[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: 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]