Office of Assistant Secretary for Housing, HUD § 213.251

but not limited to the following organi- MANAGEMENT HOUSING zations: local management agents, AND DISTRIBUTIVE SHARES local management associations and 213.275 Nature of the Cooperative Manage- management agents with centralized ment Housing Insurance Fund. facilities. Owners of multiple projects 213.276 Allocation of Cooperative Manage- may centralize the electronic trans- ment Housing Insurance Fund income or losses. mission function. However, owners 213.277 Right and liability under the Coop- that contract out or centralize the erative Management Housing Insurance electronic transmission function are Fund. required to retain the ability to mon- 213.278 Distribution of distributive share. itor the day-to-day operations of the 213.279 Maximum amount of distributive share. project at the project site and be able 213.280 Finality of determination. to demonstrate that ability to the rel- evant HUD field office. Subpart C—Individual Released From Project Mortgage; Expiring Program [58 FR 61022, Nov. 19, 1993, as amended at 59 FR 43475, Aug. 24, 1994] 213.501 Savings clause. AUTHORITY: 12 U.S.C. 1715b, 1715e; 42 U.S.C. PART 213—COOPERATIVE 3535(d). HOUSING MORTGAGE INSURANCE SOURCE: 36 FR 24553, Dec. 22, 1971, unless otherwise noted. Subpart A—Eligibility Requirements— Projects Subpart A—Eligibility Sec. Requirements—Projects 213.1 Eligibility requirements. § 213.1 Eligibility requirements. Subpart B—Contract Rights and The eligibility requirements set forth Obligations—Projects in 24 CFR part 200, subpart A, apply to multifamily project mortgages insured 213.251 Cross-reference. under section 213 of the National Hous- 213.252 Definitions. ing Act (12 U.S.C. 1715e), as amended. 213.253 Premiums upon initial endorsement. 213.254 Premiums where first principal pay- [61 FR 14405, Apr. 1, 1996] ment more than one year after initial en- dorsement. Subpart B—Contract Rights and 213.255 Premiums where first principal pay- Obligations—Projects ment one year or less after initial en- dorsement. § 213.251 Cross-reference. 213.256 Premiums; insurance upon comple- (a) All of the provisions of subpart B, tion. 213.257 Premiums; purchasing ; part 207 of this chapter covering mort- Existing Construction, supplementary gages insured under section 207 of the loans to purchase existing community fa- National Housing Act, apply with full cility. force and effect to mortgages insured 213.258 Subsequent annual premiums. under section 213 of the National Hous- 213.259 Computation of subsequent annual ing Act, except the following provi- premiums. sions: 213.259a Premiums—mortgages insured pur- Sec. suant to Section 238(c) of the Act. 207.251 Definitions. 213.260 Allowable methods of premium pay- 207.252 First, second, and third premiums. ment. 207.254 Form of endorsement. 213.265 Modifications and consolidations. 213.266 Initial insurance endorsement. (b) For the purposes of this subpart, 213.266a Insurance fund obligations. all references in part 207 of this chapter 213.267 Effect of insurance endorsement. to section 207 of the National Housing 213.268 Final insurance endorsement. Act shall be deemed to refer to section 213.269 Endorsement of supplementary 213 of the Act, and all references in loans. part 207 of this chapter to the General 213.270 Supplementary loans; election of ac- Insurance Fund shall be deemed to tion; claims; debentures. refer to the Cooperative Management

321

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00331 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB § 213.252 24 CFR Ch. II (4–1–20 Edition)

