24 C.F.R. Subpart C—Assistance Payments—Homes for Lower Income Families
Title 24 - Housing and Urban Development
Source: 41 FR 1178, Jan. 6, 1976, unless otherwise noted.
The definitions contained in §235.5 shall apply to this subpart. In addition the term assistance payment means that portion of a homeowner's or cooperative member's monthly mortgage payment which the Secretary becomes obligated to pay under an assistance payment contract. This subpart shall constitute the contract between the mortgagee and the Secretary for assistance payments pursuant to section 235(b) of the National Housing Act. (a) Homeowners. The issuance of a mortgage insurance certificate pursuant to §235.1 et seq. shall also constitute the execution of the assistance payment contract with respect to the mortgage being insured. (b) Cooperative members. The issuance of a certificate approving an application filed on behalf of a cooperative member shall constitute the execution of the assistance payment contract with respect to member named in the certificate. To qualify for assistance payments, the homeowner's income at the time of application for assistance, shall be within the limitations provided in §235.10, and the homeowner shall be a mortgagor under a mortgage insured or to be issued pursuant to subparts A and B to this part. To qualify for assistance payments, the homeowner shall not have paid in connection with the purchase of the property with respect to which assistance payments are to be made more than the Secretary's estimate of value of such property, nor shall the purchase price exceed 120 percent of the mortgage amount established pursuant to §235.25 or §235.30, whichever is applicable. The following cooperative members shall qualify for assistance payments subject to the requirement of this subpart C: (a) A member of a cooperative association which operates a housing project financed with a mortgage insured under §§213.1 through 213.280 or §§221.502 through 221.790 of this chapter pursuant to Section 221(d)(3) of the National Housing Act provided: (1) The housing project has been constructed or substantially rehabilitated not more than two years prior to the filing of the application for assistance payments and the dwelling unit had no previous occupant, or (2) The cooperative member acquired membership and occupancy rights from one who was receiving assistance payments, or (3) The cooperative member meets one of the following qualifications: (i) The member's family is displaced from an urban renewal area, or as a result of a governmental action, or as a result of a major disaster as determined by the President. (ii) The member's family shall include five or more minor persons. (iii) The member's family shall have been occupying low-rent public housing at the time the application for assistance payments is filed, or (4) That, without such assistance, the cooperative member would be likely to be involuntarily displaced from a dwelling in the project in connection with its conversion from rental to cooperative housing. Provided, That any family (i) which, by virtue of threatened displacement from a unit in a housing project to be operated by a cooperative association would be eligible for assistance under this provision in order to occupy a one-family unit in the resulting housing project, and (ii) which is precluded from such occupancy and membership in the cooperative association because of a rule of the association, may be entitled to assistance under this section in connection with a single family dwelling or a one-family unit in another housing project to be operated by a cooperative association, which otherwise meets the standards of this subsection and which is located in the same market area. (b) A member of a cooperative association which operates a housing project which is financed under a State or local program providing assistance through loans, loan insurance or tax abatements, and which prior to completion of construction or rehabilitation is approved for receiving the benefits of this section. (c) Eligibility as a cooperative member under this subpart also requires eligible status with respect to citizenship or eligible immigration status determined in accordance with 24 CFR part 200, subpart G. (See §235.13.) [45 FR 62796, Sept. 22, 1980, as amended at 46 FR 56422, Nov. 17, 1981; 46 FR 61455, Dec. 17, 1981; 51 FR 11219, Apr. 1, 1986; 53 FR 846, Jan. 13, 1988; 60 FR 14833, Mar. 20, 1995] (a) With respect to mortgages insured pursuant to conditional commitments issued or preliminary reservations approved before July 13, 1981, the maximum amount of the mortgage attributed to the dwelling unit of the cooperative member shall not exceed $32,000, except that such amount may be increased to $38,000 in the case of a family of five or more persons where the conditions set forth in §235.25(a)(2) are met. These amounts may be increased to $38,000 and $44,000, respectively, in any geographical area where the Secretary finds cost levels so require. (b) With respect to mortgages insured pursuant to conditional commitments issued or preliminary reservations approved on or after July 13, 1981, the maximum amount of the mortgage attributed to