24 CFR 242.37 - Mortgage prepayment.

§ 242.37 Mortgage prepayment.

(a)Prepayment privilege. Except as provided in paragraph (c) of this section or otherwise established by HUD, the mortgage shall contain a provision permitting the mortgagor to prepay the mortgage in whole or in part upon any interest payment date, after giving the mortgagee a 30-day notice in writing in advance of its intention to so prepay. The 30-day notice may be extended with the prior written approval of HUD.

(b)Prepayment charge. The mortgage may contain a provision for such charge, in the event of prepayment of principal, as may be agreed upon between the mortgagor and the mortgagee, subject to the following:

(1) The mortgagor shall be permitted to prepay up to 15 percent of the original principal amount of the mortgage in any one calendar year without any such charge.

(2) Any reduction in the original principal amount of the mortgage resulting from the certification of cost, which HUD may require, shall not be construed as a prepayment of the mortgage.

(c)Prepayment of bond-financed or GNMA-securitized mortgages. Where the mortgage is given to secure GNMA mortgage-backed securities or a loan made by a lender that has obtained the funds for the loan by the issuance and sale of bonds or bond anticipation notes, or both, the mortgage may contain a prepayment restriction and prepayment penalty charge acceptable to HUD as to term, amount, and conditions.

(d)HUD override of prepayment restrictions. In the event of a default, HUD may override any lockout, prepayment penalty, or combination of penalties in order to facilitate a partial or full refinancing of the mortgaged property and avoid a claim.

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

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United States Code

Title 24 published on 14-Jun-2017 03:56

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 24 CFR Part 242 after this date.

  • 2015-12-07; vol. 80 # 234 - Monday, December 7, 2015
    1. 80 FR 75931 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards: Conforming Amendments
      GPO FDSys XML | Text
      Final rule.
      Effective Date: January 6, 2016.
      24 CFR Parts 4, 5, 92, 115, 125, 135, 200, 202, 214, 236, 242, 248, 266, 401, 570, 573, 574, 576, 578, 582, 583, 700, 761, 880, 881, 882, 883, 884, 886, 891, 902, 905, 943, 963, 964, 965, 970, 982, 990, 1000, 1003, and 1006