24 CFR 203.512 - Free assumability; exceptions.

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§ 203.512 Free assumability; exceptions.
(a) Policy of free assumability with no restrictions. A mortgagee shall not impose, agree to or enforce legal restrictions on conveyance, as defined in § 203.41(a)(3) of this part, or restrictions on assumption of the insured mortgage, unless specifically permitted by this part or contained in a junior lien granted to the mortgagee after settlement on the insured mortgage.
(b) Credit review. If approval is required by the mortgage, the mortgagee shall not approve the sale or other transfer of all or part of the mortgaged property, or the sale or transfer of a beneficial interest in a trust owning all or part of the property, whether or not any person acquires personal liability under the mortgage in connection with the sale or other transfer, unless:
(1) At least one of the persons acquiring ownership is determined to be creditworthy under applicable standards prescribed by the Secretary;
(2) The selling mortgagor retains an ownership interest in the property; or
(3) The transfer is by devise or descent.
(c) Investors and secondary residences. The mortgagee shall not approve the sale of other transfer or mortgaged property to a person who cannot be approved as a substitute mortgagor as provided in § 203.258 of this part because the property will not be a primary residence or a secondary residence permitted by that section.
(d) Due-on-sale clause. Each mortgage shall contain a due-on-sale clause permitting acceleration, in a form prescribed by the Secretary. If a sale or other transfer occurs without mortgagee approval and a prohibition in paragraphs (b) or (c) of this section applies, a mortgagee shall enforce this section by requesting approval from the Secretary to accelerate the mortgage, provided that acceleration is permitted by applicable law. The mortgagee shall accelerate if approval is granted. This paragraph applies only if the application by the mortgagor on a form approved by the Secretary is dated on or after December 1, 1986.
[58 FR 42649, Aug. 11, 1993; 59 FR 15112, Mar. 31, 1994]

Title 24 published on 2014-04-01

The following are only the Rules published in the Federal Register after the published date of Title 24.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-11-03; vol. 79 # 212 - Monday, November 3, 2014
    1. 79 FR 65140 - HUD's Qualified Mortgage Rule: Announcement of Intention To Adopt Changes Pertaining to Exempted Transaction List
      GPO FDSys XML | Text
      DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, HUD, Office of the Assistant Secretary for Housing—Federal Housing Commissioner
      Announcement of change to HUD's exempted transaction definition.
      Effective Date: November 3, 2014.
      24 CFR Part 203

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United States Code

Title 24 published on 2014-04-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 24 CFR 203 after this date.

  • 2014-11-03; vol. 79 # 212 - Monday, November 3, 2014
    1. 79 FR 65140 - HUD's Qualified Mortgage Rule: Announcement of Intention To Adopt Changes Pertaining to Exempted Transaction List
      GPO FDSys XML | Text
      DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, HUD, Office of the Assistant Secretary for Housing—Federal Housing Commissioner
      Announcement of change to HUD's exempted transaction definition.
      Effective Date: November 3, 2014.
      24 CFR Part 203