(b) "Secretary" means the Secretary of Housing and Urban Development or his authorized representatives.

(c) "Commissioner" means the Federal Housing Commissioner or his authorized representatives.

(d) "Improvements" mean water lines and water supply installations, sewer lines and sewage disposal installations; steam, gas, and electric lines and installations; roads; streets; curbs; gutters; sidewalks; storm drainage facilities; and other installations or work, whether on or off the site of the mortgaged property, which the Commissioner deems necessary or desirable to prepare land primarily for residential and related uses or to provide facilities for public or common use. Related uses may include industrial uses, with sites for such uses to be in proper proportion to the size and scope of the developments. The public or common facilities shall include only such buildings as are needed in connection with water supply or sewage disposal installations; or steam, gas, or electric lines or installations; and such buildings, other than schools, as the Commissioner considers appropriate, which are to be owned and maintained jointly by the property owners.

(e) "Insured mortgage" means a mortgage insured by the endorsement of the credit instrument by the Commissioner.

(f) "Land development" means the process of making, installing, or constructing improvements.

(g) "Local public body" means a county, city, or other political subdivision within which a land development project or part of such project is established, and any other political subdivision, public agency, or instrumentality of one or more States, counties, or political subdivisions empowered under law to take or withhold any action required in connection with the establishment of such project.

(h) "Maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with the payments provided for in the mortgage.

(i) "Mortgage" means such a first lien upon real estate and other property as is commonly given to secure advances on, or the unpaid purchase

price of, real estate under the laws of the State, district or territory in which the real estate is located, together with the credit instrument or instruments, if any, secured thereby.

(j) "Mortgagee" means the original lender under a mortgage, and its successors and assigns, and includes the holders of credit instruments issued under a trust indenture, mortgage or deed of trust pursuant to which such holders act by and through a trustee therein named.

(k) "Mortgagor" means the original borrower under a mortgage and its successors and assigns.

(1) "Project" means the land development and improvements which meet the land development criteria established by the Commissioner and which are to be paid for in part with proceeds of an insured mortgage or mortgages.

(m) "State" includes the several States, Puerto Rico, the District of Columbia, Guam, and the Virgin Islands. (n)-(o) [Reserved]

(p) "State" includes the several States Puerto Rico, the District of Columbia Guam, the Trust Territory of the Pacific Islands, and the Virgin Islands.

APPLICATIONS, SAMA LETTER AND COMMITMENTS

§ 205.5 Applications.

(a) An application for the issuance of a Site Appraisal and Market Analysis (SAMA) letter must be submitted by the project sponsor. An application for a conditional or firm commitent for insurance of a mortgage shall be submitted by the project sponsor and an approved mortgagee. An applicant may initially elect to submit an application to the local HUD office for a SAMA letter, conditional commitment or firm commitment depending upon the completeness of the drawings, specifications and other required exhibits. An applicant also may elect to proceed directly to the firm commitment processing stage after issuance of a SAMA letter.

(b) All applications shall be submitted to the local HUD Field Office on HUD approved forms. No application

Ishall be considered unless the information, documents and exhibits required in connection with the application form are submitted with it.

(Title X of the National Housing Act (12 U.S.C. 1749aa et seq.))

[44 FR 64404, Nov. 7, 1979]

§ 205.7 Effect and term of SAMA letter. (a) Effect of SAMA letter. The issuance of a SAMA letter indicates that HUD has completed the site appraisal and market analysis stage of processing to determine initial acceptability of the site and recognition of a specific market need. The SAMA letter is not a commitment to insure a mortgage for the proposed land development and does not bind HUD to issue either a conditional or a firm commitment to insure. The SAMA letter precedes the later submission of acceptable plans, specifications and other data for the proposed land development and is limited to advising the applicant as to the following determinations of the Commissioner which shall not be changed to the detriment of an applicant if the application for a conditional or firm commitment is received before expiration of the SAMA letter:

(1) The "as-is" value of the land;

(2) The value of typical lots (in first stage, if a staged land development project) after development;

(3) The acceptability of the type of project proposed;

(4) The acceptability of any community improvements proposed or required (in the first stage, if a staged land development project);

(5) The completion of an environmental assessment and clearance (including Environmental Impact Statement, if necessary) pursuant to Departmental instructions and regulations; and

(6) The acceptability of the market for the proposed land development project and the estimated absorption period.

