart as modified by this section shall be the obligation of the Special Risk Insurance Fund. | |||
| 24:24:2.1.1.2.4.1.83.54 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43h Eligibility of mortgages on Indian land insured pursuant to section 248 of the National Housing Act. | HUD | [51 FR 21871, June 16, 1986, as amended at 53 FR 34282, Sept. 6, 1988; 57 FR 58347, Dec. 9, 1992; 61 FR 36264, July 9, 1996] | A mortgage covering a one- to four-family residence located on Indian land shall be eligible for insurance pursuant to section 248 of the National Housing Act (12 U.S.C. 1715z-13), notwithstanding otherwise applicable requirements related to marketability of title, if the mortgage meets the requirements of this subpart as modified by this section and is made by an Indian Tribe or on a leasehold estate, by an Indian who will occupy it as a principal residence. Mortgage insurance on cooperative shares is not authorized under this section. (a) Exemptions. (1) The provisions of subparts I, J, and M of part 200, and § 203.30, shall not apply to approval of mortgagors for mortgages insured under this section if the Indian tribe to which the prospective mortgagor belongs is subject to the Indian Civil Rights Act. (2) In the case of an Indian tribe which is not subject to the Indian Civil Rights Act, the authorities cited in paragraph (a)(1) of this section shall apply, but any preference in the tribe's approval of the sale or assumption of a lease and mortgage under this section in favor of an eligible Indian over a non-Indian shall not be considered to be a violation of subpart I, J or M. (b) Eviction procedures. Before HUD will insure a mortgage on Indian land, the tribe having jurisdiction over such property must certify to the HUD Field Office that it has adopted and will enforce procedures for eviction of defaulted mortgagors where the insured mortgage has been foreclosed. (c) Approval of lease and mortgage. The lease must be on a form prescribed by HUD. The mortgage must be on a form which meets the requirements of § 203.17(a)(2). Before HUD will insure any mortgage under this section, the mortgagee must demonstrate that the Bureau of Indian Affairs, U.S. Department of Interior, has approved both the lease and mortgage. (d) Construction advances. The Commissioner may issue a commitment for the insurance of advances made during construction and a Direct Endorsement mortgagee may request insurance of a… | |||
| 24:24:2.1.1.2.4.1.83.55 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43i Eligibility of mortgages on Hawaiian Home Lands insured pursuant to section 247 of the National Housing Act. | HUD | [52 FR 8067, Mar. 16, 1987, and 52 FR 28470, July 30, 1987, as amended at 53 FR 8881, Mar. 18, 1988; 53 FR 34282, Sept. 6, 1988; 57 FR 58347, Dec. 9, 1992; 61 FR 36264, July 9, 1996; 62 FR 30226, June 2, 1997; 69 FR 33525, June 15, 2004] | (a) Eligibility. A mortgage on a homestead lease granted by the Department of Hawaiian Home Lands covering a one- to four-family residence located on Hawaiian home lands is eligible for insurance pursuant to section 247 of the National Housing Act (12 U.S.C. 1715z-12) if the mortgagor is a native Hawaiian who will occupy it as a principal residence, and if the mortgage meets the requirements of this subpart as modified by this section. Mortgage insurance on cooperative shares under § 203.43c on homes in federally impacted areas under § 203.43e is not authorized under this section. (b) Exemptions from other regulations. The provisions of subparts I, J, and M of part 200, and § 203.30, to the extent that these provisions would otherwise prohibit preferences in favor of Native Hawaiians in the leasing, sale or other disposition of Hawaiian home lands, do not apply to mortgages insured pursuant to section 247 of the National Housing Act. The first lien requirement contained in § 203.17 also does not apply to mortgages insured pursuant to section 247 of the National Housing Act. (c) Definitions. (1) Department of Hawaiian Home Lands (DHHL) is a Department of the State of Hawaii responsible for management of Hawaiian home lands for the benefit of native Hawaiians. (2) Hawaiian home lands means all lands given the status of Hawaiian home lands under section 204 of the Hawaiian Homes Commission Act of 1920 (42 Stat. 110), or under the corresponding provision of the Constitution of the State of Hawaii adopted under section 4 of the Act entitled “An Act to provide for the admission of the State of Hawaii into the Union,” approved March 18, 1959 (73 Stat. 5). (3) Native Hawaiian means any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian islands before January 1, 1778, or, in the case of an individual who is awarded an interest in a lease of Hawaiian home lands through transfer or succession, such lower percentage as may be established for such transfer or succession und… | |||
| 24:24:2.1.1.2.4.1.83.56 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.43j Eligibility of mortgages on Allegany Reservation of Seneca Nation of Indians. | HUD | [52 FR 48201, Dec. 21, 1987, and 53 FR 9869, Mar. 28, 1988, as amended at 54 FR 32970, Aug. 11, 1989; 55 FR 34805, Aug. 24, 1990] | A mortgage on a leasehold estate covering a one- to four-family residence located on the Allegany Reservation of the Seneca Nation of Indians in the State of New York is eligible for insurance if the mortgage meets the requirements of this subpart as modified by this section. (a) Title. This section applies only to a mortgage which: (1) Does not meet the requirements of § 203.37; (2) Is on a leasehold under a lease with a termination date in February 1991, which provides for renewal in accordance with the Act of February 19, 1875 (18 Stat. 330) and the Act of September 30, 1890 (26 Stat. 558). A mortgage may not be on a leasehold created by a lease which is executed after the effective date of this section as a renewal or replacement of a lease described in paragraph (a)(2) of this section. A mortgage may not be secured by any other right of occupancy created in lieu of a leasehold after the effective date of this section by agreement of the Seneca Nation, court order, law or any other means. (b) Provisions of mortgage. The Secretary will prescribe special mortgage provisions in the form of a mortgage rider in order better to secure the mortgagee, including: (1) Authorization for the mortgagee to exercise the option of lease renewal if the mortgagor fails to do so, and to recover from the mortgagor authorized expenses incurred to obtain lease renewal; and (2) Making a mortgagor failure to take steps necessary for less renewal an event of default under the mortgage. (c) Secretary agreement with mortgagor. The mortgagor must enter into an agreement with the Secretary and such other parties as the Secretary may require regarding actions to be taken to obtain either a renewal of the lease or a new lease. (d) Certification. The borrower must certify that it has received disclosures, in a form prescribed by the Secretary, explaining the status of the lease and the consequences of nonrenewal. The disclosure shall include a discussion of the fact that a mortgagor who does not obtain a lease renewal and l… | |||
| 24:24:2.1.1.2.4.1.83.57 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.44 Eligibility of advances. | HUD | [61 FR 36264, July 9, 1996] | Mortgagees may not make open-end advances under section 225 of the National Housing Act (12 U.S.C. 1715p) in connection with the mortgages insured under this chapter. | |||