the dwelling unit of the cooperative member shall not exceed $40,000, except that such amount may be increased to $47,500 in the case of a family of five or more persons where the conditions set forth in §235.25(a)(2) are met. These amounts may be increased to $47,500 and $55,000, respectively, in any geographical area where the Secretary finds cost levels so require. [46 FR 29259, June 1, 1981] If the mortgage relates to a dwelling unit to be occupied by a handicapped person as defined in §235.5(c)(2), the otherwise applicable dollar amount limitation under §235.330 may be increased in such amount as may be necessary to reflect the cost of making the dwelling unit accessible to and usable by such person, but not to exceed 10 percent of such limitation. [49 FR 21320, May 21, 1984] (a) The assistance payment on behalf of a mortgagor shall be the lesser of the following: (1) The difference between 20 percent of the homeowner's or cooperative member's adjusted monthly income and the required monthly payment under the mortgage for principal, interest, taxes, insurance, and mortgage insurance premium. (2)(i) With respect to mortgages approved for insurance under this part by the Secretary before January 5, 1976, the difference between the required monthly payment under the mortgage for principal, interest, and mortgage insurance premium and the monthly payment which would be required for principal and interest if the mortgage bore an interest rate of 1 percent. (ii) With respect to mortgages approved for insurance under this part by the Secretary on or after January 5, 1976, but before March 7, 1978, the difference between the required monthly payment under the mortgage for principal, interest, and mortgage insurance premium and the monthly payment which would be required for principal and interest if the mortgage bore an interest rate of 5 percent. (iii) With respect to mortgages approved for insurance under this part by the Secretary on or after March 7, 1978, the difference between the required monthly payment under the mortgage for principal, interest, and mortgage insurance premium and the monthly payment which would be required for principal and interest if the mortgage bore an interest rate of 4 percent. (b) The assistance payment on behalf of a cooperative member shall be in an amount computed by using the formula prescribed in paragraph (a) of this section and applying the cooperative member's proportionate share of the obligation under the project mortgage to the items set forth in the formula. (c) In addition to the assistance payment referred to in paragraphs (a) and (b) of this section, the mortgagee shall be entitled to the monthly payment of an amount the Secretary deems sufficient to reimburse the mortgagee for its expense in handling the mortgage. (d) Special assessments levied by a governmental body are to be included under the term taxes as a part of the total monthly payment. However, ground rents, assessments of a homeowners' association, and special assessments levied by persons or private organizations are not to be included. [41 FR 1178, Jan. 6, 1976, as amended at 44 FR 25837, May 3, 1979] The assistance payment shall be due on the first day of each month and shall be paid upon the receipt of a billing, on a form prescribed by the Secretary, from the mortgagee or its authorized agent. (a) Homeowners. The term of the assistance payment contract shall begin on the date of disbursement of mortgage proceeds as shown on the commitment for insurance and shall continue until the contract is terminated pursuant to §235.375. (b) Cooperative members. The term of the assistance payment contract shall begin on the date of issuance of a certificate approving an application filed on behalf of a cooperative member and shall continue until the contract is terminated pursuant to §235.375. (a) The mortgagee shall obtain from the homeowner (or from the cooperative association on behalf of the cooperative member), on a form prescribed by the Secretary a recertification as to occupancy, employment, family composition and income whenever one of the following events takes place: (1) Annually, no earlier than 60 days before and no later than 30 days after the anniversary date of the mortgage or at such other anniversary date as set by the Secretary; (2) No more than 30 days after the mortgagee is notified by the mortgagor or learns from any identifiable source: (i) That the mortgagor or any adult (21 years or older) member of the family residing in the household changes or begins employment which results in an increase in the family income reported in the original application for assistance or the most recent recertification. (ii) That the family income (excluding earnings of minors) has increased at least $50 per month (except in the case of a mortgagor under a mortgage insured before January 5, 1976). (iii) A new member is added to the family who is not born in the United States (except for a mortgagor described in 235.13(a) (1) or (2)). (3) At such other times as the Secretary may require. (b) With respect to mortgages insured under this part after January 5, 1976, the mortgagee shall obtain from the applicant-homeowner at the