Where the application is not acceptable as submitted, but can be made acceptable by a change in the size or nature of the development, the SAMA letter may establish an acceptable alternative plan based on such changed land development project.

(b) Term of SAMA letter. A SAMA letter shall be effective for whatever term is specified in the letter.

(Title X of the National Housing Act (12 U.S.C. 1749aa et seq.))

[44 FR 64404, Nov. 7, 1979]

§ 205.9 Effect and terms of commitments.

(a) Effect of conditional commitment. The issuance of a conditional commitment indicates completion of technical processing involving:

(1) The acquisition cost of the land; (2) The acreage, number of lots and community improvements;

(3) The estimated development cost of the project and the estimated construction period;

(4) The financial requirements and the mortgage amount;

(5) The financial and credit capacity of the sponsorship; and

(6) The Development Report for the proposed project, which is prepared by the Field Office; and which incorporates the construction schedule, the building program, land uses, and all required development improvements that are to be installed in the project.

(b) Effect of firm commitment. The issuance of a firm commitment indicates HUD's approval of the application for insurance and sets forth the terms and conditions upon which the mortgage will be insured.

(c) Rejection of an application. A significant deviation in an application from the terms or findings arrived at in an earlier stage, as evidenced by the SAMA letter or conditional commitment, shall be grounds for rejection of an application for conditional or firm commitment, respectively. The fees paid to such date shall be considered as having been earned notwithstanding such rejection.

(d) Types of firm commitment. The firm commitment may provide for the insurance of advances of mortgage money made during construction or may provide for the insurance of the mortgage after completion of the improvements.

(e) Terms of commitments. (1) A conditional commitment shall be effective for whatever term is specified in the text of the commitment.

(2) A firm commitment to insure advances shall be effective for a period of not more than 60 days from the date of issuance.

(3) A firm commitment to insure upon completion shall be effective for a designated term within which the mortgagor is required to begin construction, and, if construction is begun as required, the commitment shall be effective for such additional period, estimated by HUD, as will allow for completion of construction.

(4) The term of either a conditional or a firm commitment may be extended in such a manner as the Commissioner may prescribe.

(f) Reopening of expired commitments. An expired conditional or firm commitment may be reopened if a request for reopening is received by HUD within 90 days of the expiration of the commitment. If the reopening request is not received by HUD within the required 90-day period, a new application, accompanied by the required application and commitment fees, must be submitted.

(Title X of the National Housing Act (12 U.S.C. 1749aa et seq.))

[44 FR 64404, Nov. 7, 1979]

FEES AND CHARGES

§ 205.10 Application

fees. (a) Application fee-SAMA letter. An application fee of $1 per thousand dollars of the requested mortgage amount to be insured shall accompany the application for a SAMA letter.

(b) Application fee-conditional

commitment. An application fee of $1 per thousand dollars of the requested mortgage amount to be insured shall accompany the application for conditional commitment in cases in which the application fee for an unexpired SAMA letter has been collected. A fee of $2 per thousand dollars of the requested mortgage amount to be insured shall accompany the application for conditional commitment in cases in which the SAMA application fee has been paid but the SAMA letter has expired or in cases in which a SAMA application fee has not been paid.

(c) Application fee-firm commitment. An application for firm commit

ment shall be accompanied by an application fee which, when added to prior fees received in connection with applications for the SAMA letter and the conditional commitment, will aggregate $4.50 per thousand dollars of the requested mortgage amount to be insured.