| 24:24:2.1.1.2.4.1.83.58 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.45 Eligibility of graduated payment mortgages. | HUD | [41 FR 42949, Sept. 29, 1976, as amended at 45 FR 33966, May 21, 1980; 45 FR 56341, Aug. 24, 1980; 49 FR 19453, 19458, May 8, 1984; 49 FR 23584, June 6, 1984; 52 FR 48201, Dec. 21, 1987; 53 FR 8881, Mar. 18, 1988; 53 FR 9869, Mar. 28, 1988; 55 FR 34805, Aug. 24, 1990; 58 FR 41003, July 30, 1993] | A mortgage containing provisions for varying rates of amortization corresponding to anticipated variations in family income shall be eligible for insurance under this subpart subject to compliance with the additional requirements of this section. (a) The mortgage may provide that any interest which accrues and which is unpaid pursuant to a financing plan approved by the Secretary, shall be added to the principal obligation of the mortgage. (b) The mortgage shall bear interest at the rate agreed upon by the mortgagee and the mortgagor. (c) The mortgage amount shall not exceed the lesser of: (1) The limits prescribed by §§ 203.18, 203.18a, and 203.29; or, (2) An amount which, when added to all accrued mortgage interest which will be unpaid under a financing plan approved by the Secretary, shall not exceed 97 percent of the appraised value of the property covered by the mortgage as of the date the mortgage is accepted for insurance. However, if the mortgagor is a veteran, the mortgage amount, when added to all accrued mortgage interest which will be unpaid under a financing plan approved by the Secretary, shall not exceed the applicable limits prescribed for veterans in § 203.18(a). (d) The mortgage must contain complete amortization provisions satisfactory to the Secretary requiring monthly payments by the mortgagor not in excess of his reasonable ability to pay as determined by the Secretary. The sum of the payments to principal and/or interest may increase annually for a period of five years at a rate of 2 1/2 percent, 5 percent or 7 1/2 percent or for a period of ten years at a rate of 2 percent or 3 percent. Any required increase in payments shall occur on the anniversary date of the beginning of amortization. On the termination of the period of annual increases of payments, the sum of the payments to principal and interest in each month shall be substantially the same. (e) The mortgagee shall fully explain to the mortgagor the nature of the obligation undertaken and the mortgagor shall certify that … | |||
| 24:24:2.1.1.2.4.1.83.59 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.47 Eligibility of growing equity mortgages. | HUD | [49 FR 19453, May 8, 1984, as amended at 49 FR 23584, June 6, 1984; 53 FR 8881, Mar. 18, 1988; 58 FR 41003, July 30, 1993] | A mortgage containing provisions for accelerated amortization corresponding to anticipated variations in family income shall be eligible for insurance under this subpart, subject to compliance with the additional requirements of this section. (a) The mortgage must contain complete amortization provisions, satisfactory to the Secretary, requiring monthly payments by the mortgagor not in excess of the mortgagor's reasonable ability to pay, as determined by the Secretary. (b) The mortgage must contain a provision setting forth the payments required for principal and interest in each year of the mortgage. (c) The monthly payments for principal and interest for the initial year, or such other initial period as the commissioner may approve, shall be determined on the basis of a 30-year level payment amortization schedule. Subsequent monthly payments for principal and interest may increase annually, biennially or at such other interval that is greater than one year, as the Commissioner may approve. The subsequent periodic increases may be up to five percent above the payments for principal and interest for the previous period. (d) No later than at the time that a loan application is offered to a prospective mortgagor, the mortgagee shall explain fully to the mortgagor the nature of the obligation undertaken and the mortgagor shall certify that he or she fully understands the obligation. (e) The mortgage amount shall not exceed the limits prescribed by § 203.18, 203.18a, or 203.29. (f) Sections 203.21 and 203.44 shall not apply to this section. (g) This section shall not apply to a mortgage which meets the requirements of § 203.43, § 203.43a, or § 203.49. (h) Mortgages complying with the requirements of this section shall be insured under this subpart pursuant to section 245(a) of the National Housing Act. | |||
| 24:24:2.1.1.2.4.1.83.60 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.49 Eligibility of adjustable rate mortgages. | HUD | [49 FR 23584, June 6, 1984, as amended at 53 FR 8881, Mar. 18, 1988; 54 FR 111, Jan. 4, 1989; 55 FR 34805, Aug. 24, 1990; 61 FR 36264, July 9, 1996; 69 FR 11501, Mar. 10, 2004; 70 FR 16082, Mar. 29, 2005; 72 FR 40050, July 20, 2007; 79 FR 50840, Aug. 26, 2014; 88 FR 12828, Mar. 1, 2023] | A mortgage containing the provisions for periodic adjustments by the mortgagee in the effective rate of interest charged shall be eligible for insurance under this subpart subject to compliance with the additional requirements of this section. This section shall apply only to mortgage loans described under sections 203(b), 203(h) and 203(k) of the National Housing Act. (a) Types of mortgages insurable. The types of adjustable rate mortgages that are insurable are those for which the interest rate may be adjusted annually by the mortgagee, beginning after one, three, five, seven, or ten years from the date of the mortgagor's first debt service payment. (b) Interest-rate index —(1) CMT and SOFR indices. Changes in the interest rate charged on an adjustable rate mortgage must correspond either to changes in the weekly average yield on U.S. Treasury securities, adjusted to a constant maturity of one year (CMT); to the 30-day average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York (or a successor administrator); or to an alternative SOFR tenor approved by the Secretary. The Secretary may publish approved SOFR tenors as alternatives to the 30-day average SOFR tenor through notice. (2) Transition for existing mortgages indexed to LIBOR. Mortgages with an existing adjustable interest rate indexed to the London Interbank Offered Rate (LIBOR) must be transitioned to the spread-adjusted SOFR replacement index approved by the Secretary by the next interest rate adjustment date for the mortgage on or after the Replacement Date, which means the first London banking day after June 30, 2023, unless the Board of Governors of the Federal Reserve System determines that any LIBOR tenor will cease to be published or cease to be representative on a different date. In such case, Replacement Date means the first business day following the date announced by the Board of Governors of the Federal Reserve System. Notice of the transition to the SOFR replacement index must be sent to the bo… | |||