Housing Insurance Fund in cases in- original mortgage and the instrument volving mortgages which are the obli- securing the operating loss loan. gation of the Cooperative Management (d) Mortgagee means the original Housing Insurance Fund. lender under a mortgage, its successors (c) The provisions of §§ 207.255, 207.256, and such of its assigns as are approved 207.257, 207.261, 207.262 and 207.263 of this by the Commissioner, and includes the chapter shall apply to supplementary holders of the credit instruments loans insured under section 213(j) of the issued under a trust indenture, mort- Act. In connection with the foregoing gage or of trust pursuant to which provisions the terms mortgagor, mort- such holders act by and through a gagee, mortgage shall be construed to trustee therein named. mean borrower, lender, and supple- (e) Mortgagor means the original bor- mentary loan, including required security rower under a mortgage and its succes- instrument. sors and such of its assigns as are ap- (d) Where the provisions of this sub- part are applicable to supplementary proved by the Commissioner. loans, the terms mortgagor, mortgagee, (f) Project Mortgage means a blanket mortgage, shall be construed to mean mortgage insured under section 213 of borrower, lender, and supplementary the Act, covering a group of not less loan, including required security instru- than five single-family dwellings. ment. (e) Where the provisons of this sub- § 213.253 Premiums upon initial en- part are applicable to operating loss dorsement. loans, the terms mortgagor, mortgagee (a) Management and Sales Types and and mortgage shall be construed to Investor Sponsored Projects. The mort- mean borrower, lender and operating loss gagee, upon the initial endorsement of loan, including required security instru- the mortgage for insurance, shall pay ment, respectively. to the Commissioner a first mortgage [36 FR 24553, Dec. 22, 1971, as amended at 37 insurance premium equal to one-half of FR 8662, Apr. 29, 1972] one percent of the original face amount of the mortgage. § 213.252 Definitions. (b) Purchasing cooperatives. The provi- The definitions contained in § 213.1 sions of paragraph (a) of this section do shall apply to this subpart and in addi- not apply to the mortgage or a pur- tion the following terms shall have the chasing nonprofit cooperative housing meaning indicated. corporation or trust where such mort- (a) Contract of Insurance means the gage is endorsed for insurance pursuant agreement evidenced by endorsement to the sale of an Investor Sponsored of the credit instrument by the Com- Project to such purchasing nonprofit missioner or his duly authorized rep- cooperative housing corporation or resentative and includes the terms, trust. conditions and provisions of this sub- (c) Existing Construction. The provi- part and of the National Housing Act. sions of paragraph (a) of the section (b) Insured mortgage means a mort- shall apply to a mortgage covering Ex- gage which has been insured by the en- isting Construction which involves in- dorsement of the credit instrument by surance of advances for Commissioner the Commissioner. approved or required repairs, improve- (c) Mortgage means such a first lien ments, alterations and additions. upon and other as (d) Operating loss loans and supple- is commonly given to secure advances mentary loans. The provisions of para- on, or the unpaid purchase price of, graph (a) of this section shall apply to real estate under the laws of the State, any operating loss loan and to any sup- district or territory in which the real estate is located, together with the plementary loan, except a supple- credit instrument or instruments, if mentary loan to finance the acquisi- any, secured thereby. In any instance tion of an existing community facility. where an operating loss loan is in- volved, the term shall include both the

322

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00332 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB Office of Assistant Secretary for Housing, HUD § 213.255

§ 213.254 Premiums where first prin- chasing nonprofit cooperative housing cipal payment more than one year corporation or trust where such mort- after initial endorsement. gage is endorsed for insurance pursuant (a) Management and Sales Types and to the sale of an Investor Sponsored Investor Sponsored Projects. (1) If the Project to such purchasing nonprofit date of the first principal payment is cooperative housing corporation or more than one year following the date trust. of such initial insurance endorsement, (c) Existing Construction. The provi- the mortgagee, upon the anniversary of sions of paragraph (a) of this section such insurance date, shall pay a second shall apply to a mortgage covering Ex- premium equal to one-half of one per- isting Construction which involves in- cent of the original face amount of the surance of advances for Commissioner mortgage. On the date of the first prin- approved or required repairs, improve- cipal payment, the mortgagee shall pay ments, alterations and additions. a third premium equal to one-half of (d) Supplementary loan; insurance of one percent of the average outstanding advances. The provisions of paragraph principal obligation of the mortgage (a) shall apply to any supplementary for the following year which shall be loan involving insurance of advances. adjusted so as to accord with such date and so that the aggregate of the first, § 213.255 Premiums where first prin- second and third premiums shall equal cipal payment one year or less after initial endorsement. the sum of: (i) One percent of the average out- (a) Management and Sales Types and standing principal obligation of the Investor Sponsored Projects. (1) If the mortgage for the year following the date of the first principal payment is date of initial insurance endorsement, one year, or less than one year fol- and lowing the date of such initial insur- (ii) One-half of one percent per ance endorsement, the mortgagee, annum of the average outstanding upon such first principal payment date, principal obligation of the mortgage shall pay a second premium equal to for the period from the first anniver- one-half of one percent of the average sary of the date of initial insurance en- outstanding principal obligation of the dorsement to one year following the mortgage for the following year which date of the first principal payment. shall be adjusted so as to accord with (2) If the date of the first principal such date and so that the aggregate of payment of a mortgage is more than the first and second premiums shall one year following the date of the ini- equal the sum of tial insurance endorsement and the (i) One percent per annum of the av- mortgage is paid in full prior to the erage outstanding principal obligation date of such first principal payment, of the mortgage for the period from the the first and second premiums col- date of initial insurance endorsement lected shall be adjusted so that the ag- to the date of first principal payment, gregate of the two premiums shall and equal the sum of: (ii) One-half of one percent of the av- (i) One percent of the average out- erage outstanding principal obligation standing principal obligation of the of the mortgage for the year following mortgage for the year following the the date of the first principal payment. date of the initial insurance endorse- (2) If the date of the first principal ment and payment of a mortgage is one year or (ii) One-half of one percent per less than one year following the date of annum of the average outstanding the initial insurance endorsement and principal obligation of the mortgage the mortgage is paid in full prior to the for the period from the first anniver- date of such first principal payment, sary of the date of initial endorsement the first and only premium collected to the date the mortgage was paid in shall be adjusted so that the total pre- full. mium shall equal one percent per (b) Purchasing cooperatives. The provi- annum of the average outstanding sions of paragraph (a) of this section do principal obligation of the mortgage not apply to the mortgage of a pur- for the period from the date of initial

