[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: 24CFR203.43]



[Page 168-170]

 

                 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.  203.43  Eligibility of miscellaneous type mortgages.



    (a) A mortgage which meets the requirements of this subpart, except 

as modified by this section, shall be eligible for insurance under this 

subpart subject to compliance with the additional requirements of this 

section.

    (b) The mortgage may be accepted for insurance if:

    (1) Executed in connection with the sale by the Government, or any 

agency or official thereof, of any housing acquired or constructed under 

Public Law 849, Seventy-sixth Congress, as amended; Public Law 781, 

Seventy-sixth Congress, as amended; or Public Law 9, 73 or 353, Seventy-

seventh Congress, as amended (including any property acquired, held or 

constructed in connection with such housing or to serve the inhabitants 

thereof); or

    (2) Executed in connection with the sale by the Public Housing 

Administration, or by any public housing agency with the approval of the 

said Administration, or any housing (including any property acquired, 

held or constructed in connection with such housing or to serve the 

inhabitants thereof) owned or financially assisted pursuant to the 

provisions of Public Law 671, Seventy-sixth Congress; or

    (3) Executed in connection with the sale by the Government, or any 

agency or official thereof, or any of the so-called Greenbelt towns, or 

parts thereof, including projects, or parts thereof, known as 

Greenhills, OH; Greenbelt, MD; and Greendale, WI, developed under the 

Emergency Relief Appropriation Act of 1935; or of any of the village 

properties or employee's housing under the jurisdiction of the Tennessee 

Valley Authority; or of any housing under the jurisdiction of the 

Department of the Interior located within the town area of Coulee Dam, 

WA, acquired by the United States for the construction, operation, and 

maintenance of Grand Coulee Dam and its appurtenant works or of any 

permanent housing under the jurisdiction of the Department of the 

Interior constructed under the Boulder Canyon Project Act of December 

21, 1928, as amended and supplemented, located within the Boulder City 

municipal area; or

    (4) Executed in connection with the sale by the Government, or any 

agency or official thereof, of any housing (including any property 

acquired, held, or constructed in connection therewith or to serve the 

inhabitants thereof) pursuant to the Atomic Energy Community Act of 

1955, as amended: Provided, That such insurance shall be issued without 

regard to any preferences or priorities except those prescribed by the 

National Housing Act or the Atomic Energy Community Act of 1955, as 

amended; or

    (5) Executed in connection with the sale by a State or municipality, 

or an agency, instrumentality, or political subdivision of either, of a 

project consisting of any permanent housing (including any property 

acquired, held or



[[Page 169]]



constructed in connection therewith or to serve the inhabitants 

thereof), constructed by or on behalf of such State, municipality, 

agency, instrumentality or political subdivision, for the occupancy of 

veterans (persons who have served in the active military or naval 

service of the United States at any time on or after September 16, 1940, 

and prior to July 26, 1947, or on or after June 27, 1950, and prior to 

February 1, 1955) their families and others: Provided, That the 

principal obligation of a mortgage referred to in this paragraph shall 

not exceed 90 percent of the appraised value of the mortgaged property; 

or

    (6) Executed in connection with the first resale, within two years 

from the date of its acquisition from the Government, of any portion of 

a project or property of the character described in paragraphs (b) (1), 

(2), (3), and (4) of this section.

    (c) The Commissioner may insure under this part, without regard to 

any limitation upon eligibility contained in the other provisions of 

this subpart, any mortgage given to refinance an existing mortgage 

insured under the National Housing Act. The refinancing mortgage must 

meet the following special requirements:

    (1)(i) Except as provided by paragraph (c)(1)(ii) of this section, 

the refinancing mortgage must be in an amount that does not exceed the 

least of (A) the original principal amount of the existing mortgage; (B) 

the sum of the outstanding principal balance of the existing mortgage, 

plus loan closing charges approved by the Commissioner; or (C) in the 

case of an eligible non-occupant mortgagor (as defined in Sec.  

203.18(f)), the outstanding balance of the existing mortgage.

    (ii) In the case of graduated payment mortgages insured under 

section 203 of the Act pursuant to section 245 (a) or (b) of the Act 

(Sec.  203.45 or Sec.  203.46 [as in effect immediately before its 

removal at 52 FR 32754, published August 28, 1987]), the refinancing 

mortgage must have a principal amount that does not exceed the 

outstanding balance of the existing mortgage.

    (iii) If a one-time mortgage insurance premium (MIP) was financed as 

part of the existing mortgage referred to in paragraphs (c)(1) (i) and 

(ii) of this section, the amount of the premium refund to which the 

mortgagor is entitled must be deducted in determining the original 

principal amount and the unpaid principal balance of the existing 

mortgage under paragraph (c)(1)(i) of this section and the outstanding 

balance of the existing mortgage under paragraph (c)(1)(ii) of this 

section. However, the maximum amount of the refinancing mortgage 

computed in accordance with this paragraph (c)(1) may be increased by 

the amount of the one-time MIP (if any) associated with the refinancing 

mortgage;

    (2) It must have a term which does not exceed the unexpired term of 

the existing mortgage, except that in any case where the Commissioner 

determines that an extension of the term of the mortgage will inure to 

the benefit of the applicable insurance fund, taking into consideration 

the outstanding insurance liability under the existing insured mortgage, 

the term may be extended to the lesser of (i) 30 years or (ii) the 

unexpired term of the existing mortgage, plus 12 years;

    (3) The mortgage must result in a reduction in regular monthly 

payments by the mortgagor, except:

    (i) When a fixed rate mortgage is given to refinance an adjustable 

rate mortgage held by a mortgagor who is to occupy the dwelling as a 

principal residence or secondary residence, as these terms are defined 

in Sec.  203.18(f); or

    (ii) When refinancing a mortgage for a shorter term will result in 

an increase in the mortgagor's regular monthly payments of no more than 

$50. In the case of a graduated payment mortgage, the reduction in 

regular monthly payments means a reduction from the payment due under 

the existing mortgage for the month in which the refinancing mortgage is 

executed.

    (4) It must be made by a mortgagor whose record of payment on the 

existing mortgage meets standards established by the Commissioner; and

    (5) The mortgagee may not require a minimum principal amount to be 

outstanding on the loan secured by the existing mortgage.

    (d)-(f) [Reserved]



[[Page 170]]



    (g) The provisions of Sec.  203.28 shall not apply to mortgages 

insured under this section.

    (h) The provisions of Sec.  203.38 shall not apply to mortgages of 

the character described in paragraph (b) of this section and at the time 

any such mortgage is insured there must be located on the mortgaged 

property a dwelling unit designed principally for residential use for 

not more than eight families.

    (i)-(j) [Reserved]

    (k) The Commissioner may insure under this part, without regard to 

any limitation upon eligibility contained in this subpart, any mortgage 

assigned to the Commissioner in connection with payment under a contract 

of mortgage insurance, or executed in connection with a sale by the 

Commissioner of any property acquired in the settlement of an insurance 

claim under any section or title of the National Housing Act.



[36 FR 24508, Dec. 22, 1971, as amended at 45 FR 30602, May 8, 1980; 47 

FR 29525, July 7, 1982; 52 FR 4139, Feb. 10, 1987; 52 FR 37287, Oct. 6, 

1987; 52 FR 44861, Nov. 23, 1987; 53 FR 8880, Mar. 18, 1988; 55 FR 

34805, Aug. 24, 1990; 55 FR 38033, Sept. 14, 1990; 61 FR 36264, July 9, 

1996]