| 24:24:2.1.1.2.4.1.83.61 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.50 Eligibility of rehabilitation loans. | HUD | [45 FR 33966, May 21, 1980, as amended at 45 FR 76378, Nov. 18, 1980; 50 FR 19926, May 13, 1985; 52 FR 48201, Dec. 21, 1987; 53 FR 8881, Mar. 18, 1988; 53 FR 9869, Mar. 28, 1988; 55 FR 34806, Aug. 24, 1990; 57 FR 58347, Dec. 9, 1992; 58 FR 41003, July 30, 1993; 59 FR 13882, Mar. 24, 1994; 62 FR 30226, June 2, 1997; 67 FR 52381, Aug. 9, 2002; 70 FR 37156, June 28, 2005; 83 FR 64272, Dec. 14, 2018; 84 FR 41877, Aug. 15, 2019] | A rehabilitation loan which meets the requirements of this subpart, except as modified by this section, shall be eligible for insurance under section 203(k) of the National Housing Act. (a) For the purpose of this section: (1) The term rehabilitation loan means a loan, advance of credit, or purchase of an obligation representing a loan or advancement of credit, made for the purpose of financing: (i) The rehabilitation of an existing one-to-four-unit structure which will be used primarily for residential purposes; (ii) The rehabilitation of such a structure and refinancing of the outstanding indebtedness on such structure and the real property on which the structure is located; (iii) The rehabilitation of such a structure and the purchase of the structure and the real property on which it is located; or (iv) The rehabilitation of the interior space of a condominium unit, as defined in § 203.43b, excluding any areas that are the responsibility of the Association; and (2) The term rehabilitation means the improvement (including improvements designed to meet cost-effective energy conservation standards prescribed by the Secretary and improvements for accessibility to the handicapped) or repair of a structure, or facilities in connection with a structure, and may include the provision of such sanitary or other facilities as are required by applicable codes, a community development plan, or a statewide property insurance plan to be provided by the owner or tenant of the project. (b) The provisions of § 203.18 (except as otherwise provided in paragraphs (f) (1) and (2) of this section) and § 203.43c shall not apply to loans insured under this section. (c) The loan shall cover a dwelling which was completed more than one year preceding the date of the application for mortgage insurance and which was approved for mortgage insurance prior to the beginning of rehabilitation. (d)(1) The buildings on the mortgaged property must, upon completion of rehabilitation, conform with standards prescribed by the Secretar… | |||
| 24:24:2.1.1.2.4.1.83.62 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.51 Applicability. | HUD | [55 FR 34806, Aug. 24, 1990, as amended at 57 FR 58347, Dec. 9, 1992; 61 FR 36453, July 10, 1996] | The provisions of §§ 203.18 (a), (c), (d), (e)(1), and (f); § 203.29(c); § 203.31; § 203.43(c); 203.43(k); § 203.43c(g); § 203.43d(a), § 203.43g(a)(1); § 203.43j(e); § 203.45(g); § 203.49(h); § 203.50(f); and § 203.50(k) of this subpart apply to mortgages insured: (1) Pursuant to a conditional commitment or master conditional commitment issued on or after September 24, 1990; or (2) In accordance with the Direct Endorsement program, if the underwriter of the mortgagee signs the appraisal report or master appraisal report for the property on or after September 24, 1990; or (3) Pursuant to a certificate of reasonable value or master certificate of reasonable value issued by the Department of Veterans Affairs on or after September 24, 1990. | |||
| 24:24:2.1.1.2.4.1.83.63 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.52 Acceptance of individual residential water purification equipment. | HUD | [57 FR 9609, Mar. 19, 1992; 57 FR 27927, June 23, 1992] | If a property otherwise eligible for insurance under this part does not have access to a continuing supply of safe and potable water without the use of a water purification system, the requirements of this section must be complied with as a condition to acceptance of the mortgage for insurance. The mortgagee must provide appropriate documentation with the submission for insurance endorsement to address each of the requirements of this section. (a) Equipment. Water purification equipment must be approved by a nationally recognized testing laboratory acceptable to the local or state health authority. (b) Certification by local (or state) health authority. A local (or state) health authority certification must be submitted to HUD which certifies that: (1) A point-of-entry or point-of-use water purification system is currently in operation on the property. If the system in operation employs point-of-use equipment, the purification system must be employed on each water supply source (faucet) serving the property. Where point-of-entry systems are used, separate water supply systems carrying untreated water for flushing toilets may be constructed. (2) The system is sufficient to assure an uninterrupted supply of safe and potable water adequate to meet household needs. (3) The water supply, when treated by the equipment, meets the requirements of the local (or state) health authority, and has been determined to meet local or state quality standards for drinking water. If neither state nor local standards are applicable, then quality shall be determined in accordance with standards set by the Environmental Protection Agency (EPA) pursuant to the Safe Drinking Water Act. (EPA standards are prescribed in the National Primary Drinking Water requirements, 40 CFR parts 141 and 142.) (4) There exists a Plan providing for the monitoring, servicing, maintenance, and replacement of the water equipment, which Plan meets the requirements of paragraph (f) of this section. (c) Mortgagor notice and certification. (1) The p… | |||
| 24:24:2.1.1.2.4.1.84.64 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | A | Subpart A—Eligibility Requirements and Underwriting Procedures | § 203.249 Effect of amendments. | HUD | [62 FR 30226, June 2, 1997] | The regulations in this subpart may be amended by the Secretary at any time and from time to time, in whole or in part, but such amendment will not adversely affect the interests of a mortgagee under the contract of insurance on any mortgage or loan already insured, and will not adversely affect the interest of a mortgagee on any mortgage or loan to be insured for which either the Direct Endorsement or Lender Insurance mortgagee has approved the mortgagor and all terms and conditions of the mortgage or loan, or the Secretary has issued a firm commitment. In addition, such amendment will not adversely affect the eligibility of specific property if such property is covered by a conditional commitment issued by the Secretary, a certificate of reasonable value issued by the Secretary of Veterans Affairs, or an appraisal report approved by a Direct Endorsement or Lender Insurance underwriter. | |||
| 24:24:2.1.1.2.4.2.100.63 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | §§ 203.375-203.376 [Reserved] | HUD | |||||
| 24:24:2.1.1.2.4.2.100.64 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.377 Inspection and preservation of properties. | HUD | [57 FR 47972, Oct. 20, 1992] | The mortgagee, upon learning that a property subject to a mortgage insured under this part is vacant or abandoned, shall be responsible for the inspection of such property at least monthly, if the loan thereon is in default. When a mortgage is in default and a payment thereon is not received within 45 days of the due date, and efforts to reach the mortgagor by telephone within that period have been unsuccessful, the mortgagee shall be responsible for a visual inspection of the security property to determine whether the property is vacant. The mortgagee shall take reasonable action to protect and preserve such security property when it is determined or should have been determined to be vacant or abandoned until its conveyance to the Secretary, if such action does not constitute an illegal trespass. “Reasonable action” includes the commencement of foreclosure within the time required by § 203.355(b) of this part. | |||