time application is made for assistance and at the time of annual recertification required under paragraph (a)(1) of this section, on a form provided by the Secretary, a statement of the aggregate amounts of total income prior to adjustments reported for all family members (other than minors) by the applicant-homeowner in his most recent federal income tax return, if he is required to file such a return. If separate returns are filed by separate members of the family, the total income prior to adjustments included in all such returns (except returns of minors) shall be reported. If the income so reported is more than 25 percent above the income reported on the recertification the mortgagee shall obtain from the homeowner a new recertification or a written explanation of the difference in income reported on the two forms. (c) Mortgagors who fail to disclose their actual income in accordance with the requirements of this part will be required to reimburse the Secretary for all overpayments made on their behalf. (d) The homeowner must meet the disclosure and verification requirements for Social Security Numbers in connection with any recertification under this section, as provided by part 200, subpart T, of this chapter. For requirements regarding the signing and submitting of consent forms by homeowners for the obtaining of wage and claim information from State Wage Information Collection Agencies, see part 200, subpart V, of this chapter. [41 FR 1178, Jan. 6, 1976, as amended at 43 FR 60156, Dec. 26, 1978; 54 FR 39695, Sept. 27, 1989; 55 FR 11905, Mar. 30, 1990; 56 FR 7530, Feb. 22, 1991; 60 FR 14833, Mar. 20, 1995] Upon request of the mortgagor or cooperative member, the mortgagee must accept recertification whenever the mortgagor, his or her spouse, or an adult (21 years or older) member of the family changes or loses employment which results in a decrease in the family income reported in the most recent certification or recertification. This recertification must be on a form prescribed by the Secretary. See 24 CFR 200.1015(d)(2)(i) for the requirements for the disclosure and verification of Social Security Numbers for recertifications involving new family members. [54 FR 39595, Sept. 27, 1989, as amended at 55 FR 11905, Mar. 30, 1990] The mortgagee shall make appropriate adjustments in the amount of the requested assistance payments to reflect changes in family income reported in any required or optional recertification of the homeowner or cooperative member. The adjustment shall not be retroactive except at the discretion of the Secretary. The adjustment shall apply only to assistance payments beginning with the payment due no earlier than the first day of the month following and no later than the first day of the second month following the date the mortgagor's recertification is received by the mortgagee. (a) The mortgagee shall refund to the Secretary all overpaid assistance payments except where the mortgagee has filed a claim for mortgage insurance benefits or the mortgage has been paid in full or the mortgagor has sold the property to an assumptor, and the overpayment did not result from the fraud, misrepresentation or failure to meet contractual obligations, on the part of the mortgagee. (b) The mortgagee shall refund to the Secretary all overpaid assistance payments, together with the handling charges paid for each month of overpayment and interest on the amount refunded at the rate of 7% per annum, in any case where the overpayment resulted from fraud, misrepresentation or failure to meet contractual obligations, on the part of the mortgagee. (c) The mortgagee may increase the mortgagor's required monthly payments in an amount which will reimburse the mortgagee (except handling charges and interest) within a reasonable time without causing undue hardship to the mortgagor, except where the overpayment resulted from fraud or misrepresentation on the part of the mortgagee. (d) For purposes of this section overpaid assistance payments means assistance payments which the Secretary paid to the mortgagee on behalf of a mortgagor in excess of the amount of benefits to which the mortgagor was entitled and failure to meet contractual obligations means failure to request a required recertification or failure to act on a recertification as required in this part. [43 FR 60156, Dec. 26, 1978] The mortgagee shall maintain such records as the Secretary may require with respect to the mortgagor's payments, the mortgage assistance payments received from the Secretary, and the annual recertifications of financial status from the homeowner or mortgagor. Such records shall be kept on file for a period of time and in a manner prescribed by the Secretary and shall be available, when requested, for review and inspection by the Secretary or the Comptroller General of the United States. Where a mortgage covered by an assistance payment contract is sold to another approved mortgagee, the buyer shall succeed to all the rights and become bound by all the obligations of the seller under such contract. (a) Termination. The assistance payments contract shall be terminated when any of the following events occur: (1) The contract of mortgage insurance