323

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00333 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB § 213.256 24 CFR Ch. II (4–1–20 Edition)

insurance endorsement to the date the of the insurance endorsement to the mortgage was paid in full. date the mortgage was paid in full. (b) Purchasing cooperatives. The provi- (b) Purchasing cooperatives. The provi- sions of paragraph (a) of this section do sions of paragraph (a) of this section do not apply to the mortgage of a pur- not apply to the mortgage of a pur- chasing nonprofit cooperative housing chasing nonprofit cooperative housing corporation or trust where such mort- corporation or trust where such mort- gage is endorsed for insurance pursuant gage is endorsed for insurance pursuant to the sale of an Investor Sponsored to the sale of an Investor Sponsored Project to such purchasing nonprofit Project to such purchasing nonprofit cooperative housing corporation or cooperative housing corporation or trust. trust. (c) Existing Construction. The provi- sions of paragraph (a) of this section (c) Existing Construction. The provi- shall apply to a mortgage covering Ex- sions of paragraph (a) of this section isting Construction which involves in- shall apply to Existing Construction surance of advances for Commissioner not involving insurance of advances approved or required repairs, improve- but involved Commissioner approved or ments, alterations and additions. required repairs, improvements, alter- (d) Supplementary loan; insurance of ations and additions. advances. The provisions of paragraph (d) Supplementary loans; Commitment shall apply to a supplementary loan in- to Insure Upon Completion. The provi- volving insurance of advances. sions of paragraphs (a) and (b) of this section shall apply to a supplementary § 213.256 Premiums; insurance upon loan endorsed for insurance pursuant completion. to a Commitment to Insure Upon Com- (a) Management and Sales Types and pletion. Investor Sponsored Projects. (1) Where the mortgage is initially and finally § 213.257 Premiums; purchasing co- endorsed for insurance pursuant to a operatives; Existing Construction; Commitment to Insure Upon Comple- supplementary loans to purchase tion, the mortgagee on the date of the existing community facility. first principal payment shall pay a sec- (a) Where a mortgage is endorsed for ond premium equal to one-half of one insurance pursuant to the sale of an In- percent of the average outstanding vestor Sponsor Project or covers Exist- principal obligation of the mortgage ing Construction not involving Com- for the year following such first prin- missioner approved or required repairs, cipal payment date which shall be ad- improvements, alterations and addi- justed so as to accord with such date tions, the mortgagee, on the date of and so that the aggregate of the first the insurance endorsement, shall pay a and second premiums shall equal the first premium equal to one-half of one sum of one-half of one percent per percent of the principal obligation of annum of the average outstanding the mortgage for the period from the principal obligation of the mortgage date of the insruance endorsement to for the period from the date of the in- one year following the date of the first surance endorsement to one year fol- principal payment. On the anniversary lowing the date of the first principal payment. of the first principal payment, this (2) Where the mortgage is initially first premium shall be adjusted to and finally endorsed for insurance pur- equal one-half of one percent of the av- suant to a Commitment to Insure Upon erage outstanding principal obligation Completion and is paid in full prior to of the mortgage for the period from the the date of the first principal payment, date of the insurance endorsement to the first and only premium collected one year following the date of the first shall be adjusted so that the total pre- principal payment. mium shall equal one-half of one per- (b) The premium provisions of para- cent per annum of the average out- graph (a) of this section shall apply to standing principal obigation of the a supplementary loan to purchase an mortgage for the period from the date existing community facility.