| 24:24:2.1.1.2.4.2.100.65 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.378 Property condition. | HUD | [36 FR 34508, Dec. 22, 1971. Redesignated and amended at 41 FR 49735, Nov. 10, 1976; 57 FR 47973, Oct. 20, 1992; 58 FR 32057, June 8, 1993; 61 FR 36265, July 9, 1996; 61 FR 36453, July 10, 1996] | (a) Condition at time of transfer. When the property is transferred, or a mortgage is assigned to the Commissioner, the property shall be undamaged by fire, earthquake, flood, or tornado, except as set forth in this subpart. (b) Damage to property by waste. The mortgagee shall not be liable for damage to the property by waste committed by the mortgagor, its heirs, successors or assigns in connection with mortgage insurance claims paid on or after July 2, 1968. (c) Mortgagee responsibility. The mortgagee shall be responsible for: (1) Damage by fire, flood, earthquake, hurricane, or tornado; (2) Damage to or destruction of security properties on which the loans are in default and which properties are vacant or abandoned, when such damage or destruction is due to the mortgagee's failure to take reasonable action to inspect, protect and preserve such properties as required by § 203.377 of this part, as to all mortgages insured on or after January 1, 1977; and (3) As to all mortgages insured under firm commitments issued on or after November 19, 1992, or under direct endorsement processing where the credit worksheet was signed by the mortgagee's underwriter on or after November 19, 1992, any damage of whatsoever nature that the property has sustained while in the possession of the mortgage if the property is conveyed to the Secretary without notice to and approval by the Secretary as required by § 203.379 of this part. (d) Limitation. The mortgagee's responsibility for property damage shall not exceed the amount of its insurance claim as to a particular property. | |||
| 24:24:2.1.1.2.4.2.100.66 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.379 Adjustment for damage or neglect. | HUD | [57 FR 47973, Oct. 20, 1992, as amended at 61 FR 36265, July 9, 1996] | (a) If the property has been damaged by fire, flood, earthquake, hurricane, or tornado, or, for mortgages insured on or after January 1, 1977, the property has suffered damage because of the mortgagee's failure to take action as required by § 203.377, the damage must be repaired before conveyance of the property or assignment of the mortgage to the Secretary, except under the following conditions: (1) If the prior approval of the Secretary is obtained, there will be deducted from the insurance benefits the Secretary's estimate of the cost of repairing the damage or any insurance recovery received by the mortgagee, whichever is greater. (2) If the property has been damaged by fire and was not covered by fire insurance at the time of the damage, or the amount of insurance coverage was inadequate to repair fully the damage, only the amount of insurance recovery received by the mortgagee, if any, will be deducted from the insurance benefits, provided the mortgagee certifies, at the time that a claim is filed for insurance benefits, that: (i) At the time the mortgage was insured, the property was covered by fire insurance in an amount at least equal to the lesser of 100 percent of the insurable value of the improvements, or the principal loan balance of the mortgage; and (ii) The insurer later cancelled this coverage or refused to renew it for reasons other than nonpayment of premium; and (iii) The mortgagee made diligent though unsuccessful efforts within 30 days of any cancellation or non-renewal of hazard insurance, and at least annually thereafter, to secure other coverage or coverage under a FAIR Plan, in an amount described in paragraph (a)(2)(i) of this section, or if coverage to such an extent was unavailable at a reasonable rate, the greatest extent of coverage that was available at a reasonable rate; and (iv) The extent of coverage obtained by the mortgagee in accordance with paragraph (a)(2)(iii) of this section was the greatest available at a reasonable rate, or if the mortgagee was unable to obtain … | |||
| 24:24:2.1.1.2.4.2.100.67 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.380 Certificate of property condition. | HUD | [57 FR 47973, Oct. 20, 1992, as amended at 61 FR 36265, July 9, 1996; 61 FR 36453, July 10, 1996] | (a) The mortgagee shall either: (1) Certify that as of the date of the filing of deed for record, or assignment of the mortgage to the Secretary, the property was: (i) Undamaged by fire, flood, earthquake, hurricane or tornado; and (ii) As to mortgages insured or for which commitments to insure were issued on or after January 2, 1977, undamaged due to failure of the mortgagee to take action as required by § 203.377; and (iii) As to mortgages insured under firm commitments issued on or after November 19, 1992, or under direct endorsement processing where the credit worksheet was signed by the mortgagee's underwriter on or after November 19, 1992, undamaged while the property was in the possession of the mortgage; or (2) Attach to its claim a copy of the Secretary's authorization to convey the property in damaged condition. (b) In the absence of evidence to the contrary, the mortgagee's certificate or description of the damage shall be accepted by the Secretary as establishing the condition of the property, as of the date of the filing of the deed or assignment of the mortgage. | |||
| 24:24:2.1.1.2.4.2.100.68 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.381 Occupancy of property. | HUD | [45 FR 59563, Sept. 10, 1980] | The mortgagee shall certify that the property is vacant and contains no personal property as of the date of filing for record of the deed to the Secretary or that the Secretary has consented to accept the property occupied. | |||
| 24:24:2.1.1.2.4.2.100.69 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.382 Cancellation of hazard insurance. | HUD | The mortgagee shall cancel any hazard insurance policy as of the date of the filing for record of the deed to the Commissioner subject to the following conditions: (a) The amount of the return premium due the mortgagee because of such cancellation may be calculated on a “short-rate” basis and reported on fiscal data supporting the application for debentures and the amount shall be deducted from the total amount claimed. (b) If the mortgagee's calculation of the return premium is less than the actual return, the amount of the difference between the actual refund and the calculated amount shall be remitted to the Commissioner, accompanied by the carrier's or agent's statement. (c) If the mortgagee's calculation of the return premium is more than the actual return, the mortgagee may file with the Commissioner a claim, supported by the carrier's or agent's statement of the amount of the refund, whereupon the Commissioner shall issue a check to the mortgagee in settlement of the claim. | ||||
