Aug. 24, 1939, effective Sept. 1, 1939; 4 F.R. | be financed with an insured loan, the 3790] [Preceding section, in small type, superseded by following section during period covered by this Supplement] § 501.7 Eligible improvements. (a) A loan must be for the purpose of financing eligible improvements within the United States, its Territories and Possessions, commenced on or after July 1, 1939 and prior to July 1, 1941, in reliance upon the credit facilities afforded by Title I of the National Housing Act as approved June 3, 1939. (b) The proceeds of a loan shall be used only to finance alterations, repairs and improvements upon urban, suburban or rural real property (including the restoration, rehabilitation, rebuilding and replacement of such improvements which have been damaged or destroyed by earthquake, conflagration, tornado, cyclone, flood or other catastrophe). (c) The proceeds of a loan shall not be used to finance the cost of completing an unfinished structure. (d) The proceeds of a class 1 loan shall be used only to finance the cost of alterations, repairs and improvements upon or in connection with existing structures. The term "existing structure" means a completed building that has or had a distinctive functional use. (e) The proceeds of a class 2 loan shall not be used to supplement another loan or advance of credit not reported for insurance, the payment of which is secured by a prior lien created in connection with the building of such new structure. facts of the case should be submitted to the Administrator for a decision and ruling.* [As amended Dec. 14, 1939, effective Jan. 1, 1940; 4 F.R. 4985] § 501.8 Effect of prior mortgages insured or held by the Administrator. If the applicant's property to be improved, altered or repaired credit statement-application reveals that the with proceeds of a loan applied for pursuant to the terms of Title I of the National Housing Act, as amended, is already the subject of a mortgage held by the Administrator or insured by him under the provisions of Title II of the National Housing Act, the loan application shall be submitted to the Administrator for prior approval only as to credit and as to the purpose for which the proceeds of the loan applied for are to be used: Probe deemed to be binding upon the Adminisvided, however, That no such approval shall trator with respect to compliance with any other provision of the regulations in this part or the eligibility of the proposed alterations, repairs or improvements for financing under Title I of the National Housing Act, as amended.* [Regs., June 20, 1939, effective July 1, 1939, and Aug. 24, 1939, effective Sept. 1, 1939; 4 F.R. 2789, 3791] NOTE: The July 1, 1939, and the Sept. 1, 1939, revisions of this section were identical. This section was revoked Nov. 1, 1939; 4 F.R. 4498. § 501.9 Completion certificate; statements. the proceeds of a loan to one other than the (a) An insured institution may not disburse borrower or to the borrower and another jointly until it has first: (1) Obtained a completion or installation following, or a substantially similar, form: certificate signed by the borrower in the BORROWER'S COMPLETION CERTIFICATE Notice to Borrower-Do not sign this Certificate until the work is satisfactorily completed Dated at --- 19__ I (we) the undersigned hereby certify (f) The proceeds of a loan shall not that all articles and materials have been furnished and installed and the work satisbe used for the purchase of land. factorily completed on premises at in accordance with my application for a loan dated (g) The proceeds of a loan may be used to pay for architectural and engineering services performed in connection with eligible alterations, repairs or improvements financed in accordance with the regulations in this part. (h) The proceeds of a loan shall not be used for the purpose of refinancing existing obligations not previously reported for insurance pursuant to the regulations in this part. (i) Where any doubt exists as to the eligibility of a transaction which is to - pursuant to the provisions of Title I of the National Housing Act, as amended. (Signature) dated rower(s) for $... we (I) hereby certify that all articles and materials contracted for have been furnished and installed and the work fully completed, that the signature(s) on the note and Completion Certificate are genuine, that the Completion or Installation Certificate was signed after the articles and materials contracted for had been furnished and installed and the work fully completed, and we (I) guarantee that all bills will be paid both for labor and materials, and that no liens have or will be filed against the improved property in connection with this work other than those which have been or may be filed as collateral security for the payment of this note. 1 (Insured Institution please note) The wording "Notice to borrower-Do not sign this Certificate until the work is satisfactorily completed", must be in type size at least three times the size of the next largest type appearing on the form of Borrower's Completion Certificate. (2) Obtained a statement signed by the dealer, contractor or applicator in the following, or a substantially similar, form: DEALER/CONTRACTOR/APPLICATOR STATEMENT 19- To The (Signature) (b) For the purpose of this section, if there are two or more eligible borrowers involved in the transaction only one signature is required on the completion certificate or authorization form.