24 C.F.R. Subpart B—Contract Rights and Obligations—Individually Owned Units
Title 24 - Housing and Urban Development
The definitions in §203.251 of this chapter apply to this subpart. [61 FR 60163, Nov. 26, 1996] (a) Provisions. All of the provisions of §§203.251 through 203.436 of this chapter (part 203, subpart B) covering mortgages insured under section 203 of the National Housing Act shall apply to mortgages insured under section 234(c) of the National Housing Act except the following provisions:
Sec. 203.258 Substitute mortgagors. 203.259a Scope. 203.280 One-time MIP. 203.281 Calculation of one-time MIP. 203.282 Mortgagee's late charge and interest. 203.283 Refund of one-time MIP. 203.357 Deed in lieu of foreclosure. 203.378 Property condition. 203.379 Adjustment for damage or neglect. 203.380 Certificate of property condition. 203.389 Waived title objections. 203.420 Nature of Mutual Mortgage Insurance Fund. 203.421 Allocation of Mutual Mortgage Insurance Fund income or loss. 203.422 Right and liability under Mutual Mortgage Insurance Fund. 203.423 Distribution of distributive shares. 203.424 Maximum amount of distributive shares. 203.425 Finality of determination. 203.440 et seq. Insured home improvement loans. (b) References. For the purposes of this subpart, all references in §§203.251 through 203.436 of this chapter (part 203, subpart B) to section 203 of the Act, one- to four-family, and the Mutual Mortgage Insurance Fund, shall be construed to refer to section 234 of the act, one-family unit, and the General Insurance Fund. The term property or each family dwelling unit as used in §§203.251 through 203.436 of this chapter (part 203, subpart B) shall be construed to include “the one-family unit and the undivided interest in the common areas and facilities as may be designated”. [36 FR 24628, Dec. 22, 1971, as amended at 41 FR 42949, Sept. 29, 1976; 42 FR 29305, June 8, 1977; 48 FR 28807, June 23, 1983; 55 FR 34814, Aug. 24, 1990] (a) Selling mortgagor. The requirements for the selling mortgagor are set forth in §203.258(a) of this chapter. (b) Purchasing mortgagor. (1) If the dwelling is a principal or secondary place of residence, the requirements for the purchasing mortgagor are set forth in §203.258(b)(1) of this chapter. (2) [Reserved] (c) Applicability—current mortgagor. Paragraph (b) of this section applies to the Commissioner's approval of a substitute mortgagor only if the mortgage executed by the original mortgagor met the conditions of §203.258(c) of this chapter. (d) Applicability—earlier mortgagor. The occupancy and similar requirements set forth in §203.258(d) of this chapter apply to mortgages insured under subpart A of this part. (e) Direct endorsement. Requirements for the direct endorsement program are set forth in §203.258(f) of this chapter. (f) Substitute mortgagor is defined in §203.258(f) of this chapter. [55 FR 34814, Aug. 24, 1990, as amended at 57 FR 38352, Dec. 9, 1992; 61 FR 60163, Nov. 26, 1996] Section 203.436 of this chapter applies to mortgages under this subpart. [61 FR 60163, Nov. 26, 1996] In addition to the requirements of §§203.350 through 203.353 incorporated by reference, the mortgagee shall certify as to any changes in the plan of apartment ownership including the administration of the property. Any changes shall require FHA approval. [36 FR 24628, Dec. 21, 1971, as amended at 42 FR 29305, June 8, 1977] All of the provisions of §203.357 of this chapter relating to acceptance of a deed in lieu of foreclosure shall apply to mortgages insured under this part only if the mortgagee establishes to the satisfaction of the Commissioner that there are no unpaid assessments owed the Association or Cooperative of Owners. In addition to the requirements of §203.367, incorporated by reference, the deed shall comply with the plan of apartment ownership. Any changes therein, including the administration of the property, shall require FHA approval. (a) When a family unit is conveyed or a mortgage is assigned to the Commissioner, the family unit and the common areas and facilities designated for the particular unit shall be undamaged by fire, flood, earthquake, tornado, or boiler explosion, or, as to mortgagesinsuredonorafterJanuary 1, 1977, due to failure of the mortgagee to take action as required by §203.377. If the property has been damaged, either of the following actions shall be taken: (1) The property may be repaired prior to its conveyance or prior to the assignment of the mortgage to the Commissioner. (2) If the prior approval of the Commissioner is obtained, the damaged property may be conveyed or the mortgage assigned to the Secretary without repairing the damage. In such instances, the Commissioner shall deduct from the insurance benefits either his estimate of the decrease in value of the family unit or the amount of any insurance recovery received by the mortgagee, whichever is the greater. (b) If the property has been damaged by fire and such property was not covered by fire insurance at the time of the damage, the mortgagee may convey the property or assign the mortgage to the Commissioner without deduction from the insurance benefits for any loss occasioned by such fire if the following conditions are met: (1) The property shall have been covered by fire insurance at the time the mortgage was insured. (2) The fire insurance shall have been later cancelled or renewal shall have been refused by the insuring company. (3) The mortgagee shall have notified the Commissioner within 30 days (or within such further time as the Commissioner may approve) of the cancellation of the fire insurance or of the refusal of the insuring company to renew the fire insurance. This notification shall have been accompanied by a certification of the mortgagee that diligent efforts were made, but