is terminated, except when the mortgage has been assigned to the Secretary. (2) The property is purchased by a homeowner not qualified to receive assistance payments. (3) The cooperative member transfers his membership and occupancy rights to a new cooperative member not qualified to receive assistance payments. (4) When the assistance payments contract has been suspended for a period of three years without reinstatement. (b) Suspension. The assistance payments contract shall be suspended when any one of the following events occur: (1) The homeowner or cooperative member ceases to occupy the property, except in the following instances: (i) The property is purchased by a homeowner who immediately assumes the mortgage obligation with respect to which assistance payments have been made on behalf of the previous owner, and who meets the income and asset requirements prescribed by the Secretary. (ii) The cooperative member transfers his membership and occupancy rights to a new member who assumes the mortgage obligation and who meets the income and asset requirements prescribed by the Secretary. (2) The mortgagee determines that the mortgagor or cooperative member ceases to qualify for the benefits of assistance payments by reason of his income increasing to an amount enabling him to pay the full monthly mortgage payment by using 20 percent of the family income. (3) Foreclosure is instituted. (4) The mortgagee is unable to obtain from the homeowner (or from the cooperative association on behalf of the cooperative member) a required recertification of occupancy, employment, income, and family composition, and (if required) disclosure and verification of Social Security Numbers, as prescribed in §235.350, and (if required) signed consent forms for the obtaining of wage and claim information from State Wage Information Collection Agencies, as prescribed in §235.350. (5) At such other times as the Secretary may require. (6) Failure to provide evidence of citizenship or eligible immigration status in accordance with 24 CFR part 5: (i) For a new member of the family, except with respect to a mortgagor described under §235.1. (ii) At the first recertification of an assistance contract, except with respect to a mortgagor described under §235.1; or (iii) Upon modification of an existing assistance contract. (c) Effect of termination or suspension. Upon termination or suspension of the assistance payments contract, the payment due on the first day of the month in which the termination or suspension occurs shall be the last payment to which the mortgagee shall be entitled; except that, in the case of a suspended contract, payment may be resumed after the contract is reinstated pursuant to paragraph (e) of this section. (d) Noneffect on mortgage insurance contract. The termination or suspension of the assistance payments contract, where the mortgage insurance contract is not simultaneously terminated, shall have no effect on the mortgage insurance contract. (e) Reinstatement. Where the assistance payments contract is suspended, it may be reinstated by the Secretary at the Secretary's discretion and on such conditions as the Secretary may prescribe. To be eligible for reinstatement under this section, the mortgagor or cooperative member must meet the requirements for the disclosure and verification of Social Security Numbers, as provided by part 200, subpart T, of this chapter, and the requirements for the signing and submitting of consent forms for the obtaining of wage and claim information from State Wage Information Collection Agencies, as provided by part 200, subpart V of this chapter. [41 FR 1178, Jan. 6, 1976, as amended at 43 FR 60157, Dec. 26, 1978; 46 FR 56422, Nov. 17, 1981; 51 FR 11219, Apr. 1, 1986; 53 FR 846, Jan. 13, 1988; 54 FR 39695, Sept. 27, 1989; 55 FR 11905, Mar. 30, 1990; 56 FR 7530, Feb. 22, 1991; 61 FR 13624, Mar. 27, 1996] 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 shall not adversely affect the interest of a mortgagee under an existing contract for assistance payments. The effective date of these regulations is January 5, 1976.
Title 24: Housing and Urban Development
PART 235—MORTGAGE INSURANCE AND ASSISTANCE PAYMENTS FOR HOME OWNERSHIP AND PROJECT REHABILITATION
Subpart C—Assistance Payments—Homes for Lower Income Families
§ 235.301 Definitions.
§ 235.305 Contract for assistance payments.
§ 235.310 Execution of assistance payment contract.
§ 235.315 Qualified homeowners.
§ 235.320 Limitation of sales price.
§ 235.325 Qualified cooperative members.
§ 235.330 Cooperative unit eligible for assistance payments.
§ 235.331 Increased maximum mortgage amount for physically handicapped persons.
§ 235.335 Assistance payments and handling charges.
§ 235.340 Time of payments.
§ 235.345 Term of assistance contract.
§ 235.350 Mortgagor's required recertification.
§ 235.355 Mortgagor's optional recertification.
§ 235.360 Adjustment in assistance payments.
§ 235.361 Recovery of assistance payments.
§ 235.365 Mortgagee records.
§ 235.370 Effect of assignment of mortgage with an assistance payment contract.
§ 235.375 Termination, suspension, or reinstatement of the assistance payments contract.
§ 235.499 Effect of amendments.
