[Code of Federal Regulations]

[Title 24, Volume 2]

[Revised as of April 1, 2005]

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

[CITE: 24CFR203.19]



[Page 157-158]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

 CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING 

        COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 203_SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents

 

     Subpart A_Eligibility Requirements and Underwriting Procedures

 

Sec.  203.19  Mortgagor's minimum investment.



    (a) At the time the mortgage is insured, the mortgagor shall have 

paid in cash or its equivalent the following minimum amount:

    (1) In all cases (except those involving a veteran meeting the 

requirements of Sec.  203.18(b) or a disaster victim meeting the 

requirements of Sec.  203.18(e)), the minimum investment shall be at 

least 3 percent of the Commissioner's estimate of the cost of 

acquisition (excluding the amount of any one-time mortgage insurance 

premium payable in accordance with Sec.  203.280) or such other larger 

amount as the Commissioner may determine.

    (2) In a case involving a veteran meeting the requirements of Sec.  

203.18(a)(3) or a disaster victim meeting the requirements of Sec.  

203.18(e), the minimum investment shall be $200 which may include 

settlement costs, initial payments for taxes, hazard insurance premiums, 

mortgage insurance premiums, and other prepaid expenses as approved by 

the Commissioner.

    (b) A mortgagor who is 60 years of age or older, as of the date the 

mortgage is accepted for insurance, or whose mortgage meets the 

requirements of and is to be insured pursuant to Sec.  203.18(d), or who 

is purchasing a single-family home under a low income housing 

demonstration project which is being assisted by the Secretary of 

Housing and Urban Development pursuant to section 207 of the Housing Act 

of 1961 or who is purchasing a housing unit in connection with a 

homeownership program under the Homeownership and Opportunity Through 

HOPE Act, may obtain a loan to meet the payment required by paragraph 

(a) of this section and to pay settlement costs. Such loan shall be from 

a corporation or person satisfactory to the Commissioner. The settlement 

costs paid with the loan may include initial payments for taxes, hazard 

insurance premium, mortgage insurance premium, and other prepaid 

expenses, as determined by the Commissioner. As security for the loan, 

the mortgagor may give a note or other evidence of indebtedness bearing 

interest at a rate not in excess of that permitted in the insured 

mortgage. The aggregate amount of the insured mortgage and the loan 

referred to in this section shall not exceed an amount equal to the 

Commissioner's estimate of the appraised value of the property, plus an 

amount equal to the initial payments for taxes, hazard insurance 

premium, mortgage insurance premium, and



[[Page 158]]



other prepaid expenses, as determined by the Commissioner.



[36 FR 24508, Dec. 22, 1971, as amended at 48 FR 44067, Sept. 27, 1983; 

50 FR 40195, Oct. 2, 1985; 53 FR 8880, Mar. 18, 1988; 56 FR 4477, Feb. 

4, 1991; 61 FR 36263, July 9, 1996]