30 days advance notice of its intention to prepay. (2) If the loan exceeds $200,000, the security instrument may contain a provision for an additional charge in the event of prepayment of principal as may be agreed upon between the borrower and lender. These charges shall not be imposed if the loan is accelerated at the request of the Commissioner, pursuant to §241.1046(b). The borrower shall be permitted to prepay up to 15 percent of the original principal amount of the loan in any one calendar year without any additional charge. A provision for an additional charge in the event of prepayment may not be included in a loan of $200,000 or less. (b) Prepayment of bond-financed loan. Where the lender has obtained the funds for the loan by the issuance and sale of bonds or bond anticipation notes, or both, the loan may contain a prepayment restriction and prepayment penalty charges acceptable to the Commissioner as to term, amount, and conditions. § 241.1105 Late charges. The note and security instrument may provide for the lender's collection of a late charge, not to exceed 2 cents for each dollar of each payment to interest or principal more than 15 days in arrears, to cover the expense involved in handling delinquent payments. Late charges shall be separately charged to and collected from the borrower and shall not be deducted from any aggregate monthly payment. § 241.1120 Mortgagee's consent. The holder of an insured mortgage which is recorded prior to the equity or acquisition loan shall not withhold its consent to the equity or acquisition loan (whether or not such equity or acquisition loan is insured by the Commissioner) or the security instrument executed in connection therewith, and may not charge a fee as a condition to its consent to such loan or security instrument. Subpart F-Insurance for Equity SOURCE: 57 FR 12040, Apr. 8, 1992, unless otherwise noted. § 241.1200 Cross-references. (a) Projects with a HUD-insured or HUD-held mortgage. (1) All the provisions of part 207, subpart B of this chapter, covering mortgages insured under section 207 of the Act, apply to equity loans or acquisition loans on a project insured under section 241(f) of the Act, except the following provisions: Sec. 207.251 Definitions. 207.252 First, second and third premium. 207.252a Premiums-operating loss loans. 207.252b Premiums-mortgages insured pursuant to section 223(f) of the Act. 207.252c Premiums-mortgages insured pursuant to section 238(c) of the Act. 207.254 Insurance endorsement. (2) For the purposes of subpart F of this part, all references in part 207 of this chapter to section 207 of the Act and to the term "mortgage" shall be construed to refer to section 241(f) of the Act and "equity or acquisition loan," respectively. (b) Projects without a HUD-insured or HUD-held mortgage. The provisions of subpart D of this part shall be applicable to a project without a HUD-insured or HUD-held mortgage that is receiving an equity loan or acquisition loan under subpart E of this part in connection with a plan of action approved by the Commissioner under part 248 of this chapter. (c) All of the definitions in §241.1005 apply to subpart F of this part. In addition, as used in subpart F of this part, the term "contract of insurance” means the agreement evidenced by the Commissioner's insurance endorsement and includes the provisions of subpart F of this part and of the Act. § 241.1205 Payment of insurance benefits. All the provisions of § 207.259 of this chapter relating to insurance benefits shall apply to an equity or acquisition loan insured under subpart F of this part, except that insurance benefits shall be payable in cash if the insurance benefits under the senior insured mortgage are payable in cash, unless the lender files a written request for payment in debentures. If such a request is made, payment shall be made in debentures with a cash payment to adjust for any difference between the total amount of the insurance payment and the amount of the debentures issued. § 241.1210 Condition for payment of insurance benefits. (a) All of the provisions of §207.258 of this chapter apply to subpart F of this part, except that, if the holder of the senior insured mortgage institutes a foreclosure action, the lender shall notify the Commissioner in a timely manner of such action. The Commissioner, at its option, may then direct the lender to assign the equity or acquisition loan to the Commissioner, or bid an amount necessary to acquire the project and convey the project to the Commissioner. (b) If the equity loan or acquisition loan is assigned in accordance with this section, the Commissioner at a foreclosure sale may bid, in addition to amounts otherwise otherwise authorized, any sum not in excess of the aggregate unpaid indebtedness secured by the senior insured mortgage and equity or acquisition loan, plus taxes, insurance, foreclosure costs, fees and other expenses. § 241.1215 Calculation of insurance benefits. All of the provisions of $207.259 of this chapter apply to subpart F of this part, except that if the lender, at the direction of the Commissioner, acquires title to the project at a foreclosure sale instituted by the holder of the senior insured mortgage, the amount of the claim determined under § 207.259(c) of this chapter shall also include an amount bid by the lender to satisfy the senior insured mortgage at the foreclosure sale. All of the provisions of §207.253a of this chapter apply to subpart F of this part, except that the following shall also constitute grounds for terminating the contract of insurance: (a) The failure of the lender to notify the Commissioner in a timely manner of a foreclosure action initiated by the holder of the senior insured mortgage; and (b) The failure of the lender when directed by the Commissioner to assign the equity or acquisition loan or bid an amount necessary to acquire title to the project and convey the project to the Commissioner, in accordance with § 241.1210. § 241.1230 No vested right in fund. Neither the lender nor the borrower shall have any vested or other right in the insurance fund under which the loan is insured. $241.1235 Cross default. In the event the borrower commits a default under a