[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR880.208]

[Page 50-51]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL
 
PART 880_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 
CONSTRUCTION--Table of Contents
 
              Subpart B_Definitions and Other Requirements
 
Sec. 880.208  Financing.

    (a) Types of financing. Any type of construction financing and long-
term financing may be used, including:
    (1) Conventional loans from commercial banks, savings banks, savings 
and loan associations, pension funds, insurance companies or other 
financial institutions;
    (2) Mortgage insurance programs under the National Housing Act;
    (3) Mortgage and loan programs of the Farmers' Home Administration 
of the Department of Agriculture compatible with the Section 8 program; 
and
    (4) Financing by tax-exempt bonds or other obligations.
    (b) HUD approval. HUD must approve the terms and conditions of the 
financing to determine consistency with these regulations and to assure 
they do not purport to pledge or give greater rights or funds to any 
party than are provided under the Agreement, Contract, and/or ACC. Where 
the project is financed with tax-exempt obligations, the terms and 
conditions will be approved in accordance with the following:
    (1) An issuer of obligations that are tax-exempt under any provision 
of Federal law or regulation, the proceeds of the sale of which are to 
be used to purchase GNMA mortgage-backed securities issued by the 
mortgagee of the Section 8 project, will be subject to 24 CFR part 811, 
subpart B.
    (2) Issuers of obligations that are tax-exempt under Section 11(b) 
of the U.S. Housing Act of 1937 will be subject to 24 CFR part 811, 
subpart A if paragraph (b)(1) of this section is not applicable.

[[Page 51]]

    (3) Issuers of obligations that are tax-exempt under any provision 
of Federal law or regulation other than section 11(b) of the U.S. 
Housing Act of 1937 will be subject to 24 CFR part 811, subpart A if 
paragraph (b)(1) of this section is not applicable, except that such 
issuers that are State Agencies qualified under 24 CFR part 883 are not 
subject to 24 CFR part 811 subpart A and are subject solely to the 
requirements of 24 CFR part 883 with regard to the approval of tax-
exempt financing.
    (c) Pledge of Contracts. An owner may pledge, or offer as security 
for any loan or obligation, an Agreement, Contract or ACC entered into 
pursuant to this part: Provided, however, That such financing is in 
connection with a project constructed pursuant to this part and approved 
by HUD. Any pledge of the Agreement, Contract, or ACC, or payments 
thereunder, will be limited to the amounts payable under the Contract or 
ACC in accordance with its terms. If the pledge or other document 
provides that all payments will be paid directly to the mortgagee or the 
trustee for bondholders, the mortgagee or trustee will make all payments 
or deposits required under the mortgage or trust indenture or HUD 
regulations and remit any excess to the owner.
    (d) Foreclosure and other transfers. In the event of foreclosure, 
assignment or sale approved by HUD in lieu of foreclosure, or other 
assignment or sale approved by HUD:
    (1) The Agreement, the Contract and the ACC, if applicable, will 
continue in effect, and
    (2) Housing assistance payments will continue in accordance with the 
terms of the Contract.
    (e) Financing of manufactured home parks. In the case of a newly 
constructed manufactured home park, the principal amount of any mortgage 
attributable to the rental spaces in the park may not exceed an amount 
per space determined in accordance with Sec. 207.33(b) of this title.

[44 FR 59410, Oct. 15, 1979, as amended at 45 FR 62797, Sept. 22, 1980; 
48 FR 12704, Mar. 28, 1983; 49 FR 17449, Apr. 24, 1984]