324

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00334 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB Office of Assistant Secretary for Housing, HUD § 213.267

§ 213.258 Subsequent annual pre- deemed to be paid in full as of the date miums. of such modification and consolidation. (a) Until the mortgage is paid in full [37 FR 8662, Apr. 29, 1972] or until receipt by the Commissioner of an application for insurance benefits, § 213.266 Initial insurance endorse- or until the contract of insurance is ment. otherwise terminated with the consent The Commissioner shall indicate his of the Commissioner, the mortgagee, insurance of the mortgage or supple- on each anniversary of the date of the mentary loan by endorsing the original first principal payment, shall pay an credit instrument and identifying the annual mortgage insurance premium section of the Act and the regulations equal to one-half of one percent of the under which the mortgage or supple- average outstanding principal obliga- mentary loan is insured and the date of tion of the mortgage for the year fol- insurance. lowing the date on which such pre- mium becomes payable. § 213.266a Insurance fund obligations. (b) The provisions of paragraph (a) of A mortgage endorsed for insurance this section shall apply to operating under section 213 of the Act shall be loss loans and to supplementary loans. the obligation either of the Coopera- tive Management Housing Insurance § 213.259 Computation of subsequent Fund or of the General Insurance Fund. annual premiums. The determination of the applicable The premiums payable on and after fund shall be governed by the fol- the date of the first principal payment lowing: shall be calculated in accordance with (a) A mortgage insured under section the amortization provisions without 213(a)(1) of the Act or under section taking into account delinquent pay- 213(a)(3) if the project has been ac- ments or prepayments. quired by a cooperative corporation or under section 213 (i) or (j) shall be the § 213.259a Premiums—mortgages in- obligation of the Cooperative Manage- sured pursuant to section 238(c) of the Act. ment Housing Insurance Fund, where it has been insured pursuant to a com- All of the provisions of §§ 213.253 mitment issued on or after August 10, through 213.259 governing mortgage in- 1965, or insured pursuant to a commit- surance premiums shall apply to mort- ment issued prior to such date, and gages insured under this subpart pursu- transferred to the Cooperative Manage- ant to section 238(c) of the Act, except ment Housing Insurance Fund. that all mortgage insurance premiums (b) A mortgage insured under section due on such mortgages in accordance 213(a)(2) of the Act or under section with §§ 213.253 through 213.259 shall be 213(a)(3) where the project has not been calculated on the basis of one percent. acquired by a cooperative corporation [42 FR 59675, Nov. 18, 1977] shall be the obligation of the General Insurance Fund. A mortgage insured § 213.260 Allowable methods of pre- prior to August 10, 1965, or insured pur- mium payment. suant to a commitment issued prior to Premiums shall be payable in cash or such date, where the project has not in debentures at par plus accrued inter- been transferred to the Cooperative est. All premiums are payable in ad- Management Housing Insurance Fund, vance and no refund can be made of shall also be the obligation of the Gen- any portion thereof except as herein- eral Insurance Fund. after provided in this part. § 213.267 Effect of insurance endorse- § 213.265 Modifications and consolida- ment. tions. From the date of initial endorse- Where a mortgage covering an inves- ment, the Commissioner and the mort- tor sponsored project is modified and gagee or lender shall be bound by the consolidated with the mortgage of a provisions of this subpart to the same purchasing nonprofit cooperative hous- extent as if they had executed a con- ing corporation or trust, it shall be tract including the provisions of this

325

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00335 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB § 213.268 24 CFR Ch. II (4–1–20 Edition)

