[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR1005.107]

[Page 805-806]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
 
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:
    (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

[[Page 806]]

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]