24 CFR 266.410 - Mortgage provisions.

§ 266.410 Mortgage provisions.

(a)Form. The mortgage and note must be executed on a form approved by the HFA for use in the jurisdiction in which the property is located.

(b)Mortgagor. The mortgage must be executed by a mortgagor determined eligible by the HFA.

(c)First lien. The mortgage must be a single first lien on property that has first priority for payment and that conforms with property standards prescribed by the HFA.

(d)Single asset mortgagor. The mortgage must require that the mortgagor is a single asset mortgagor.

(e)Amortization. The mortgage must provide for complete amortization (i.e., regularly amortizing) over the term of the mortgage.

(f)Use restrictions. The mortgage must contain a covenant prohibiting the use of the property for any purpose other than the purpose intended on the day the mortgage was executed. The conversion of a project from rental to cooperative is not a “change in use” as that term is employed in the mortgage since the property will continue to have a residential use both before and after conversion.

(g)Hazard insurance. The mortgage must contain a covenant, acceptable to the HFA, that binds the mortgagor to keep the property insured by one or more standard policies for fire and other hazards stipulated by the HFA. A standard mortgagee clause making loss payable to the HFA must be included in the mortgage. The HFA is responsible for assuring that insurance is maintained in force and in the amount required by this paragraph and the mortgage. The HFA must ensure that the insurance coverage is in an amount that will comply with the coinsurance clause applicable to the location and character of the property, but not less than 80 percent of the actual cash value of the insurable improvements and equipment. If the mortgagor does not obtain the required insurance, the HFA must do so and assess the mortgagor for such costs. These insurance requirements apply as long as the HFA retains an interest in the project and final claim settlement has not been completed or the contract of insurance has not been otherwise terminated.

(h)Modification of terms. The mortgage must contain a covenant requiring that, in the event that the HFA and owner agree to a modification of the terms of the mortgage (e.g., to reflect a reduction of the interest rate if reductions are realized in the underlying bond rates for the project), Section 8 rents would be reduced in accordance with HUD guidelines.

(i)Regulatory Agreement. The mortgage must contain a provision incorporating the Regulatory Agreement by reference.

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].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
U.S. Code: Title 12 - BANKS AND BANKING

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 266 after this date.

  • 2016-03-31; vol. 81 # 62 - Thursday, March 31, 2016
    1. 81 FR 18473 - Changes in Certain Multifamily Mortgage Insurance Premiums and Regulatory Waiver for the 542(c) Risk-Sharing Program
      GPO FDSys XML | Text
      DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, HUD, Office of the Assistant Secretary for Housing-Federal Housing Commissioner
      Announcement and waiver.
      Effective Date: The revised MIP will be effective for any firm commitments issued or reissued on or after April 1, 2016. MIP rates will not be modified for any loans that close or reach initial endorsement prior to or on March 31, 2016. MIP rates will not be modified on FHA-insured loans initially or finally endorsed, in conjunction with interest rate reductions, or in conjunction with loan modifications. MIP rates for the 542(c) Risk-Sharing program will be eligible only through FY 2017.
      24 CFR Part 266