subpart and the applicable sections of without recourse or warranty, except the Act. that the lender must warrant that no act or omission of the lender has im- § 213.268 Final insurance endorse- paired the validity and priority of such ment. security instrument or instruments, When all advances of mortgage or that the security instrument or instru- loan proceeds have been made and all ments, are prior to all mechanics’ and the terms and conditions of the com- materialmen’s liens filed of record sub- mitment have been complied with to sequent to the recording of such secu- the satisfaction of the Commissioner, rity instrument or instruments regard- he shall indicate on the original credit less of whether such liens attached instrument the total of all advances he prior to such recording date, and prior has approved for insurance and again to all liens and which endorse such instrument. may have attached or defects which may have arisen subsequent to the re- § 213.269 Endorsement of supple- cording of such security instrument or mentary loans. instruments, except such liens or other The provisions of §§ 213.266, 213.267, matters as may be approved by the and 213.268 shall apply to supple- Commissioner, that the amount stated mentary loans. in the instrument of assignment is ac- tually due and owing under the secu- § 213.270 Supplementary loans; elec- rity instrument or instruments, that tion of action; claims; debentures. there are no offsets or counterclaims (a) Election of action. Where a real es- thereto, and that the lender has a good tate mortgage, deed of trust, condi- right to assign such note and security tional sales contract, chattel mort- instrument or instruments; gage, lien, judgement, or any other se- (4) All hazard insurance policies held curity device has been used to secure on property serving as security for the the payment of a loan made under the loan or other evidence of insurance provisions of this section, the lender coverage acceptable to the Commis- may not, except with the approval of sioner, together with a copy of the the Commissioner, both proceed lender’s notification to the carrier au- against such security and also make thorizing the amendment of the loss claim under its contract of insurance, payable clause substituting the Com- but shall elect which method it desires missioner as the holder of the security to pursue. instrument; (b) Maximum claim period. Notice of (5) The assignment to the Commis- intention to file claim on a form pre- sioner of all rights and interests aris- scribed by the Commissioner shall be ing under the note and security instru- filed within 45 days after the lender be- ment or instruments so in , and comes eligible for the benefits of the all claims of the lender against the bor- loan insurance, or within such later rower or others arising out of the loan time as may be agreed upon by the transaction; Commissioner in writing. (6) All policies of title or other insur- (c) Items to be filed on submitting claim. ance or surety bonds, or other guaran- Within 30 days after the filing of the tees and any and all claims thereunder; notice of intention to file claim, or including evidence satisfactory to the within such further period as may be Commissioner that the original title agreed upon by the Commissioner in coverage has been extended to include writing, the lender shall file with the the assignment of the note and the se- Commissioner: curity instrument or instruments to (1) The fiscal data pertaining to the the Commissioner; loan transaction; (7) Any balance of the loan not ad- (2) Receipts covering all disburse- vanced to the borrower; ments as required by the fiscal data (8) Any cash or property held by the form; lender or its agents or to which it is (3) The original note and any secu- entitled; including deposits made for rity instrument or instruments which the account of the borrower and which shall be assigned to the Commissioner have not been applied in reduction of

326

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00336 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB Office of Assistant Secretary for Housing, HUD § 213.276

the principal obligation under the note and any difference not in excess of $50 and security instrument or instru- between the amount of debentures to ments; which the lender is otherwise entitled (9) All records, ledger cards, docu- hereunder and the aggregate face value ments, books, papers and accounts re- of the debentures issued shall be paid lating to the loan transaction; in cash by the Commissioner to the (10) Any additional information or lender. data which the Commissioner may re- (i) Redemption of debentures. Deben- quire. tures shall, at the option of the Com- (d) Claim computation. Upon an ac- missioner and with the approval of the ceptable assignment of the note and se- Secretary of the Treasury, be redeem- curity instrument, the Commissioner able at par plus accrued interest on shall pay the claim of the lender in any semiannual interest payment date cash, in debentures or in a combination on 3 months’ notice of redemption of both, as determined by the Commis- given in such manner as the Commis- sioner at the time of payment. The sioner shall prescribe. The debenture payment shall be in an amount equal interest on the debentures called for to the unpaid principal balance of the redemption shall cease on the semi- supplementary loan plus: annual interest payment date des- (1) Any accrued interest due on the ignated in the call notice. The Com- supplementary loan as of the date of missioner may include with the notice execution of its assignment to the of redemption an offer to purchase the Commissioner; debentures at par plus accrued interest (2) Any advance made previously at any time during the period between under the provisions of the loan instru- the notice of redemption and the re- ment and approved by the Commis- demption date. If the debentures are sioner; purchased by the Commissioner after (3) Reimbursement for such reason- such call and prior to the named re- able collection costs, court costs, and demption date, the debenture interest attorney’s fees as may be approved by shall cease on the date of purchase. the Commissioner; (j) Issue date of debentures. The deben- (4) An amount equivalent to the de- tures shall be issued as of the date of benture interest which would have the execution of the assignment of the been earned on the portion of the in- supplementary loan in accordance with surance benefits paid in cash, as of the the requirements of paragraph (c)(3) of date such cash payment is made, ex- this section. cept that when the lender fails to meet any one of the applicable requirements COOPERATIVE MANAGEMENT HOUSING of paragraphs (b) and (c) of this section INSURANCE AND DISTRIBUTIVE SHARES within the specified time and in a man- ner satisfactory to the Commissioner § 213.275 Nature of the Cooperative (or within such further time as the Management Housing Insurance Commissioner may approve in writing), Fund. the interest allowance in such cash The Cooperative Management Hous- payment shall be computed only to the ing Insurance Fund shall consist of the date on which the particular required General Surplus Account and the Par- action should have been taken or to ticipating Reserve Account. which it was extended. (e) Debenture interest. The debentures § 213.276 Allocation of Cooperative shall bear interest as provided in Management Housing Insurance § 207.259(e)(6) of this chapter. Fund income or losses. (f) Maturity of debentures. Debentures For any semiannual period in which shall mature 20 years from the date of Cooperative Management Housing In- issue. surance Fund operations shall result in (g) Registration of debentures. Deben- a net income, or loss, the Commis- tures shall be registered as to principal sioner shall allocate such net income and interest. or such loss to the General Surplus Ac- (h) Denomination of debentures. Deben- count, to the Participating Reserve Ac- tures shall be issued in multiples of $50 count, or to both, as he may determine