(d) Reopening fee-conditional or firm commitment. A reopening request shall be accompanied by a fee of 50 cents per thousand dollars of the mortgage amount set forth in the expired commitment.

(Title X of the National Housing Act; 12 U.S.C.1749aa et seq.)

[44 FR 64404, Nov. 7, 1979]

§ 205.17 Fees on increases.

(a) Increase in firm commitment prior to endorsement. An application, filed prior to initial endorsement (or prior to endorsement in a case involving insurance upon completion), for an increase in the amount of an outstanding firm commitment shall be accompanied by a combined additional application and commitment fee. This combined additional fee shall be in an amount which will aggregate $4.50 per thousand dollars of the amount of the requested increase.

(b) Increase in mortgage between initial and final endorsement. Upon an application, filed between initial and final endorsement, for an increase in the amount of the mortgage, either by amendment or by substitution of a new mortgage, a combined additional application and commitment fee shall accompany the application. This combined additional fee shall be in an amount which will aggregate $4.50 per thousand dollars of the amount of the increase requested.

§ 205.18 Fees not required.

The payment of an application, commitment, inspection, or reopening fee shall not be required in connection with the insurance of a mortgage involving the sale by the Secretary of any property acquired under any section or title of the Act.

[41 FR 14861, Apr. 8, 1976]

If the amount of the commitment issued or increase in mortgage granted is less than the amount applied for, the Commissioner shall refund the excess amount of the application and commitment fees submitted by the applicant. If an application is rejected before it is assigned for processing, or in such other instances as the Commissioner may determine, the entire application and commitment fees or any portion thereof may be returned to the applicant. The commitment and reopening fee may be refunded, in whole or in part, if it is determined by the Commissioner that there is a lack of need for the housing or that the construction or financing of the project has been prevented because of condemnation proceedings or other legal action taken by a governmental body or public agency, or in such other instances as the Commissioner may determine. A transfer fee may be refunded only in such instances as the Commissioner may determine.

§ 205.25 Maximum fees and charges by

mortgagee.

The mortgagee may collect from the mortgagor the amount of the fees provided for in this subpart. The mortgagee may also collect from the mortgagor an initial service charge in an amount not to exceed 2 percent of the original principal amount of the mortgage, to reimburse the mortgagee for the cost of closing the transaction. Any additional charges or fees collected from the mortgagor shall be subject to prior approval of the Commissioner.

ELIGIBLE MORTGAGORS

§ 205.30 Eligible mortgagors.

(a) General requirements. In order t be eligible as a mortgagor under th subpart, the applicant must be a mor gagor approved by the Commissione which is regulated or restricted by th Commissioner as to capital structur use of property and methods of ope ation. A public body shall not be elig ble for approval as a mortgagor. Th regulation or restriction of the mor gagor shall continue until the termina tion of all obligations of the Commis sioner under the insurance contrac and during such further period of tim as the Commissioner shall be th owner, holder, or reinsurer of th mortgage. The regulation or restric tion may be in the form of a regula tory agreement, corporate charter of such other means as the Commission er may approve.

(b) Special requirements-water o sewer systems. The owner of a private ly or cooperatively owned water or sewer system may be approved as a mortgagor. Such mortgagor shall be regulated by the Commissioner with respect to capital structure, methods of operation, rate of return, user rates and charges, and the terms and condtions of any sale or transfer. This regulation by the Commissioner shall continue for the entire period of private or cooperative ownership or until the Commissioner is satisfied that adequate provision exists through governmental regulation or other means, to protect the system users as to the methods of operation, rates, charges, and disposition of such system.

ELIGIBLE MORTGAGEES

§ 205.35 Qualification of lenders.

The provisions of §§ 203.1 through 203.4 and 203.6 through 203.9 of this chapter shall govern the eligibility, qualifications and requirements of mortgagees under this subpart.

ELIGIBLE MORTGAGES

§ 205.40 Mortgage forms.

(a) Approval of forms. The mortgage shall be executed upon a form ap