prescribe: Provided, That this paragraph shall not be applicable to any loan so long as it is held in a common trust fund maintained by a bank or trust company exclusively for the collective investment and reinvestment of moneys contributed thereto by the bank or trust company in its capacity as a trustee, executor or administrator; and in conformity with the rules and regulations prevailing from time to time of the Board of Governors of the Federal Reserve System, pertaining to the collective investment of trust funds: Provided further, That this paragraph shall not be applicable to any loan so long as it is held in a common trust estate administered by a bank or trust company which is subject to the inspection and supervision of a governmental agency, exclusively for the benefit of other banking institutions which are subject to the inspection and supervision of a governmental agency, and which are authorized by law to acquire beneficial intersts in such common trust estate, nor to any loan transferred to such a bank or trust company as trustee exclusively for the benefit of outstanding owners of undivided interest in the trust estate, under the terms of certificates issued and sold more than three years prior to said transfer, by a corporation which is subject to the inspection and supervision of a governmental agency.

Subpart E-Servicing Responsibilities-Homes

§ 220.900 Cross-reference.

All of the provisions of Subpart C, Part 203 of this chapter concerning the responsibilities of services of mortgages insured under section 203 of the National Housing Act apply to mortgages covering 1- to 11-family dwellings insured under section 220 of the National Housing Act.

[42 FR 29304, June 8, 1977]

203.17 Mortgage provisions.

203.18 Maximum mortgage amount.

203.18a Solar energy systems.

203.18b Increased mortgage amount.

203.19 Mortgagor's minimum investment.

203.28 Economic soundness of project.

203.40 Location of property.

203.42 Rental properties.

203.45 Eligibility of graduated paymen mortgages.

203.46 Eligibility of modified graduated payment mortgages.

203.50 Eligibility of rehabilitation loans.

(b) For the purposes of this subpart all references in Part 203 of this chap ter to section 203 of the Act shall be construed to refer to section 221 of the Act.

(Sec. 211 of the National Housing Act (12 U.S.C. 1709, 1715))

[36 FR 24587, Dec. 22, 1971, as amended at 41 FR 42949, Sept. 29, 1976; 44 FR 46836. Aug. 9, 1979; 45 FR 76389, Nov. 18, 1980]

§ 221.3 Definition of displaced family.

As used in this subpart, the term "displaced family” shall mean a family displaced from an urban renewal area, or as a result of governmental action. or as a result of a disaster determined by the President to be a major disas ter.

§ 221.5 Mortgage form.

The mortgage shall be executed upon a form approved by the Commissioner for use in the jurisdiction in which the property covered by the mortgage is situated and shall be a first lien upon property that conforms

the mortgage amount shall be limited as follows:

(a) Occupant mortgagors. (1) When the mortgagor is the occupant of the property, the mortgage shall not

exceed:

(i) The Commissioner's estimate of the appraised value of the property as of the date the mortgage is accepted for insurance, where repair and rehabilitation is not involved; or

(ii) In the case of rehabilitation, the amount of the mortgage shall not exceed the sum of the estimated cost of repair and rehabilitation and the Commissioner's estimate of the value of the property before repair and rehabilitation.

(2) The limitations in paragraph (a)(1) of this section are applicable only if the mortgage covers a dwelling which:

(i) Was approved for mortgage insurance prior to the beginning of construction, or

(ii) Was approved for guaranty, insurance, or a direct loan by the Administrator of Veterans Affairs prior to the beginning of construction, or

(iii) Was completed more than one year prior to the date of the application for mortgage insurance, or

(iv) Is covered by a consumer protection or warranty plan acceptable to the Secretary and satisfies all requirements which would have been applicable if such dwelling had been approved for mortgage insurance prior to the beginning of construction.

(3) If the conditions of paragraph (a)(2) are not met, the amount of the mortgage shall not exceed 90 percent of the amount computed under paragraph (a)(1) of this section.

(b) Nonoccupant mortgagors. If the property is to be built or acquired and rehabilitated for sale and the insured mortgage financing is required to facilitate the construction or the repair or rehabilitation of the dwelling and provide financing pending the subsequent sale thereof to a qualified owner-occupant, 85 percent of the amount computed under paragraph (a) or 85 percent of the value of the property, whichever is the lesser, as of the date the mortgage is accepted for insurance, if the mortgagor is not the occupant.

§ 221.30 Maturity of mortgage.

(a) The mortgage shall provide for complete amortization not to exceed 30 years from the date of the beginning of amortization of the mortgage, except that such maturity may be 35 or 40 years in the following instances:

(1) In the case of a displaced family, if it is determined by the Commissioner that the mortgagor is not able to make the required payments under a mortgage having a shorter amortization period.

(2) In the case of any other mortgagor, if it is determined by the Commissioner that the mortgagor is an owner occupant of the property and is not able to make the required payments under a mortgage having a shorter amortization period, and the dwelling:

(i) Was approved for mortgage insurance by the Commissioner prior to the beginning of construction or approved for guaranty, insurance, or direct loan by the Administrator of Veterans' Affairs prior to such amortization; and

(ii) Was inspected by the FHA and found to have been completed in compliance with the terms of the FHA commitment, or inspected by the VA and found to have been completed in compliance with the terms of the VA Certificate of Reasonable Value.

(b) No mortgage shall have a maturity exceeding three-quarters of the Commissioner's estimate of the remaining economic life of the building improvements.

(a) At the time the mortgage on a single-family dwelling is insured, a mortgagor other than a mortgagor qualifying as a displaced family shall have paid in cash or its equivalent at least 3 percent of the Commissioner's estimate of the acquisition cost of the property.

(b) At the time the mortgage on a two-, three-, or four-family dwelling is insured, a mortgagor other than a mortgagor qualifying as a displaced family shall have paid in cash or its equivalent at least the minimum amount required pursuant to the loanto-value limitations as set forth below. (1) Loan-to-value limitation-approval prior to construction. If the mortgage covers a dwelling approved for mortgage insurance prior to the beginning of construction, or if the mortgage covers a dwelling which was completed more than 1 year preceding