(2) Appropriate advisory services, including reasonable advance written notice of:

(i) The date and approximate duration of the temporary relocation;

(ii) The location of the suitable, decent, safe, and sanitary dwelling to be made available for the temporary period;

(iii) The terms and conditions under which the tenant may lease and occupy a suitable, decent, safe, and sanitary dwelling in the building/complex following completion of the rehabilitation; and

(iv) The provisions of paragraph (b)(1) of this section.

(c) Relocation assistance for displaced persons. A "displaced person" (defined in paragraph (g) of this section) must be provided relocation assistance at the levels described in, and in accordance with the requirements of, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA) (42 U.S.C. 42014655) and implementing regulations at 49 CFR part 24. A "displaced person" shall be advised of his or her rights under the Fair Housing Act (42 U.S.C. 3601-19), and, if the representative comparable replacement dwelling used to establish the amount of the replacement housing payment to be provided to a minority person is located in an area of minority concentration, such person also shall be given, if possible, referrals to comparable and suitable, decent, safe and sanitary replacement dwellings not located in such areas.

(d) Real property acquisition requirements. The acquisition of real property for a project is subject to the URA and the requirements described in 49 CFR part 24, subpart B.

(e) Appeals. A person who disagrees with the Owner's determination concerning whether the person qualifies as a "displaced person," or with the amount of relocation assistance for which the person is eligible, may file a written appeal of that determination with the Owner. A person who is dissatisfied with the Owner's determination on his or her appeal may submit a written request for review of that determination to the HUD Field Office.

(f) Responsibility of Owner. (1) The Owner shall certify (i.e., provide assur

ance of compliance as required by 49 CFR part 24) that the Owner will comply with the URA, the regulations at 49 CFR part 24, and the requirements of this section. The Owner shall ensure such compliance notwithstanding any third party's contractual obligation to the Owner to comply with these provisions.

(2) The cost of required relocation assistance is an eligible project cost in the same manner and to the same extent as other project costs. Such costs also may be paid with funds available from other sources.

(3) The Owner shall maintain records in sufficient detail to demonstrate compliance with these provisions. The Owner shall maintain data on the race, ethnic, gender, and disability status of displaced persons.

(g) Definition of displaced person. (1) For purposes of this section, the term displaced person means a person (household, business, nonprofit organization, or farm) that moves from real property, or moves personal property from real property, permanently, as a direct result of acquisition, rehabilitation, or demolition for a project assisted under this part. The term "displaced person" includes, but may not be limited to:

(i) A tenant-occupant of a dwelling unit who moves from the building/complex, permanently, after the Owner executes the agreement covering the rehabilitation, demolition or acquisition, if the move occurs before the tenant is provided written notice offering him or her the opportunity to lease and occupy a suitable, decent, safe, and sanitary dwelling in the same building/ complex, under reasonable terms and conditions, upon completion of the project. Such reasonable terms and conditions include a monthly rent and estimated average monthly utility costs that do not exceed the amount approved by HUD;

(ii) A tenant-occupant of a dwelling who is required to relocate temporarily, but does not return to the building/complex, if either:

(A) The tenant is not offered payment for all reasonable out-of-pocket expenses incurred in connection with the temporary relocation, including the cost of moving to and from the temporarily occupied unit, any in

creased housing costs and incidental expenses; or

(B) Other conditions of the temporary relocation are not reasonable;

or

(iii) A tenant-occupant of a dwelling who moves from the building/complex, permanently, after he or she has been required to move to another dwelling unit in the same building/complex in order to carry out the project, if either:

(A) The tenant is not offered reimbursement for all reasonable out-ofpocket expenses incurred in connection with the move; or

(B) Other conditions of the move are not reasonable; or

(iv) Any person, including a person who moves before the Owner's execution of the agreement covering the rehabilitation, demolition, or acquisition, if the Owner or HUD determines that the displacement resulted directly from rehabilitation, demolition or acquisition for the assisted project.

(2) Notwithstanding the provisions of paragraph (g)(1) of this section, a person does not qualify as a "displaced person" (and is not eligible for relocation assistance under the URA or this section), if:

(i) The person has been evicted for serious or repeated violation of the terms and conditions of the lease or occupancy agreement, violation of applicable Federal, State or local law, or other good cause, and HUD determines that the eviction was not undertaken for the purpose of evading the obligation to provide relocation assistance;

(ii) The person moved into the property after the execution of the agreement covering the rehabilitation, demolition or acquisition and, before signing a lease and commencing occupancy, received written notice of the project, its possible impact on the person (e.g., the person may be displaced, temporarily relocated or suffer a rent increase) and the fact that he or she would not qualify as a "displaced person" (or for any assistance provided under this section) as a result of the project;

(iii) The person is ineligible under 49 CFR 24.2(g)(2); or

(iv) HUD determines that the person was not displaced as a direct result of

acquisition, rehabilitation, or demolition for the project.