prior recorded insured mortgage and the holder thereof initiates a foreclosure proceeding, said default under the prior recorded insured mortgage shall constitute a default under the equity or acquisition loan. § 241.1245 Insurance endorsement. (a) Endorsement. The Commissioner shall indicate his insurance of the equity loan or acquisition loan by endorsing the original credit instrument and identifying the section of the Act and the regulations under which the loan is insured and the date of insurance. (b) Endorsement of phased loan. In the event the loan is phased, the Commissioner shall indicate his insurance of each amount by endorsing the original credit instrument and identifying the section of the Act and the regulations under which such amount is insured and the date of the insurance. (c) Final advance of phased loan. When all advances of a phased loan have been made and the terms and conditions of the commitment have been complied located, and the appropriate agency for such jurisdiction provides a license, certificate or other assurances the Commissioner considers necessary, that the facility complies with any applicable State or local standards and requirements for such facility. § 242.3 Eligible hospital. The hospital to be financed with a mortgage insured under this part shall involve one of the following: the construction and equipping of a new hospital, rehabilitation of a hospital, the addition of new facilities or equipment, or the rehabilitation or replacement of a portion of an existing hospital structure. Subpart B-Contract Rights and Obligations § 244.251 Cross-reference. (a) All of the provisions, except § 207.258b, of part 207, subpart B of this chapter relating to mortgages insured under section 207 of the National Housing Act apply to a mortgage covering a group practice facility insured under title XI of the National Housing Act. (b) For the purposes of this subpart all references in part 207 of this chapter to section 207 of the Act shall be construed to refer to title XI of the Act. (c) All of the definitions in §244.1 shall apply to this subpart. In addition as used in this part, the term contract of insurance means the agreement evidenced by the Commissioner's insurance endorsement and includes the provisions of this subpart and of the Act. [36 FR 24663, Dec. 22, 1971, as amended at 50 FR 38787, Sept. 25, 1985] Subpart E-Procedures for Requesting Approval of a Covered Action 245.405 Applicability of subpart. 245.410 Notice to tenants. 245.415 Submission of materials to HUD: Timing of submission. 245.416 Initial submission of materials to HUD: Conversion from project-paid utilities to tenant-paid utilities or a reduction in tenant utility allowances. 245.417 Initial submission of materials to HUD: Conversion of residential units to a nonresidential use, or to cooperative housing or condominiums. 245.418 Initial submission of materials to HUD: Partial release of mortgage security. 245.419 Initial submission of materials to HUD: Major capital additions. 245.420 Rights of tenants to participate. 245.425 Submission of request for approval to HUD. 245.430 Decision on request for approval. 245.435 Non-insured projects: Conversion from project-paid utilities to tenant-paid utilities or a reduction in tenant utility allowances. AUTHORITY: 12 U.S.C. 1715z-1b; 42 U.S.C. 3535(d). Subpart A-General Provisions § 245.5 Purpose. The purpose of this part is to recognize the importance and benefits of cooperation and participation of tenants in creating a suitable living environment in multifamily housing projects and in contributing to the successful operation of such projects, including their good physical condition, proper maintenance, security, energy efficiency, and control of operating costs. [50 FR 32402, Aug. 12, 1985] § 245.10 Applicability of part. (a) Except as otherwise expressly limited in this section, this part applies in its entirety to a mortgagor of any multifamily housing project that meets the following (1) Project subject to HUD insured or held mortgage under the National Housing Act. The project has a mortgage that (i) Has received final endorsement on behalf of the Secretary and is insured or held by the Secretary under the National Housing Act (12 U.S.C. 1701— 1715z-20); and (ii) Is assisted under: (A) Section 236 of the National Housing Act (12 U.S.C. 1715z−1); (B) The Section 221(d)(3) BMIR Program; (C) The Rent Supplement Program; (D) The Section 8 Loan Management Set-Aside Program following conversion to such assistance from the Rent Supplement Program assistance; (2) Section 202 project. The project has a direct mortgage loan from HUD at a below-market interest rate under the Section 202 Loans for the Elderly or Handicapped BMIR Program. This part applies in its entirety to the mortgagor if the project is assisted under the Rent Supplement Program or under the Section 8 LMSA Program following conversion to such assistance from Rent Supplement Program assistance. If the project is not so assisted, only subparts A, D, and E of this part apply to the mortgagor; (3) Formerly HUD-owned project. The project— (i) Before being acquired by the Secretary, was assisted under: (A) Section 236 of the National Housing Act (12 U.S.C. 1715z-1); (B) The Section 221(d)(3) BMIR Program; or (C) The Rent Supplement Program; (D) The Section 8 LMSA Program following conversion to such assistance from assistance under the Rent Supplement Program; and (ii) Was sold by the Secretary subject to a mortgage insured or held by the Secretary and an agreement to maintain the low- and moderate-income character of the project; or (4) State or local housing finance agency project. The project receives assistance under section 236 of the National Housing Act (12 U.S.C. 1715z-1) or the Rent Supplement Program administered through a State or local housing finance agency, but does not have a mortgage insured under the National Housing Act or held by the Secretary. Subject to the further limitation in paragraph (b) of this section, only the provisions of subparts A and C of this part and of subpart D of this part for requests for approval of a conversion of a project from project-paid utilities to tenant-paid utilities or of a reduction |