retaries to issue certificates of eligibility and certificates of termination. Amended: November 6, 1967

(b) "Certificate of eligibility" means the official certificate issued by the Secretary to the Federal Housing Commissioner which established that the person designated on the certificate as the serviceman has met the eligibility requirements set forth in section 222 of the National Housing Act as amended.

(c) "Serviceman" means a person to whom the Secretary has issued a certificate of eligibility.

(d) "Period of ownership by serviceman" means that period of time during which a military service is required to pay mortgage insurance premiums to the Federal Housing Commissioner, commencing with the date the Commissioner endorses a mortgage for insurance and terminating when the Secretary furnishes the Commissioner with a certificate indicating that the military service will no longer be liable for payment of insurance premiums to the Commissioner. Amended: August 1, 1968

(1) The dwelling was approved for insurance by the Commissioner prior to the beginning of construction; or

(2) Construction was completed more than one year preceding the date of the application for insurance; or

(3) The dwelling was approved for guaranty, insurance, or direct loan by the Administrator of Veterans' Affairs prior to the beginning of construction.

(b) 90 percent of $20,000 of the appraised value of the property, as of the date the mortgage is accepted for insurance, and 85 percent of such value in excess of $20,000 if the dwelling does not meet the requirements of paragraph (a) of this section. Amended: August 10, 1965

(c) An application for mortgage insurance filed prior to November 1, 1965 need not meet the conditions set forth in subparagraphs (1), (2), and (3) of paragraph (a). Added: September 14, 1965

§ 222.5

ment.

§ 222.9

At the time the mortgage is insured the mortgagor shall have paid on account of the property at least 3 percent of the Commissioner's estimate of the cost of acquisition or such larger amount as the Commissioner may determine in cash or its equivalent.

§ 222.6

Application of payments.

(a) Notwithstanding the provisions of § 203.24 of this chapter and until such time as the mortgagee has been notified by the Commissioner that the period of ownership by serviceman has been terminated the monthly payments to be made by the mortgagor shall be applied to the following items in the order set forth:

(1) Ground rents, taxes, special assessments, and fire and other hazard insurance premiums;

(2) Service charge, if any;

(3) Interest on the mortgage; and (4) Amortization of the principal of the mortgage.

(b) After receipt of notification from the Commissioner that the period of ownership by serviceman has been ter

cipally for residential use for not more than one family. Such unit may be connected with other dwellings by a party wall or otherwise.

§ 222.50 Transfer of insurance.

The insurance of a mortgage pursuant to §§ 203.1 et seq. (Part 203, Subpart A); §§ 213.501 et seq. (Part 213, Subpart C); §§ 220.1 et seq. (Part 220, Subpart A); §§ 221.1 et seq. (Part 221, Subpart A); §§ 234.1 et seq. (Part 234, Subpart A); §§ 235.1 et seq. (Part 235, Subpart A); §§ 237.1 et seq. (Part 237, Subpart A) §§ 809.1 et seq. (Part 809, Subpart A); or §§ 810.1 et seq. (Part 810, Subpart C), all of this chapter, covering a singlefamily dwelling or a family unit in a condominium project may, with the approval of the Commissioner and upon the request by the mortgagee, be transferred for insurance under this subpart. if the mortgage indebtedness has been assumed by a serviceman who holds a certificate of eligibility issued by the Secretary and who becomes the owner of the property and either occupies the property or certifies that his failure to do so is the result of his military assignment, or, in the case of the Coast Guard, other assignment. Added: August 1, 1968; Amended: August 4, 1969

§ 222.251

Incorporation by reference.

(a) The provisions of Subpart B, Part 203 of this chapter covering mortgages insured under section 203 of the National Housing Act which refer to the mortgagee shall be construed to refer to the mortgagee or the service branch, as the case may be, in connection with mortgages insured under section 222 of the National Housing Act. In addition, all of the provisions Subpart B, Part 203 of this chapter, covering mortgages insured under section 203 of the National Housing Act apply to mortgages insured under section 222 of the National Housing Act except the following provisions: Sec.

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.

Distribution of distributive shares. Maximum amount of distributive

shares.

203.425 Finality of determination. 203.440 et seq. Insured home improvement

loans.

Amended: March 15, 1962; August 4, 1969

(b) For the purposes of this subpart, all references in Part 203 of this chapter to section 203 of the National Housing Act shall be deemed to refer to section 222 of the National Housing Act, and all references to the Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the General Insurance Fund. Amended: August 10, 1965

§ 222.252 Definition of terms.

The definitions set forth in §§ 203.251 and 222.2 of this chapter shall apply with full force and effect to this subpart and in addition the terms

(a) "Service branch" means the military service of which a mortgagor is a member at the time of the issuance of a Mortgage Insurance Certificate or the endorsement of the credit instrument by the Commissioner pursuant to section 222 of the National Housing Act. Amended: September 13, 1963

(b) "Certificate of termination" means the official notice issued by the Secretary to the Federal Housing Commissioner advising the Commissioner that the period of ownership by a serviceman has been terminated and the service branch will no longer be responsible for payment of mortgage insurance premiums. § 222.253 Annual mortgage insurance premiums and charges.

The service branch shall during the period of ownership by a serviceman have the responsibility for payment of all mortgage insurance premiums and charges. The mortgagee shall be responsible for payment of all such premiums or charges after it has been notified by the Commissioner that the period of ownership by the serviceman has been terminated.