(3) The Owner may ask HUD, at any time, to determine whether a displacement is or would be covered by this section.

(h) Definition of initiation of negotiations. For purposes of determining the formula for computing the replacement housing assistance to be provided to a residential tenant displaced as a direct result of privately undertaken rehabilitation, demolition, or acquisition of the real property, the term initiation of negotiations means the Owner's execution of the agreement covering the rehabilitation, demolition, or acquisi

SPECIAL PROVISIONS APPLICABLE ONLY TO MORTGAGES INVOLVING CONDOMINIUM UNITS

222.265 Changes in the plan of apartment ownership.

222.270 Condition of the multifamily structure.

222.275 Assessment of taxes.

222.280 Certificate of tax assessment.

222.285 Certificate or statement of condition.

222.290 Cancellation of hazard insurance.

Subpart C-Servicing Responsibilities 222.400 Cross-reference.

AUTHORITY: Secs. 211, 222, National Housing Act (12 U.S.C. 1715b, 1715m); sec 7(d), Department of Housing and Urban Development Act (42 U.S.C. 3535(d)).

SOURCE: 36 FR 24605, Dec. 22, 1971, unless otherwise noted.

203.431 Eligibility of mortgages on Hawaiian home lands insured pursuant to section 247 of the National Housing Act. 203.43j Eligibility of mortgages on Allegany Reservation of Seneca Nation of Indians. 203.50 Eligibility of rehabilitation loans. 203.51 Applicability.

(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.

[36 FR 24605, Dec. 22, 1971, as amended at 44 FR 46836, Aug. 9, 1979; 45 FR 76389, Nov. 18, 1980; 47 FR 16779, Apr. 20, 1982; 51 FR 21874, June 16, 1986; 52 FR 8069, Mar. 16, 1987; 52 FR 28470, July 30, 1987; 52 FR 48204, Dec. 21, 1987; 53 FR 9869, Mar. 28, 1988; 55 FR 34811, Aug. 24, 1990]

§222.2 Definition of terms.

As used in this subpart the terms(a) Secretary shall mean the Secretary of Defense, or, in the case of the U.S. Coast Guard, the Secretary of Transportation, or, in the case of the U.S. National Oceanic and Atmospheric Administration, the Secretary of Commerce. Secretary shall also mean any officer or employee designated by the above-named Secretaries to issue certificates of eligibility and certificates of termination.

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

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

(d) Period of ownership by serviceperson means that period of time during which the Secretary 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 Secretary will no longer be liable for payment of the insurance premiums to the Commissioner.

[36 FR 24605, Dec. 22, 1971, as amended at 37 FR 76, Jan. 5, 1972; 55 FR 34811, Aug. 24, 1990]

§222.3 Maximum mortgage amountsdollar limitation.

The mortgage shall involve a principal obligation not in excess of the dollar limitation for a 1-family residence set forth in §203.18(a)(1) of this chapter, or for a 1-family unit in a condominium project set forth in §23427 of this chapter, except that a mortgage meeting the requirements of §§ 203.18(d), 221.10 or § 221.11 of this chapter shall not exceed the dollar limitation provided in the applicable section. [58 FR 41005, July 30, 1993]

§222.4 Maximum mortgage amount; ratio of loan-to-value limitation. The mortgage shall not exceed the lesser of the following:

(a) 97 percent of the first $25,000 of the appraised value of the property, as of the date the mortgage is accepted for insurance, and 95 percent of such value in excess of $25,000 if the mortgage covers a dwelling which:

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

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

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

(4) Is covered by a consumer protection or warranty plan acceptable to the Secretary and satisfies all requirements that would have been applicable if such dwelling had been approved for mortgage insurance before the beginning of construction. After August 6, 1991, any consumer protection or warranty plan must meet the requirements of §§ 203.200-203.209 of this chapter.

(b) 90 percent of the entire appraised value of the property, as of the date the mortgage is accepted for insurance, if the dwelling does not meet the requirements of paragraph (a) of this section.

(c) Notwithstanding any other provision of this section, a mortgage may not involve a principal obligation in excess of 98.75 percent of the appraised value of the property (97.75 percent, in the case of a mortgage with an appraised value in excess of $50,000), plus

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 the Commissioner has notified the mortgagee that the period of ownership by a serviceperson has been terminated, the mortgagor's monthly payments must be applied to the following items in the order set forth:

(1) Ground rents, taxes, special a sessments, flood insurance premiums, if required, and fire and other hazard insurance premiums:

(2) Service charge, if any;

(3) Interest on the mortgage;

(4) Amortization of the principal of the mortgage; and

(5) Late charges, if permitted under the terms of the mortgage and subject to such conditions as the Commissioner may prescribe.

(b) After the mortgagee receives notification from the Commissioner that the period of ownership by a serviceperson has been terminated, the mortgagee must apply all monthly payments received from the mortgagor in the order set forth in §203.24 of this chapter.

[36 FR 24605, Dec. 22, 1971, as amended at 37 FR 25231, Nov. 29, 1972; 50 FR 25915, June 24, 1985; 55 FR 34811, Aug. 24, 1990]

§ 222.7 Use of mortgage proceeds.

The proceeds of mortgages must be used for the purpose of financing the construction or purchase of an eligible dwelling by a serviceperson.

[55 FR 34811, Aug. 24, 1990]

$222.8 Eligible mortgagors.

To be eligible for mortgage insurance under this part, the mortgagor must: (a) Meet the requirements of §§ 203.32 through 203.36 of this chapter;

(b) Hold a certificate of eligibility issued by the Secretary, indicating that the mortgagor meets the eligibility requirements of section 222 of the National Housing Act; and

(c) Occupy the dwelling as a principal residence (as defined in §203.18(f)(1) of this chapter) or certify that his or her failure to do so is a result of his or her military assignment, or, in the case of the Coast Guard or U.S. National Oceanic and Atmospheric Administration, other assignment.

[55 FR 34811, Aug. 24, 1990]

$222.9 Eligible types of dwellings.

The mortgage shall involve one of the following types of dwellings: (a) A single family dwelling.

(b) A one-family unit in a condominium project, together with an individual interest in the common areas and facilities serving the project.

$222.10 Requirements for family unit in condominium.

Where the dwelling involved is a onefamily unit in a condominium project, the following additional requirements shall be met:

(a) Plan of apartment ownership. The project in which the family unit is located shall have been committed to a plan of apartment ownership by enabling deed, deed of constitution, public deed, or other recorded instrument which has been approved by the Commissioner and which is certified by the mortgagee as acceptable and binding within the jurisdiction where the project is located.

(b) Certificate by mortgagee. The mortgagee shall certify as to each of the following:

(1) That the individual deed for the family unit to be covered by an FHAinsured mortgage complies with all legal requirements of the jurisdiction and that ownership thereunder is subject to the plan of apartment ownership.

(2) That the mortgagor has good and marketable title to the family unit

subject only to the mortgage which is a valid first lien on the property.

(3) That the family unit is assessed and subject to assessment for taxes pertaining to the unit.

(c) FHA controls for consumer and public interest. The Commissioner may require the execution of a regulatory agreement which shall be made applicable to any association of owners and to any subsequent owner of a family unit. The Commissioner may impose such additional conditions and provisions as he deems necessary for the protection of the consumer and public interest.

(d) Mortgage covenant concerning common expenses and assessments. The mortgage shall contain a covenant by the mortgagor to pay the allocated share of the common expenses or assessments and charges by the Association of Owners as provided in the Plan of Apartment Ownership.

(e) Definition of term assessment. As used in the mortgage, the term assessment, except where it refers to assessments and charges by the Association of Owners, shall mean special assessments by State or local governmental agencies, districts or other public taxing or assessing bodies.

[36 FR 24605, Dec. 22, 1971, as amended at 53 FR 34283, Sept. 6, 1988]

§ 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); §§ 226.1 et seq. (part 226, subpart A); §§ 227.1 et seq. (part 227, 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); all of this chapter, covering a single family dwelling or a family unit in a condominium project, may, with the approval of the Commissioner and upon the request of the mortgagee, be transferred for insurance under this subpart, if the mortgage indebtedness has been assumed by a serviceperson who (a) holds a certificate of eligibility issued by the Commissioner, (b) becomes the owner of the property, and (c) either occupies the property as a principal residence (as defined in 24 CFR