it was unable to obtain fire insurance coverage at reasonably competitive rates and that it will continue its efforts to obtain adequate fire insurance coverage at competitive rates, including coverage under the FAIR Plan. A reasonable rate is a rate not more than 25 percent in excess of the rate or the advisory rate filed or used by the principal rating organization doing business in the state. If the property is located in a state which has no rate or advisory rate as provided in the preceding sentence, the mortgagee shall consult the Director of the local HUD office as to a reasonable rate. When hazard insurance coverage cannot be obtained in an amount equal to the unpaid principal balance of the loan but insurance can be obtained in a reduced amount from a FAIR Plan or another insurance carrier, the Secretary will accept the reduced coverage without reduction of mortgage, insurance benefits, if the rates do not exceed the guidelines stated herein. If coverage in any amount is only available at rates in excess of a reasonable rate as defined herein, the mortgagor may but shall not be required to purchase such coverage. If coverage is purchased, the amount of any claim for insurance benefits under this part shall be reduced by the amount of any recovery of hazard insurance benefits by the mortgagee. (c) The provisions in paragraph (b) of this section shall be applicable with respect to the insurance of all mortgages whether insured prior to May 8, 1968, or insured on or after such date. (d) The mortgagee shall not be liable for damage to the property by waste in connection with mortgage insurance claims paid on or after July 2, 1968. However, the mortgagee shall be responsible for damage to or destruction of security properties on which the loans are in default and which properties are vacant or abandoned due to the mortgagee's failure to take reasonable action to inspect, protect and preserve such properties as required by §203.377, as to all mortgages insured on or after June 8, 1977, but such responsibility shall not exceed the amount of its insurance claim as to a particular property. [36 FR 24628, Dec. 22, 1971, as amended at 42 FR 29305, June 8, 1977] When a family unit is conveyed to the Commissioner or a mortgage is assigned to the Commissioner, the unit shall be assessed and subject to assessment for taxes pertaining only to that unit. The mortgagee shall certify, as of the date of filing for record of the deed or assignment of the mortgage to the Commissioner, that the family unit is assessed and subject to assessment for taxes pertaining only to that unit. The mortgagee shall either certify that as of the date of the filing of deed for record, or assignment of the mortgage to the Secretary, the property was (a) undamaged by fire, flood, earthquake, tornado or boiler explosion, and (b) as to mortgages insured or for which commitments to insure are issued on or after June 8, 1977, undamaged due to failure of the mortgagee to take action as required by §203.377, or its claim shall be accompanied by a statement describing any such damage that may still exist together with a copy of the Secretary's authorization to convey the property in damaged condition. In the absence of evidence to the contrary, the mortgagee's certificate or its statement as to damage shall be accepted by the Secretary as establishing the condition of the family unit and the common areas and facilities designated for the particular unit. [42 FR 29305, June 8, 1977] The provisions of §203.382 incorporated by reference shall apply to hazard insurance policies carried solely for the family unit. 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) Easements for public utilities along one or more of the property lines, provided the exercise of the rights thereunder do not interfere with any of the buildings or improvements located on the subject property. (c) Encroachment on the subject property by improvements on adjoining property, provided such encroachments do not interfere with the use of any improvements on the subject property. (d) Variations between the length of the subject property lines as shown on the application for insurance and as shown by the record or possession lines, provided such variations do not interfere with the use of any of the improvements on the subject property. (e) Customary building or use restrictions for breach of which there is no reversion and which have not been violated to a material extent. (f) Federal tax liens and rights of redemption arising therefrom if the following conditions are observed. If the mortgagee acquires the property by foreclosure the mortgagee shall give notice to the Internal Revenue Service (IRS) of the foreclosure action. The Commissioner will not object to an outstanding right of redemption in IRS if: (1) The Federal tax lien was perfected subsequent to the date of the mortgage lien, and (2) the mortgagee has bid an amount sufficient to make the mortgagee whole if the property is in fact redeemed by the IRS. [36 FR 24628, Dec. 22, 1971, as amended at 42 FR 29305, June 8, 1977]
Title 24: Housing and Urban Development
PART 234—CONDOMINIUM OWNERSHIP MORTGAGE INSURANCE
Subpart B—Contract Rights and Obligations—Individually Owned Units
§ 234.251 Definitions.
§ 234.255 Cross-reference.
§ 234.256 Substitute mortgagors.
§ 234.259 Claim procedure—graduated payment mortgages.
§ 234.260 Assignment of mortgage and certificate by mortgagee.
§ 234.262 Exception to deed in lieu of foreclosure.
§ 234.265 Contents of deed and supporting documents.
§ 234.270 Condition of the multifamily structure.
§ 234.273 Assessment of taxes.
§ 234.274 Certificate of tax assessment.
§ 234.275 Certificate or statement of condition.
§ 234.280 Cancellation of hazard insurance.
§ 234.285 Waived title objections.
