[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: 24CFR203.42]



[Page 167-168]

 

                 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.  203.42  Rental properties.



    (a) A mortgage on property upon which there is a dwelling to be 

rented by the mortgagor shall not be eligible for insurance if the 

property is a part of, or adjacent or contiguous to, a



[[Page 168]]



project, or group of similar rental properties, in which the mortgagor 

has a financial interest in eight or more dwelling units.

    (b) Paragraph (a) of this section shall not apply where:

    (1) A mortgage qualifies as a rehabilitation loan under Sec.  203.50 

of this part;

    (2) The mortgage is to be used for the rehabilitation of property 

located in a specific area or neighborhood that has been targeted by a 

State or local government for redevelopment, in accordance with a 

specific program that involves substantial public or private commitments 

in support of neighborhood improvement or redevelopment; and

    (3) The State or local government has approved, and has submitted to 

the Commissioner a plan describing the program of neighborhood 

redevelopment and revitalization, including the geographic area targeted 

for redevelopment, and the nature and proportion of public or private 

commitments that have been made in support of the redevelopment program.

    (c) No two-, three-, or four-family dwelling, and no single-family 

dwelling, if it is part of a group of five or more single-family 

dwellings held by the same mortgagor, or any part or unit thereof, shall 

be rented or offered for rent for transient or hotel purposes, as 

defined in Sec.  203.16, so long as the dwelling is subject to any 

insured mortgage.



[56 FR 27692, June 17, 1991, as amended at 61 FR 36264, July 9, 1996]