327

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00337 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB § 213.277 24 CFR Ch. II (4–1–20 Edition)

to be in accordance with sound actu- Subpart C—Individual Properties arial and accounting practice. In deter- Released From Project Mort- mining net income or loss, the Com- gage; Expiring Program missioner shall take into consideration all income received from fees, pre- § 213.501 Savings clause. miums, and earnings on investments of No new loans are being insured under the Fund, operating expenses, and pro- the Cooperative Housing Mortgage In- vision for losses of the Fund. surance Program for individual prop- erties released from a project mort- § 213.277 Right and liability under the gage. Any existing insured loans on in- Cooperative Management Housing Insurance Fund. dividual properties released from a project mortgage under this program No mortgagor or mortgagee shall will continue to be governed by the have any vested right in a credit bal- regulations on eligibility require- ance in either the General Surplus Ac- ments, contract rights and obligations, count or the Participating Reserve Ac- and servicing responsibilities in effect count. No mortgagor or mortgagee as they existed immediately before De- shall be subject to any liability arising cember 26, 1996. under the mutuality of the Cooperative [61 FR 60160, Nov. 26, 1996] Management Housing Insurance Fund.

§ 213.278 Distribution of distributive PART 214—HOUSING COUNSELING share. PROGRAM When the contract of insurance is terminated by reason of payment in Subpart A—General Program Requirements full of the mortgage or by voluntary termination approved by the Commis- Sec. sioner, and at such time or times prior 214.1 Purpose. to such termination as the Commis- 214.3 Definitions. sioner may approve, the Commissioner may distribute to a mortgagor under a Subpart B—Approval and Disapproval of mortgage that is the obligation of the Housing Counseling Agencies Cooperative Management Housing In- 214.100 General. surance Fund a share of the Partici- 214.103 Approval criteria. pating Reserve Account in such man- 214.105 Preliminary application process. ner and amount as he shall determine 214.107 Approval by HUD. to be equitable and in accordance with 214.109 Disapproval by HUD. sound actuarial and accounting prac- Subpart C—Inactive Status, Termination, tice. and Appeals § 213.279 Maximum amount of dis- 214.200 Inactive status. tributive share. 214.201 Termination of HUD-approved status In no event shall a distributive share and grant agreements. 214.203 Re-approval or removal as a result of of the Participating Reserve Account a performance review. exceed the aggregate paid scheduled 214.205 Appeals. annual premiums of the mortgagor paid to the year of termination of the Subpart D—Program Administration insurance or to the year of payment of 214.300 Counseling services. the share, if paid prior to termination. 214.303 Performance criteria. 214.305 Agency profile changes. § 213.280 Finality of determination. 214.307 Performance review. The determination of the Commis- 214.309 Reapproval and disapproval based on sioner as to the amount to be paid to performance review. any mortgagor from the Cooperative 214.311 Housing counseling grant funds. Management Housing Insurance Fund 214.313 Housing counseling fees. 214.315 Recordkeeping. shall be final and conclusive. 214.317 Reporting.

328

VerDate Sep<11>2014 14:25 Jun 01, 2020 Jkt 250083 PO 00000 Frm 00338 Fmt 8010 Sfmt 8010 Q:\24\24V2.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB