[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR1005.107]



[Page 807-808]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 1005_LOAN GUARANTEES FOR INDIAN HOUSING--Table of Contents

 

Sec.  1005.107  What is eligible collateral?



    (a) In general. A loan guaranteed under section 184 may be secured 

by any collateral authorized under and not prohibited by Federal, state, 

or tribal law and determined by the lender and approved by the 

Department to be sufficient to cover the amount of the loan, and may 

include, but is not limited to, the following:

    (1) The property and/or improvements to be acquired, constructed, or 

rehabilitated, to the extent that an interest in such property is not 

subject to the restrictions against alienation applicable to trust or 

restricted land;

    (2) A first and/or second mortgage on property other than trust 

land;

    (3) Personal property; or

    (4) Cash, notes, an interest in securities, royalties, annuities, or 

any other property that is transferable and whose present value may be 

determined.

    (b) Leasehold of trust or restricted land as collateral. If a 

leasehold interest in trust or restricted land is used as collateral or 

security for the loan, the following additional provisions apply:



[[Page 808]]



    (1) Approved Lease. Any land lease for a unit financed under Section 

184 must be on a form approved by both HUD and the Bureau of Indian 

Affairs, U.S. Department of Interior.

    (2) Assumption or sale of leasehold. The lease form must contain a 

provision requiring tribal consent before any assumption of an existing 

lease, except where title to the leasehold interest is obtained by the 

Department through foreclosure of the guaranteed mortgage or a deed in 

lieu of foreclosure. A mortgagee other than the Department must obtain 

tribal consent before obtaining title through a foreclosure sale. Tribal 

consent must be obtained on any subsequent transfer from the purchaser, 

including the Department, at foreclosure sale. The lease may not be 

terminated by the lessor without HUD's approval while the mortgage is 

guaranteed or held by the Department.

    (3) The mortgagee or HUD shall only pursue liquidation after 

offering to transfer the account to an eligible tribal member, the 

Indian tribe, or the Indian housing authority servicing the Indian tribe 

or the TDHE servicing the Indian tribe. The mortgagee or HUD shall not 

sell, transfer, or otherwise dispose of or alienate the property except 

to one of these three entities.

    (4) Priority of loan obligation. Any tribal government whose courts 

have jurisdiction to hear foreclosures must enact a law providing for 

the satisfaction of a loan guaranteed or held by the Department before 

other obligations (other than tribal leasehold taxes against the 

property assessed after the property is mortgaged) are satisfied.

    (5) Eviction procedures. Before HUD will guarantee a loan secured by 

trust land, the tribe having jurisdiction over such property must notify 

the Department that it has adopted and will enforce procedures for 

eviction of defaulted mortgagors where the guaranteed loan has been 

foreclosed.

    (i) Enforcement. If the Department determines that the tribe has 

failed to enforce adequately its eviction procedures, HUD will cease 

issuing guarantees for loans for tribal members except pursuant to 

existing commitments. Adequate enforcement is demonstrated where prior 

evictions have been completed within 60 days after the date of the 

notice by HUD that foreclosure was completed.

    (ii) Review. If the Department ceases issuing guarantees in 

accordance with paragraph (b)(5)(i) of this section, HUD will notify the 

tribe of the reasons for such action and that the tribe may, within 30 

days after notification of HUD's action, file a written appeal with the 

Director, Office of Loan Guarantee (OLG), Office of Native American 

Programs (ONAP). Within 30 days after notification of an adverse 

decision by the OLG Director, the tribe may file a written request for 

review with the Deputy Assistant Secretary for ONAP. Upon notification 

of an adverse decision by the Deputy Assistant Secretary, the tribe has 

30 additional days to file an appeal with the Assistant Secretary for 

Public and Indian Housing. The determination of the Assistant Secretary 

shall be final, but the tribe may resubmit the issue to the Assistant 

Secretary for review at any subsequent time if new evidence or changed 

circumstances warrant reconsideration. (Any other administrative actions 

determined to be necessary to debar a tribe from participating in this 

program will be subject to the formal debarment procedures contained in 

24 CFR part 24.)



[61 FR 9054, Mar. 6, 1996. Redesignated and amended, respectively, at 63 

FR 12349, 12373, Mar. 12, 1998; 63 FR 48991, Sept. 11, 1998; 67 19493, 

Apr. 19, 2002]