[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: 24CFR572.115]

[Page 177]
 
                 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. 572.115  Transfer of homeownership interests.

    (a) Deadline for transfer. (1) All units in eligible properties 
(including in rem properties) must be transferred to eligible families 
within two years of the effective date of the implementation grant 
agreement, except as otherwise provided for multi-unit properties in 
paragraph (c) of this section. The transfer must involve either:
    (i) Acquisition by an eligible family of an ownership interest in a 
unit; or
    (ii) Execution of a lease-purchase agreement for a unit.
    (2) The HUD Field Office may approve a request for an extension of 
the deadline in paragraph (a)(1) of this section on a per-program or 
per-unit basis if the Field Office determines that all program 
activities will be completed in accordance with the timing requirements 
of Sec. 572.210(f) (including any extension granted under Sec. 
572.210(f)).
    (b) Form of ownership. (1) Forms of ownership interests acquired by 
eligible families under this part may include fee simple ownership 
(including condominium ownership), cooperative ownership, or another 
form of ownership interest proposed and justified by the applicant and 
approved by HUD. HUD will not approve other forms of ownership that 
would substantially limit the ability of homeowners to realize financial 
appreciation in the value of their homes as determined by HUD. The type 
of ownership interest must be consistent with any applicable State (or 
territorial), local, or tribal law.
    (2) The ownership interest may be subject only to:
    (i) The restrictions on resale required or approved under Sec. 
572.130;
    (ii) Mortgages, deeds of trust, or other liens or instruments 
securing the eligible family's purchase money financing as approved by 
the recipient; or
    (iii) Any other restrictions or encumbrances that do not impair the 
good and marketable nature of title to the ownership interest except as 
otherwise approved by the recipient. In approving the terms of an 
eligible family's purchase money financing or any other encumbrances on 
the property under paragraphs (b)(2)(ii) and (iii) of this section, the 
recipient shall not approve financing terms that do not comply with the 
affordability standards in Sec. 572.120, or mortgage terms and 
conditions or other encumbrances that in effect constitute resale 
restrictions that would not be approved by HUD under this part.
    (3) Mutual housing is eligible only to the extent it provides for 
the transfer of ownership interests to eligible families.
    (c) Transfer of multi-unit properties. (1) In the case of a two-to-
four unit property, only property that may be divided so that an 
ownership interest in each unit may be acquired by an eligible family is 
eligible. HUD may grant an exception to this requirement on a program-
by-program basis when it determines that such an exception will serve to 
further the purposes of the HOPE 3 program.
    (2) HUD Headquarters will consider and may approve an exception 
under the following circumstances:
    (i) The reasonably projected net rental income will be included in 
the determination of the appraised value of the property at the time of 
the homebuyer's purchase;
    (ii) The rent charged by the owner will not exceed the Fair Market 
Rent established by HUD for the area;
    (iii) The recipient will provide the homebuyer with counseling and 
training in property management, and will approve the form of lease used 
by the homebuyer; and
    (iv) The recipient will include the family's potential net rental 
income in calculating the family's initial affordability in accordance 
with Sec. 572.120 of this part.

[58 FR 36526, July 7, 1993, as amended at 61 FR 48797, Sept. 16, 1996]