(1) A Certificate of Veteran Status from the Veterans Administration establishing that he has served 90 days or more on active duty in the armed forces (U.S. Army, Navy, Marine Corps, Air Force, Coast Guard, the Army Reserve, the Naval Reserve, the Marine Corps Reserve, the Air Force Reserve, the Coast Guard Reserve, the National Guard of the United States, and the Air National Guard of the United States) of the United States and was discharged or released therefrom under conditions other than dishonorable. (2) A certificate issued by the Secretary of Defense establishing that the mortgagor performed extra hazardous service while serving in the armed forces for a period of less than 90 days. § 226.6 Mortgage obligation in multiples. The mortgage shall involve a principal obligation in an amount of $100 or multiples thereof (except that a mortgage having a principal obligation not in excess of $15,000 and an amortization period of either 20, 25 or 30 years, may be in an amount of $50 or multiples thereof). § 226.7 Mortgagor's minimum invest ment. At the time the mortgage is insured, the mortgagor shall have paid in cash or its equivalent the following minimum amount. (a) In all cases (except those involving a veteran meeting the requirements of § 226.5(b)), the minimum investment shall be at least 3 percent of the Commissioner's estimate of the cost of acquisition or such larger amount, as the Commissioner may determine. (b) In a case involving a veteran meeting the requirements of § 226.5(b), the minimum investment shall be $200 which may include settlement costs, initial payments for taxes, hazard insurance premiums, mortgage insurance premiums, and other prepaid expenses as approved by the Commissioner. § 226.8 Eligible mortgagors. No mortgage shall be insured unless executed by a mortgagor who meets the employment status requirements as set forth in § 226.3 and who at the time of insurance is the owner of the property and either occupies the property or certifies that his failure to do so is the result of a change of his employment. 227.751 Incorporation by reference-Individual Mortgages. AUTHORITY: The provisions of this Part 227 issued under secs. 807, 810, 69 Stat. 651, 73 Stat. 683; 12 U.S.C. 17481, 1748h-2. SOURCE: The provisions of this Part 227 appear at 36 F.R. 24611, Dec. 22, 1971, unless otherwise noted. Subpart A-Eligibility Require- § 227.1 Incorporation by reference. (a) General. All of the provisions of §§ 203.1 to 203.4 and 203.6 to 203.9 of this chapter shall govern the eligibility qualifications and requirements of mortgages under this subpart. (b) Multifamily, sales or rental projects. (1) All of the provisions of Sub urban areas. Eligibility of refinanced mortgages. Eligibility of mortgages on trailer courts or parks for trailer coach mobile dwellings. 207.34 Reinsurance of Commissioner-held mortgages. (2) For the purposes of this subpart all references in Part 207 of this chapter to section 207 of the National Housing Act shall be construed to refer to section 810 of such Act. § 227.5 Definitions of terms as used in this subpart. As used in this subpart, the following terms will have the meaning indicated: (a) "Act" means the National Housing Act, as amended. (b) "Commissioner" means the Federal Housing Commissioner or his authorized representatives. (c) [Reserved] (d) "Mortgage" means a first mortgage on real estate, in fee simple, or on a leasehold (1) under a lease for not less than 99 years which is renewable; or (2) under a lease having a period of not less than 75 years to run from the date the mortgage is executed; or (3) under a lease executed by a governmental agency for the maximum term consistent with its legal authority, provided such lease has a period of not less than 50 years to run from the date the mortgage is executed; and the term "first mortgage" means such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instruments, if any, cured thereby. se (e) "Insured mortgage" means mortgage which has been insured by the endorsement of the credit instrument by the Commissioner. (f) "Mortgagor" means any individual or private entity approved by the Commissioner, which until the termination of all obligations of the Commissioner under the insurance contract and during such further period of time as the Commissioner shall be the owner, holder, or reinsurer of the mortgage, is regulated or restricted by the Commissioner as to rents or sales, charges, capital structure, rate of return, and methods of operation. (g) "Mortgagee" means the original lender under a mortgage, its successors and such of its assigns as are approved by the Commissioner, and includes the holders of the credit instruments issued under a trust mortgage or deed of trust pursuant to which such holders act by and through a trustee herein named. (h) "Multifamily Sales Project" means a project constructed under a blanket mortgage, covering a group of not less than eight single-family dwellings constructed for eventual sale to individual purchasers. (1) "Multifamily Rental Project" means a project constructed for the purpose of providing rental housing accommodations for eligible tenants. (j) "Maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with periodic payments provided for in the mortgage. § 227.10 Preference in sale or rental. Priority in the sale or rental of dwellings covered by a mortgage insured under this subpart shall be given to the following classes of persons: (a) Military personnel; (b) Essential civilian employees of the Armed Services; (c) Employees of contractors for the Armed Services. (d) Essential personnel employed or assigned to duty at a research or development installation of the National Aeronautics and Space Administration or the Atomic Energy Commission or employees of a contractor of such Administration or Commission who are employed at a research or development installation. In the event the mortgage is on a leasehold estate rather than on a fee simple holding, the value or replacement cost of the property on which the mortgage is based is the value or replacement cost of the property in fee simple reduced by an amount equal to the capitalized value of the ground rent. The mortgage amount shall be adjusted to the next lowest mortgage amount as stipulated in § 227.751 for individual mortgages. § 227.25 Eligible mortgages-form. (a) Form. The mortgage must 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 must be a first lien upon property that conforms with property standards prescribed by the Commissioner. (b) Disbursement of mortgage proceeds. The entire principal amount of the mortgage must have been disbursed to the mortgagor or to his creditors for his account and with his consent. § 227.27 Prepayment privilege; prepay. ment and late charge. All of the provisions of § 207.14 of this chapter relating to prepayment