| 24:24:2.1.1.2.4.2.101.70 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.385 Types of satisfactory title evidence. | HUD | The following types of title evidence shall be satisfactory to the Commissioner: (a) Fee or owner's title policy. A fee or owner's policy of title insurance, a guaranty or guarantee of title, or a certificate of title, issued by a title company, duly authorized by law and qualified by experience to issue such instruments. If an owner's policy of title insurance is furnished, it shall show title in the Commissioner and inure to the benefit of his successors in office. (b) Mortgagee's policy of title insurance. A mortgagee's policy of title insurance supplemented by an Abstract and an Attorney's Certificate of Title covering the period subsequent to the date of the mortgage, the terms of the policy shall be such that the liability of the title company will continue in favor of the Commissioner after title is conveyed to him. The policy may be drawn in favor of the mortgagee and the Federal Housing Commissioner, “as their interests may appear”, with the consent of the title company endorsed thereon; (c) Abstract and legal opinion. An abstract of title prepared by an abstract company or individual engaged in the business of preparing abstracts of title and accompanied by the legal opinion as to the quality of such title signed by an attorney at law experienced in examination of titles. If title evidence consists of an Abstract and an Attorney's Certificate of Title, the search shall extend for at least forty years prior to the date of the Certificate to a well recognized source of good title; (d) Torrens of similar certificate. A Torrens or similar title certificate; or (e) Title standard of U.S. or State government. Evidence of title conforming to the standards of a supervising branch of the Government of the United States or of any State or Territory thereof. | ||||
| 24:24:2.1.1.2.4.2.101.71 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.386 Coverage of title evidence. | HUD | Evidence of title shall be executed as of a date to include the recordation of the deed to the Commissioner. The evidence of title shall show that according to the public records, there are not, at such date, any outstanding prior liens, including any past-due and unpaid ground rents, general taxes or special assessments. | ||||
| 24:24:2.1.1.2.4.2.101.72 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.387 Acceptability of customary title evidence. | HUD | [57 FR 47974, Oct. 20, 1992] | If the title and title evidence are such as to be acceptable to prudent lending institutions and leading attorneys generally in the community in which the property is situated, such title and title evidence shall be satisfactory to the Secretary and shall be considered as good and marketable. In cases of disagreement, the Secretary will make the final decision. | |||
| 24:24:2.1.1.2.4.2.101.73 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.389 Waived title objections. | HUD | [36 FR 34508, Dec. 22, 1971, as amended at 41 FR 49736, Nov. 10, 1976; 72 FR 56161, Oct. 2, 2007] | The Commissioner shall not object to title by reason of the following matters: (a) Violations of a restriction based on race, color or creed, even where such restriction provides for a penalty of reversion or forfeiture of title or a lien for liquidated damage. (b)(1) Aviation easements, which were approved by the Secretary at the time of the origination of the mortgage, and other customary easements for public utilities, party walls, driveways, and other purposes. (2) Easements for public utilities along one or more of the property lines and extending not more than 10 feet therefrom and for drainage or irrigation ditches along the rear 10 feet of the property, provided the exercise of the rights thereunder do not interfere with any of the buildings or improvements located on the subject property. (c) Easements for underground conduits which are in place and do not extend under any buildings on the subject property; (d) Mutual easements for joint driveways constructed partly on the subject property and partly on adjoining property, provided the agreements creating such easements are of record; (e) Encroachments on the subject property by improvements on adjoining property where such encroachments do not exceed 1 foot, provided such encroachments do not touch any buildings or interfere with the use of any improvements on the subject property; (f) Encroachments on adjoining property by eaves and overhanging projections attached to improvements on subject property where such encroachments do not exceed 1 foot. (g) Encroachments on adjoining property by hedges, wooden or wire fences belonging to the subject property; (h) Encroachments on adjoining property by driveways belonging to subject property where such encroachments do not exceed 1 foot, provided there exists a clearance of at least 8 feet between the buildings on the subject property and the property line affected by the encroachment; (i) Variations between the length of the subject property lines as shown on the application for insurance and as sho… | |||
| 24:24:2.1.1.2.4.2.101.74 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.390 Waiver of title—mortgages or property formerly held by the Secretary. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 58 FR 35370, July 1, 1993; 61 FR 36265, July 9, 1996] | (a) Mortgages sold by the Secretary. (1) If the Secretary sells a mortgage and such mortgage is later reassigned to him or the property covered by such mortgage is later conveyed to him, he will not object to title by reason of any lien or other adverse interest that was senior to the mortgage on the date of the original sale of such mortgage. (2) The Secretary will accept an assignment of a mortgage previously sold by him, where the mortgagee is unable to complete foreclosure because of a defect in the mortgage instrument, a defect in the mortgage transaction, or a defect in title which existed at or prior to the time the mortgage assignment was filed for record. In such instances, the Secretary will not object to title by reason of any such defect. (b) Property sold by the Secretary. (1) If a property held by the Secretary is sold by the Secretary who also insures a mortgage financing the sale, and the mortgage is later reassigned to the Secretary or the property covered by the mortgage is later conveyed to the Secretary, the Secretary will not object to title by reason of any lien or other adverse interest that was senior to the mortgage on the date the mortgage was filed for record, except where the lien or other adverse interest arose from a lien or interest that had already been recorded against the mortgagor. (2) The Secretary will accept an assignment of a mortgage executed in connection with the sale of property by the Secretary, where the mortgagee is unable to complete foreclosure because of a defect in the mortgage instrument, a defect in the mortgage transaction, or a defect in title which existed at or prior to the time the mortgage was filed for record, except where the defect arose from a lien or interest that had already been recorded against the mortgagor on the date that the mortgage was filed for record. Except for the case of a lien or interest that had already been recorded against the mortgagor, the Secretary will not object to title by reason of any of the above defects. | |||
| 24:24:2.1.1.2.4.2.101.75 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.391 Title objection waiver with reduced insurance benefits. | HUD | [57 FR 47974, Oct. 20, 1992] | Payment of an insurance claim will not automatically be refused solely because the title evidence reveals a condition of title not taken into consideration in the original appraisal and not covered by the provisions of § 203.389 of this part, or not otherwise waived in writing by the Secretary. In such instances, the Secretary may, at his or her option, approve the payment of a claim if the mortgagee agrees to accept a reduction in insurance benefits considered adequate by the Secretary to compensate for any anticipated loss to the Mutual Mortgage Insurance Fund as a result of the existence of the title condition at the time of claim. | |||