* [Regs., June 20, 1939, effective July 1, 1939; 4 F.R. 2789] [Preceding section, in small type, superseded by following section, also in small type, during period covered by this Supplement] $ 501.9 Completion certificate; statements. (a) An insured institution may not disburse the proceeds of a class 1 or a class 2 loan to one other than the borrower or to the borrower and another jointly until it has first: (1) Obtained a completion or installation certificate signed by the borrower in the following, or a substantially similar, form: (lending institution) of. In consideration of your accepting the note of (Name of borrower (s)) for $_. dated we (I) hereby certify that all articles and materials contracted for have been furnished and installed and the work fully completed, that the signature(s) on the note and Completion Certificate are genuine, that the Completion or Installation Certificate was signed after the articles and materials contracted for had been furnished and installed and the work fully completed. (Signature) (Name) (Title) § 501.9 Completion certificate; statements. (a) An insured institution may not disburse the proceeds of a loan to one other than the borrower or to the borrower and another jointly until it has dated first: (1) Obtained a completion or installation certificate signed by the borrower in the following, or a substantially similar, form: BORROWER'S AUTHORIZATION FORM 19__ I (we) hereby authorize and direct the (financial institution) to pay of the proceeds of my (our) note for $-------- to (---- (Signature) (b) For the purpose of this section, if there are two or more eligible borrowers involved in the transaction only one signature is required on the completion certificate or authorization form.* [As amended Dec. 14, 1939, effective Jan. 1, 1940; 4 F.R. 4986] § 501.10 Refinancing. (a) New obligations to liquidate loans previously reported for insurance pursuant to Title I of the Act effective July 1, 1939 which may or may not include an additional amount advanced will be covered by insurance, Provided: (1) They meet the requirements of all applicable regulations; (2) Are reported to the Administrator on the proper form within 31 days from date of execution; (3) Have a maturity not in excess of the maximum permitted under the regulations in this part from the date of the original obligation; (4) If an additional advance is made the full unearned charge on the original note shall be refunded to the borrower; (5) If no additional advance is made, the full unearned charge on the original note shall be refunded to the borrower, except that a handling charge not in excess of $2 may be assessed to the borrower; (6) They are evidenced by notes which the insurance coverage on the loan, meet with the requirements of § 501.3 and other applicable regulations. (b) An agreement to defer payments on a note previously reported for insurance under the regulations in this part without rewriting the note will not affect the insurance coverage on the loan, Provided: (1) That such agreement is evidenced in writing; (2) That payments shall not be deferred for more than 5 months from the due date of the last fully-paid installment; (3) That such agreement shall not extend the final maturity of the obligation beyond the maturity date of the obligation as provided by its original terms; Provided: (1) That such agreement is evidenced in writing; (2) That payments shall not be deferred for more than 5 months from the due date of the last fully-paid installment; (3) That such agreement shall not extend the final maturity of the obligation beyond the maturity date of the obligation as provided by its original terms; (4) That if the lending institution assesses the borrower for the cost of such deferment, such charge may not be in excess of an equivalent amount of late charges as provided in § 501.3 (f) * [As amended Dec. 14, 1939, effective Jan. 1, 1940; 4 F.R. 4986] (4) That if the lending institution assesses the borrower for the cost of such deferment, such charge may not be in excess of an equivalent amount of late charges as provided in § 501.3 (f).* [Regs., June 20, 1939, effective July 1, 1939, and Aug. 24, 1939, effective Sept. 1, 1939; 4 F.R. 2789, 3791] NOTE: The July 1, 1939 and the Sept. 1, 1939 revisions of this section were identical. § 501.11 Report of loans. Eligible loans [Preceding section, in small type, super-shall be reported on the proper form to the seded by following section during period covered by this Supplement] § 501.10 Refinancing. (a) New obligations to liquidate loans previously reported for insurance pursuant to Title I of the Act effective July 1, 1939 which may or may not include an additional amount advanced will be covered by insurance, Provided: Federal Housing Administration, Washington, D. C., within 31 days from the date of the note, or the date upon which it was purchased, in order to be covered by the insurance. All loans refinanced shall likewise be reported within 31 days, on the proper form. In any case, the Administrator may, in his discretion, accept a late_report.* [Regs., June 20, 1939, effective July 1, 1939, and Aug. 24, 1939, effective Sept. 1, 1939; 4 FR. 2789, 3791] [Preceding section, in small type, super(1) They meet the requirements of all seded by following section, also in small type, applicable regulations; (2) Are reported to the Administrator on the proper form within 31 days from date of execution; during period covered by this Supplement] § 501.11 Report of loans. Class 1 and class 2 loans shall be reported on the proper form to the Federal Housing Administration at Washington, D. C., within 31 days from (3) Have a maturity not in excess of the date of the note or the date upon which it was purchased. Class 3 loans shall be rethe maximum permitted under the regu-ported in a like manner within 31 days of lations in this part from the date of the the first disbursement of any of the proceeds original obligation; (4) If an additional advance is made, the full unearned charge on the original note shall be refunded to the borrower; (5) If no additional advance is made, the full unearned charge on the original note shall be refunded to the borrower, except that a handling charge not in excess of $2 may be assessed to the borrower; (6) They are evidenced by notes which meet with the requirements of § 501.3 and other applicable regulations. (b) An agreement to defer payments on a note previously reported for insurance under the regulations in this part without rewriting the note will not affect of the loan. Any loan refinanced as provided in § 501.10 shall likewise be reported on the proper form within 31 days from the date of refinancing.* [As amended Sept. 15, 1939, effective Sept. 25, 1939; 4 F.R. 4063] seded by following section during period [Preceding section, in small type, supercovered by this Supplement] § 501.11 Report of loans. Loans shall be reported on the proper form to the Federal Housing Administration at Washington, D. C., within 31 days from the date of the note or date upon which it was purchased. Any loan refinanced as provided in § 501.9 shall likewise be reported on the proper form within 31 days from the date of refinancing.* [As amended Dec. 14, 1939, effective Jan. 1. 1940; 4 F.R. 4986] Claim for reim § 501.12 Claims. (a) ance, but shall elect which method it desires bursement for loss on a qualified loan shall to pursue. If claim is made, such security be made as provided in this section. (b) (1) Claim for reimbursement for loss on a qualified loan may be made to the Administrator after default on any installment, provided demand has been made upon the debtor for the full unpaid balance. (2) For the purpose of this section, any payment received on an account, including payments on a judgment predicated thereon, shall be applied to the earliest unpaid installment, and whenever any installment is 6 months in arrears claim shall be made within 31 days. (3) In the case of yearly installment notes, whenever an installment is 12 months in arrears claim must be made within 31 days thereafter. (4) Upon presentation to him of the facts of a particular case within the allowable claim period prescribed in this section, the Administrator may, in his discretion, extend the time within which claim must be made. (c) Subject to § 501.17 claim may be made only for loss sustained by the insured institution itself, and may include: (1) Net unpaid amount of advance actually made or the actual purchase price of the note, whichever is the lesser; (2) Uncollected earned interest (after default interest is not to be claimed at a rate to exceed 4 percent per annum and will be calculated to the date the claim is approved for payment); (3) Uncollected court costs, including fees paid for issuing, serving and filing summons; (4) Attorney's fees not exceeding 15 percent of the amount collected by the attorney on the defaulted note; (5) Handling fee of $5 for each loan, if Judgment is secured, plus 5 percent of amounts collected subsequent to return of unsatisfied property execution; (6) An insured institution may not waive its claim against the borrower for attorney fees and subsequently call upon the Administrator for payment of such an item. (d) Claim shall be made on a form provided by the Administrator, filled out completely and executed in duplicate by a duly qualified officer of the insured institution. If the regulations in this part have been complied with, payment of the loss will be made on audit of the claim and upon proper assignment to the United States of America, of the note upon which the loss occurred, together with any security taken to secure payment thereof. Any security or judgment taken must be assigned, and if any claim has been filed in bankruptcy, insolvency or probate proceedings, such claim shall likewise be assigned to the United States of America. device shall be assigned, in its entirety, to the United States of America. If the security taken is non-assignable, all rights in such security shall be exhausted by the insured institution or the claim against the Administrator reduced by the full face amount of the security taken before claim will be paid by the Administrator. (f) The following form of assignment properly dated shall be used in assigning a note, judgment, real estate mortgage, deed of trust, conditional sales contract, chattel mortgage or any other security device in event of claim: All right title and interest of the under signed is hereby assigned (without warranty, except that the note qualifies for insurance) to the United States of America. By Title (Financial Institution) (date) [Regs., June 20, 1939, effective July 1, 1939; 4 F.R. 2789] [Preceding section, in small type, superseded by following section, also in small type, during period covered by this Supplement] § 501.12 Claims. (a) Claim for reimbursement for loss on a qualified class 1 or class 2 loan shall be made as provided in this paragraph. (1) (1) Claim for reimbursement for loss on a qualified loan may be made to the AdProvided, Demand has been made upon the ministrator after default on any installment, debtor for the full unpaid balance. (11) For the purpose of this paragraph, any payment received on an account, including payments on a judgment predicated thereon, shall be applied to the earliest unpaid installment, and whenever any install ment is 6 months in arrears claim shall be made within 31 days. (111) In the case of yearly installment notes, whenever an installment is 12 months in arrears claim must be made within 31 days thereafter. (iv) Upon presentation to him of the facts of a particular case within the allowable claim period prescribed in this paragraph, the Administrator may, in his discretion, extend the time within which claim must be made. (2) Subject to § 501.16 claim may be made only for loss sustained by the insured institution itself, and may include: (1) Net unpaid amount of advance actually made or the actual purchase price of the note, whichever is the lesser; (11) Uncollected earned interest (after default interest is not to be claimed at a rate to exceed 4 percent per annum and will be calculated to the date the claim is approved for payment); (e) Where a real estate mortgage, deed of trust, or a conditional sales contract, chattel mortgage or any other security device has been used to secure the payment of loans for eligible purposes, the insured institution may not both proceed against such security and also make claim under its Contract of Insur-mons; (iii) Uncollected court costs, including fees paid for issuing, serving and filing sum |