and late charge shall apply to mortgages insured under this part, except that no prepayment charge shall be made for prepayments which result from releases of individual properties from a blanket mortgage covering a Multifamily Sales Project. § 227.30 Eligible mortgagors. In order to be eligible for mortgage insurance under this subpart, the mortgage shall be executed by a mortgagor approved by the Commissioner. § 227.35 Maximum mortgage amounts—Multifamily Rental Proj ect. A mortgage on a Multifamily Rental Project may involve a principal obligation not in excess of the lesser of the following: (a) $5,000,000; (b) 90 percent of the estimated value; (a) $5,000,000. (b) A sum computed on the basis of a separate mortgage for each single-family dwelling comprising the project, equal to the total of each of the maximum principal obligations of such mortgages which would meet the requirements of section 203(b) (2) of the Act if the mortgagor were the owner and occupant who had made any required payment on account of the property described in such section of the Act; provided that special escrow arrangements, satisfactory to the Commissioner, are made by the mortgagor with respect to mortgage proceeds in excess of 90 percent of the estimated value. § 227.35(c). (b) If the Commissioner finds that because of high costs in Alaska, Guam, or Hawaii it is not feasible to construct dwellings without the sacrifice of sound standards of construction, design, and livability within the limitations of maximum mortgage amounts provided in this section, the principal obligation of mortgages may be increased in such amounts as may be necessary to compensate for such costs, but not to exceed, in any event, the maximum including high cost area increases, if any, otherwise applicable by more than one-half thereof. § 227.47 Loans to cover 2-year operating loss. (a) Operating loss determination. When the Commissioner determines that an operating loss has occurred during the first 2 years following completion of the project, he may, in his discretion, accept for insurance under this part, a loan to cover such loss. For the purposes of this section, an operating loss shall occur when the Commissioner determines that the total of the taxes, interest on the mortgage debt, mortgage insurance premiums, hazard insurance premiums, and the expense of maintenance and operation of the project (excluding depreciation) exceeds the project income. (b) Security instrument. The loan shall be secured by an instrument in a form approved by the Commissioner for use in the jurisdiction in which the project is located. (c) Maximum interest rate. The loan may bear interest at such rate as may be agreed upon by the mortgagee and mortgagor, but in no case shall such rate exceed the rate in effect under § 207.7 of this chapter on the date the commitment is issued. Interest shall be payable in monthly installments on the principal then outstanding. (d) Maturity. The loan shall be limited to a term not exceeding the unexpired term of the original mortgage. § 227.50 Mortgage release provisions. A mortgage executed by a mortgagor of a Multifamily Sales Project shall provide that at any time after five years from the date the project became available for initial occupancy or at such earlier date as the Commissioner may authorize, the property underlying such mortgage may be released, in whole or in part, upon payment of the unpaid balance of the blanket mortgage allocable to the property released. Where the mortgage does not contain release provisions, no property shall, except with the consent of the Commissioner, be released from the lien thereof so long as the mortgage insurance is in force. § 227.55 Cost certification. All of the provisions of §§ 207.25 through 207.30 of this chapter shall be applicable to a Multifamily Rental Project, but such provisions shall not be applicable to a Multifamily Sales Project. Subpart B-Contract Rights and § 227.251 Incorporation by reference- gages insured under section 207 of the National Housing Act apply to Multifamily, Sales, or Rental Project mortgages insured under section 810 of the National Housing Act. (b) For the purposes of this part, all references in Part 207 of this chapter to section 207 of the act shall be construed to refer to section 810 of the act. (Sec. 7(d), 79 Stat. 670; 42 U.S.C. 3533 (d)) [36 F.R. 24611, Dec. 22, 1971, as amended at 37 FR. 8663, Apr. 29, 1972] Subpart C-Eligibility RequirementsIndividual Mortgages § 227.501 Incorporation by reference. (a) General. All of the provisions of §§ 203.1 to 203.4 and 203.6 to 203.9 of this chapter shall govern the eligibility qualifications and requirements of mortgages under this subpart. (b) Individual Mortgages. (1) All of the provisions of Subpart A, Part 203 of this chapter covering mortgages insured under section 203 of the National Housing Act apply to Individual Mortgages insured under this subpart except the following provisions: than 99 years which is renewable; or (2) under a lease having a period of not less than 75 years to run from the date the mortgage is executed; or (3) under a lease executed by a governmental agency for the maximum term consistent with its legal authority, provided such lease has a period of not less than 50 years to run from the date the mortgage is executed; and the term "first mortgage" means such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby. (e) "Insured mortgage" means a mortgage which has been insured by the issuance of a Mortgage Insurance Certificate or by the endorsement of the credit instrument by the Commissioner. (f) "Mortgagor" in the case of an Individual Mortgage means the original borrower under a mortgage and its successors and such of its assigns as are approved by the Commissioner. (g) "Mortgagee" means the original lender under a mortgage, its successors and such of its assigns as are approved by the Commissioner, and includes the holders of the credit instruments issued under a trust mortgage or deed of trust pursuant to which such holders act by and through a trustee herein named. (h) "Individual Mortgage" means & mortgage covering an individual singlefamily dwelling which has been released from a Multifamily Sales Project mortgage. (1) "Maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with periodic payments provided for in the mortgage. § 227.510 Preference in sale or rental. Priority in the sale or rental of dwellings covered by a mortgage insured under this subpart shall be given to the following classes of persons: (a) Military personnel; (b) Essential civilian employees of the Armed Services; (c) Employees of contractors for the Armed Services. (d) Essential personnel employed or assigned to duty at a research or development installation of the National Aeronautics and Space Administration or the Atomic Energy Commission or |