| 24:24:2.1.1.2.4.2.102.76 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.400 Method of payment. | HUD | [80 FR 51468, Aug. 25, 2015] | (a) If the application for insurance benefits is acceptable to the Commissioner, payment of the insurance claim shall be made in cash, in debentures, or in a combination of both, as determined by the Commissioner either at, or prior to, the time of payment. (b) An insurance claim paid on a mortgage insured under section 223(e) of the National Housing Act shall be paid in cash from the Special Risk Insurance Fund. | |||
| 24:24:2.1.1.2.4.2.102.77 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.401 Amount of payment—conveyed and non-conveyed properties. | HUD | [52 FR 1328, Jan. 13, 1987, as amended at 56 FR 3215, Jan. 29, 1991; 59 FR 50144, Sept. 30, 1994] | (a) Conveyed properties. Where a claim for the insurance benefits is filed in accordance with this subpart, based on the conveyance of title to the mortgaged property to the Commissioner, the amount of the insurance benefits shall be computed by adding to the original principal balance of the mortgage (as increased by the amount of open-end advances made by the mortgagee and approved by the Commissioner) which was unpaid on the date of the institution of foreclosure proceedings, on the date of the acquisition of the property otherwise after default, or on the date the property was acquired by the Commissioner under a direct conveyance by the mortgagor, the amount of all payments made by the mortgagee and allowances for items set forth in § 203.402, less all applicable items set forth in § 203.403. (b) Claims without conveyance of title. (1) If the mortgagee acquires title to the mortgaged property pursuant to a bid amount equal to the Commissioner's adjusted fair market value and the mortgagee elects to retain title as provided in § 203.368(g)(2), or if the mortgagee acquires title pursuant to a bid in excess of the Commissioner's adjusted fair market value (see § 203.368(g)(4)), the amount of the insurance benefits shall be determined by deducting the amount bid at the sale from the original principal balance of the mortgage (as increased by the amount of open-end advances made by the mortgagee and approved by the Commissioner) which was unpaid on the date of institution of the foreclosure proceedings, and adding to the difference, if any, all applicable items set forth in § 203.402 and subtracting therefrom all applicable items set forth in § 203.403; provided however, that appropriate adjustment shall be made for any such items covered by proceeds of the foreclosure sale. (2) If a party other than the mortgagee acquires title to the mortgaged property pursuant to a bid at foreclosure sale not less in amount than the Commissioner's adjusted fair market value, the amount of the insurance benefits shall be … | |||
| 24:24:2.1.1.2.4.2.102.78 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.402 Items included in payment—conveyed and non-conveyed properties. | HUD | [36 FR 34508, Dec. 22, 1971, as amended at 41 FR 49736, Nov. 10, 1976; 45 FR 56801, Aug. 6, 1980; 48 FR 28806, June 23, 1983; 51 FR 28551, Aug. 8, 1986; 52 FR 1329, Feb. 13, 1987; 53 FR 4388, Feb. 16, 1988; 57 FR 47974, Oct. 20, 1992; 59 FR 50145, Sept. 30, 1994; 61 FR 35018, July 3, 1996; 61 FR 36266, July 9, 1996; 61 FR 36453, July 10, 1996; 62 FR 60130, Nov. 6, 1997; 71 FR 35993, June 22, 2006; 72 FR 56161, Oct. 2, 2007] | The insurance benefits paid in connection with foreclosed properties, whether or not conveyed to the Commissioner; and those properties conveyed to the Commissioner as a result of a deed in lieu of foreclosure; and those properties sold under an approved pre-foreclosure sale shall include the following items: (a) Taxes, ground rents, water rates, and utility charges that are liens prior to the mortgage. (b) Special assessments, which are noted on the application for insurance or which become liens after the insurance of the mortgage. (c) Hazard insurance premiums on the mortgaged property not in excess of a reasonable rate as defined in § 203.379(a)(4). (d) Periodic MIP or open-end insurance charges; (e) Taxes imposed upon any deeds or other instruments by which said property was acquired by the mortgagee and transferred or conveyed to the Commissioner, or was acquired by the mortgagee and retained pursuant to § 203.368; (f) Foreclosure costs or costs of acquiring the property otherwise (including costs of acquiring the property by the mortgagee and of conveying and evidencing title to the property to HUD, but not including any costs borne by the mortgagee to correct title defects) actually paid by the mortgagee and approved by HUD, in an amount not in excess of two-thirds of such costs or $75, whichever is the greater. For mortgages insured on or after February 1, 1998, the Secretary will reimburse a percentage of foreclosure costs or costs of acquiring the property, which percentage shall be determined in accordance with such conditions as the Secretary shall prescribe. Where the foreclosure involves a mortgage sold by the Secretary on or after August 1, 1969, or a mortgage executed in connection with the sale of property by the Secretary on or after such date, the mortgagee shall be reimbursed (in addition to the amount determined under the foregoing) for any extra costs incurred in the foreclosure as a result of a defect in the mortgage instrument, or a defect in the mortgage transaction or a defect i… | |||
| 24:24:2.1.1.2.4.2.102.79 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.402a Reimbursement for uncollected interest. | HUD | [60 FR 57678, Nov. 16, 1995, as amended at 61 FR 35019, July 3, 1996] | The mortgagee shall be entitled to receive an allowance in the insurance settlement for unpaid mortgage interest if the mortgagor fails to meet the requirements of a forbearance agreement entered into pursuant to § 203.614 and this failure continues for a period of 60 days. The interest allowance shall be computed to: (a) The earliest of the applicable following dates, except as provided in paragraph (b) of this section: (1) The date of the initiation of foreclosure; (2) The date of the acquisition of the property by the mortgagee by means other than foreclosure; (3) The date the property was acquired by the Commissioner under a direct conveyance from the mortgagor; (4) Ninety days following the date the mortgagor fails to meet the requirements of the forbearance agreement, or such other date as the Commissioner may approve in writing prior to the expiration of the 90-day period; or (5) The date the mortgagee sends the mortgagor notice of eligibility to participate in the Pre-Foreclosure Sale procedure; or (b) The date foreclosure is initiated or a deed in lieu is obtained, or the date such actions were required by § 203.355(c), whichever is earlier, if the commencement of foreclosure within the time limits described in § 203.355(a), (b), (g), or (h) is precluded by: (1) The laws of the State in which the mortgaged property is located; or (2) Federal bankruptcy law. | |||
| 24:24:2.1.1.2.4.2.102.80 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.403 Items deducted from payment—conveyed and non-conveyed properties. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 52 FR 1329, Jan. 13, 1987; 59 FR 50145, Sept. 30, 1994] | There shall be deducted from the total of the added items in §§ 203.401 and 203.402 the following cash items: (a) All amounts received by the mortgagee on account of the mortgage after the institution of foreclosure proceedings or the acquisition of the property by direct conveyance or otherwise after default. (b) All amounts received by the mortgagee from any source relating to the property on account of rent or other income after deducting reasonable expenses incurred in handling the property. (c) All cash retained by the mortgagee including amounts held or deposited for the account of the mortgagor or to which it is entitled under the mortgage transaction that have not been applied in reduction of the principal mortgage indebtedness. (d) With regard to claims filed pursuant to successful pre-foreclosure sales, all amounts received by the mortgagee relating to the sale of the property. | |||
| 24:24:2.1.1.2.4.2.102.81 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.404 Amount of payment—assigned mortgages. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 55 FR 283, Jan. 4, 1990; 56 FR 3215, Jan. 29, 1991; 61 FR 35019, July 3, 1996; 71 FR 35994, June 22, 2006] | Upon an acceptable assignment of a mortgage, the Commissioner shall pay to the mortgagee the unpaid principal balance of the loan at the time of assignment and an amount determined by: (a) Adding the following items: (1) Any accrued and unpaid mortgage interest. (2) Any advances made under the mortgage and approved by the Commissioner. (3) Reimbursement for such costs and attorney's fees as HUD finds were properly incurred in connection with the defaulted mortgage and its modification and assignment to HUD. (4) For mortgages endorsed for insurance on or before January 23, 2004, an amount equivalent to the debenture interest that would have been earned on the portion of the insurance benefits paid in cash, as of the date such payment is made, and for mortgages endorsed for insurance after January 23, 2004, debenture interest at the rate specified in § 203.405(b), from the date specified in § 203.410 to the date of claim payment on the portion of the insurance benefits paid in cash, except that when the mortgagee fails to meet any one of the requirements of §§ 203.350(e), 203.351, and 203.353 of this chapter within the specified time and in a manner satisfactory to the Commissioner (or within such further time as the Commissioner may approve in writing), the interest allowance in such cash payment shall be computed only to the date on which the particular required action should have been taken or to which it was extended. (5) An administrative fee to the mortgagee for modifying the mortgage. (6) A fee for servicing the mortgage assigned to HUD, if HUD requires such servicing. (b) Deducting all cash retained by the mortgagee, including amounts held or deposited for the account of the mortgagor or to which it is entitled under the mortgage transaction that have not been applied in reduction of the principal mortgage indebtedness. (c) The mortgagee may not file for any additional payments of its mortgage insurance claim after six months from final payment by the Commissioner. For the purpose of this section, … | |||
| 24:24:2.1.1.2.4.2.102.82 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.405 Debenture interest rate. | HUD | [71 FR 35994, June 22, 2006] | (a) Debentures shall bear interest from the date of issue, payable semiannually on the first day of January and the first day of July of each year at the rate in effect as of the day the commitment was issued, or as of the date the mortgage was endorsed for insurance, whichever rate is higher. For applications involving mortgages originated under the single family Direct Endorsement program, debentures shall bear interest from the date of issue, payable semiannually on the first day of January and on the first day of July of each year at the rate in effect as of the date the mortgage was endorsed for insurance; (b) For mortgages endorsed for insurance after January 23, 2004, if an insurance claim is paid in cash, the debenture interest rate for purposes of calculating such a claim shall be the monthly average yield, for the month in which the default on the mortgage occurred, on United States Treasury Securities adjusted to a constant maturity of 10 years. | |||
| 24:24:2.1.1.2.4.2.102.83 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.406 Maturity of debentures. | HUD | Debentures shall mature 20 years from the date of issue. | ||||
| 24:24:2.1.1.2.4.2.102.84 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.407 Registration of debentures. | HUD | Debentures shall be registered as to principal and interest. | ||||
| 24:24:2.1.1.2.4.2.102.85 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.408 Form and amounts of debentures. | HUD | [59 FR 49816, Sept. 30, 1994] | Debentures issued under this part shall be in such form and amounts; and shall be subject to such term and conditions; and shall include such provisions for redemption, if any, as may be prescribed by the Secretary, with the approval of the Secretary of the Treasury; and may be in book entry or certificated registered form, or such other form as the Secretary by regulation may prescribe. | |||
| 24:24:2.1.1.2.4.2.102.86 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.409 Redemption of debentures. | HUD | Debentures shall, at the option of the Commissioner and with the approval of the Secretary of the Treasury, be redeemable at par plus accrued interest on any semiannual interest payment date on three months' notice of redemption given in such manner as the Commissioner shall prescribe. The debenture interest on the debentures called for redemption shall cease on the semiannual interest payment date designated in the call notice. The Commissioner may include with the notice of redemption an offer to purchase the debentures at par plus accrued interest at any time during the period between the notice of redemption and the redemption date. If the debentures are purchased by the Commissioner after such call and prior to the named redemption date, the debenture interest shall cease on the date of purchase. | ||||
| 24:24:2.1.1.2.4.2.102.87 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.410 Issue date of debentures. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 50 FR 3892, Jan. 29, 1985; 52 FR 1329, Jan. 13, 1987; 59 FR 50145, Sept. 30, 1994; 60 FR 57678, Nov. 16, 1995] | (a) Conveyed properties, claims without conveyance, pre-foreclosure sales— Where the property is conveyed to the Commissioner, or the mortgagee or other party acquires title to the property under the claim without conveyance procedure or the pre-foreclosure sale procedure, debenture shall be dated: (1) If issued prior to September 2, 1964, or issued on or after such date and a certificate of claim is also issued, as of one of the dates as follows: (i) The foreclosure proceedings were instituted; (ii) The property was otherwise acquired by the mortgagee after default; (iii) The property was acquired by the Commissioner, if directly conveyed to the Commissioner from the mortgagor; or (iv) The property was acquired after default by a third party under the pre-foreclosure sale procedure. (2) If issued on or after September 2, 1964, and a certificate of claim is not issued, as of the date of default as defined in this part. (3) As of the day after the date to which mortgage interest is computed as specified in § 203.402a, if the insurance settlement includes an allowance for uncollected interest in connection with a special forbearance. (b) Assigned mortgages. Where the mortgage is assigned to the Commissioner, debentures shall be dated as of the date of the assignment. (c) Notwithstanding paragraph (a) of this section, in connection with conveyed properties and claims without conveyance, debentures issued as reimbursement for expenditures made by a mortgagee after the date of default shall be dated as of the date the expenditure is actually made by the mortgagee. | |||
| 24:24:2.1.1.2.4.2.102.88 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.411 Cash adjustment. | HUD | [59 FR 49816, Sept. 30, 1994] | Any difference of less than $50 between the amount of debentures to be issued to the mortgagee and the total amount of the mortgagee's claim, as approved by the Commissioner, may be adjusted by the issuance of a check in payment thereof. | |||
| 24:24:2.1.1.2.4.2.102.89 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.412 Payment for foreclosure alternative actions. | HUD | [61 FR 35019, July 3, 1996] | Notwithstanding the conveyance, sale, or assignment requirements for payment of a claim elsewhere in this part, HUD may pay the mortgagee, in accordance with procedures prescribed by HUD, for the following foreclosure alternative actions, in such amounts as HUD determines: (a) Assumptions under § 203.512; (b) Special forbearance under §§ 203.471 and 203.614; (c) Recasting or modification of defaulted mortgages under § 203.616, where the mortgagee is not reimbursed under § 203.405(a); (d) Refinancing under § 203.43(c). | |||
| 24:24:2.1.1.2.4.2.102.90 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.413 Amount of payment—Single Family Sale assignments. | HUD | [89 FR 99715, Dec. 11, 2024] | (a) Time of payment. Upon an assignment of a mortgage insured under this part that is acceptable to the Commissioner, made pursuant to a Single Family Sale and in accordance with § 291.609 or § 291.619 of this chapter, the Commissioner shall pay to the mortgagee the unpaid principal balance of the loan at the time of assignment and an amount calculated in accordance with the Participating Servicer Agreement (PSA), as defined in § 291.601 of this chapter. (b) Acceptability criteria. For assignment, the mortgagee must determine and certify the mortgage satisfies the Commissioner's acceptability criteria for the Single Family Sale. Acceptability criteria includes satisfaction of the Single Family Sale loss mitigation eligibility requirements and exclusion of low-value mortgages secured by vacant properties. (c) Reduction in claim. The mortgagee's claim for insurance will be reduced for failure to take the required actions within the specified schedule of dates for the Single Family Sale, as specified in the PSA. (d) Curtailment of Debenture Interest. HUD will curtail Debenture Interest at the thirtieth (30th) day following the earliest anticipated claim submission date, as identified on the schedule of dates in the PSA, if: (1) The mortgagee's claim for insurance is not submitted to HUD; or (2) The claim for insurance is in a suspended status. (e) Debenture Interest. For purposes of this section, Debenture Interest means interest at the debenture rate as computed by HUD in accordance with its rules and requirements for such calculations, on the unpaid principal balance as of the claim payment date, plus the approved reimbursable expenses identified in the PSA, minus any amount of such interest or expenses that would have been curtailed or for which the Participating Servicer would have been denied reimbursement pursuant to HUD's requirements for servicing defaulted notes and processing claims, including § 203.402(k)(1)(i) and (ii), had the Participating Servicer conveyed title to the property… | |||
| 24:24:2.1.1.2.4.2.102.91 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.414 Amount of payment—partial claims. | HUD | [61 FR 35019, July 3, 1996, as amended at 62 FR 60130, Nov. 6, 1997] | (a) Claim amount. Where a claim for partial insurance benefits is filed in accordance with § 203.371, the amount of the insurance benefits shall consist of the arrearage not to exceed an amount equivalent to 12 monthly mortgage payments, and any costs prescribed by HUD related to the default. (b) Servicing fee. The claim may also include a payment for activities, such as servicing the subordinate mortgage, which HUD may require. | |||
| 24:24:2.1.1.2.4.2.103.92 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.415 Delivery of certificate of claim. | HUD | [36 FR 24508, Dec. 22, 1971, as amended at 57 FR 58349, Dec. 9, 1992; 62 FR 30227, June 2, 1997] | (a) If the mortgage was accepted for insurance pursuant to a commitment issued prior to September 2, 1964, the mortgagee may, by filing a written request with the application for debentures, receive in addition to the debentures and the cash adjustment check, a certificate of claim issued in accordance with section 204(e) of the Act. This certificate shall become payable (if at all) as prescribed in section 204(f) of the Act. (b) If the mortgage was accepted for insurance pursuant to a commitment issued on or after September 2, 1964, or under the Direct Endorsement, Lender Insurance, or Coinsurance programs, no certificate of claim will be issued. | |||
| 24:24:2.1.1.2.4.2.103.93 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.416 Amount and items of certificate of claim. | HUD | The certificate shall be for an amount which the Commissioner determines to be sufficient to pay all amounts due under the mortgage and not covered by the amount of debentures and cash adjustment check. The certificate shall include a reasonable amount for necessary expenses incurred by the mortgagee in connection with the foreclosure proceedings or the acquisition of the mortgaged property otherwise and the conveyance thereof to the Commissioner, including reasonable attorneys' fees, unpaid interest, and cost of repairs to the property made by the mortgagee to remedy the waste. | ||||
| 24:24:2.1.1.2.4.2.103.94 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.417 Rate of interest of certificate of claim. | HUD | Each certificate of claim shall provide that there shall accrue to the holder thereof with respect to the face amount of such certificate, an increment at the rate of 3 percent per annum. | ||||
| 24:24:2.1.1.2.4.2.104.100 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.425 Finality of determination. | HUD | The determination of the Commissioner as to the amount to be paid to any mortgagor from the Mutual Mortgage Insurance Fund shall be final and conclusive. | ||||
| 24:24:2.1.1.2.4.2.104.101 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.426 Inapplicability to housing in older declining urban areas. | HUD | The provisions of §§ 203.420 through 203.425 shall not apply to mortgages financing housing in declining urban areas meeting the requirements of § 203.43a. | ||||
| 24:24:2.1.1.2.4.2.104.102 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.427 Statute of limitations on payment of distributive shares. | HUD | [59 FR 49816, Sept. 30, 1994] | The Commissioner shall not distribute any distributive share to an eligible mortgagor under § 203.423 beginning on the date which is six years after the date the Commissioner first transmitted written notification of eligibility to the last known address of the mortgagor, unless the mortgagor has applied in accordance with procedures prescribed by the Commissioner for payment of the share within the six-year period. The Commissioner shall transfer any amounts no longer eligible for distribution under this section from the Participating Reserve Account to the General Surplus Account. | |||
| 24:24:2.1.1.2.4.2.104.95 | 24 | Housing and Urban Development | II | B | 203 | PART 203—SINGLE FAMILY MORTGAGE INSURANCE | B | Subpart B—Contract Rights and Obligations | § 203.420 Nature of Mutual Mortgage Insurance Fund. | HUD | The Mutual Mortgage Insurance Fund shall consist of the General Surplus Account and the Participating Reserve Account. |
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title_number INTEGER,
title_name TEXT,
chapter TEXT,
subchapter TEXT,
part_number TEXT,
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