[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR572.105]

[Page 175]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 572_HOPE FOR HOMEOWNERSHIP OF SINGLE FAMILY HOMES PROGRAM (HOPE 3)--Table of Contents
 
   Subpart B_Homeownership Program Requirements_Implementation Grants
 
Sec. 572.105  Financing the purchase of properties by eligible families.

    (a) Types of financing. (1) Financing may include use of the 
implementation grant to permit transfer of an ownership interest in a 
unit to an eligible family for less than fair market value or with 
assisted financing; or other sources of financing (subject to 
requirements that apply to those sources), including, but not limited 
to, conventional mortgage loans, mortgage loans insured under title II 
of the National Housing Act, and mortgage loans under other available 
programs, such as Veterans Administration (VA), Farmers Home 
Administration (FmHA), and Resolution Trust Corporation (RTC) seller-
assisted financing.
    (2) FHA single family mortgage insurance requirements. All 
regulatory requirements and underwriting procedures established for FHA 
single family mortgage insurance apply to mortgages insured by FHA on 
properties assisted under the HOPE 3 program. Exceptions in the 
regulations specifically for homebuyers under the HOPE 3 program are:
    (i) The eligible family/mortgagor may obtain a loan for the down 
payment from a corporation or another person under conditions 
satisfactory to HUD (24 CFR 203.19(b) and 234.28(c));
    (ii) A second mortgage may be placed against the property even 
though the entity holding a second mortgage is not a Federal, State, or 
local government agency, if the entity is designated in the 
homeownership plan of an applicant for an implementation grant (24 CFR 
203.32(b) and 234.55(b)); and
    (iii) Certain restrictions on conveyance may be permissible. 
Property with restrictions that do not comply with FHA regulations will 
be ineligible for FHA mortgage insurance, notwithstanding HUD approval 
under Sec. 572.130(e).
    (b) Financial assistance to homebuyers. Recipients may provide 
assistance to, or on behalf of, eligible families to make acquisition 
and rehabilitation of eligible properties affordable. This may include 
interest rate reductions (``interest rate buy-downs''), payment of all 
or a portion of closing costs, down payments, mortgage insurance 
premiums, and other expenses, and other forms of assistance approved by 
HUD. No mechanisms to financially assist homebuyers that would require 
grant recipients to make lump sum deposits of HOPE 3 grant funds will be 
permitted.