Rule2024-29390
Disbursing Multifamily Mortgage Proceeds: Permitting Mortgagees To Disburse Mortgage Proceeds With Mortgagor-Provided Funds
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 13, 2024
Effective
January 13, 2025
Issuing agencies
Housing and Urban Development Department
Abstract
When funds provided by a mortgagor to a mortgagee are not fully disbursed with the initial advance of the insured mortgage proceeds, this final rule permits mortgagees to disburse up to 1 percent of the mortgage amount initially endorsed for insurance before requiring that the funds provided by the mortgagor be disbursed in full. This change to HUD's requirements removes unusual and burdensome mortgage servicing practices that may result from pooling mortgages into mortgage-backed securities guaranteed by the Government National Mortgage Association prior to the funds provided by the mortgagor being disbursed in full. This final rule adopts HUD's August 6, 2024, proposed rule with only minor, non-substantive revisions.
Full Text
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<title>Federal Register, Volume 89 Issue 240 (Friday, December 13, 2024)</title>
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[Federal Register Volume 89, Number 240 (Friday, December 13, 2024)]
[Rules and Regulations]
[Pages 100739-100743]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29390]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 200
[Docket No. FR-6423-F-02]
RIN 2502-AJ72
Disbursing Multifamily Mortgage Proceeds: Permitting Mortgagees
To Disburse Mortgage Proceeds With Mortgagor-Provided Funds
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Department of Housing and Urban Development (HUD).
ACTION: Final rule.
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SUMMARY: When funds provided by a mortgagor to a mortgagee are not
fully disbursed with the initial advance of the insured mortgage
proceeds, this final rule permits mortgagees to disburse up to 1
percent of the mortgage amount initially endorsed for insurance before
requiring that the funds provided by the mortgagor be disbursed in
full. This change to HUD's requirements removes unusual and burdensome
mortgage servicing practices that may result from pooling mortgages
into mortgage-backed securities guaranteed by the Government National
Mortgage Association prior to the funds provided by the mortgagor being
disbursed in full. This final rule adopts HUD's August 6, 2024,
proposed rule with only minor, non-substantive revisions.
DATES: Effective January 13, 2025.
FOR FURTHER INFORMATION CONTACT: Margaret Lawrence, Deputy Director,
Office of Multifamily Production, Department of Housing and Urban
Development, 451 7th Street SW, Room 6134, Washington, DC 20410,
telephone 202-431-7397 (this is not a toll-free number). HUD welcomes
and is prepared to receive calls from individuals who are deaf or hard
of hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
SUPPLEMENTARY INFORMATION:
I. Background
24 CFR 200.54 and Ginnie Mae Guaranteed Mortgage-Backed Securities
Mortgagees seeking to originate a Federal Housing Administration
(FHA)-insured mortgage regulated pursuant to 24 CFR part 200, subpart
A, must comply with the project completion funding requirements in 24
CFR 200.54. These requirements provide that a mortgagor must deposit
funds with its mortgagee that are sufficient, when added to the
proceeds from the FHA-insured mortgage, to assure completion of planned
multifamily or healthcare facility project work and to pay the initial
service charge, carrying charges, and legal and organization expenses
incident to the construction of the project. Typically, 24 CFR
200.54(b) requires that the funds deposited by the mortgagor with the
mortgagee (mortgagor-provided funds) must be disbursed in full for
project work, material, and incidental charges and expenses
(collectively, ``project-related expenses'') before the mortgagee may
disburse any mortgage proceeds. HUD requires that mortgagees disburse
the mortgagor-provided funds in full before disbursing any mortgage
proceeds as a basic risk measure.\1\
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\1\ HUD's regulations at 24 CFR 200.54(c) allow an exception to
the requirement in 24 CFR 200.54(b) for certain projects involving
low-income housing tax credit syndication proceeds, historic tax-
credit syndication proceeds, New Markets Tax Credits proceeds, and
funds provided by a grant or loan from a Federal, State, or local
government.
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For most mortgages regulated pursuant to 24 CFR part 200, subpart
A, the mortgagor-provided funds are disbursed in full to pay for
project-related expenses with the initial advance of the insured
mortgage proceeds at the time the insured mortgage is endorsed. For
certain mortgages, however, the amount of mortgagor-provided funds
exceeds the amount of project-related expenses due at the time the
insured mortgage is endorsed. Where the mortgagor-provided funds are
not fully disbursed at the time the insured mortgage is endorsed, the
mortgagor-provided funds are fully disbursed through subsequent
disbursements by the mortgagee, usually with the mortgagor-provided
funds
[[Page 100740]]
being disbursed within two months after the insured mortgage is
endorsed.
Given that 24 CFR 200.54(b) does not typically permit insured
mortgage proceeds to be disbursed until the mortgagee disburses all
mortgagor-provided funds, if the mortgagor-provided funds are not fully
disbursed at the time the insured mortgage is endorsed, there may be
challenges in pooling the mortgage into a mortgage-backed security
(MBS) guaranteed by the Government National Mortgage Association
(Ginnie Mae) without conflicting with 24 CFR 200.54(b), possibly
creating financial difficulties for the mortgagor.\2\ As such, for an
insured mortgage to be pooled into a Ginnie Mae guaranteed MBS, the
insured mortgage proceeds must be permitted to be disbursed.
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\2\ For additional information about Ginnie Mae and Ginnie Mae's
guarantee of MBSs, see Ginnie Mae's About Us web page, available at
<a href="https://www.ginniemae.gov/about_us/who_we_are/Pages/funding_government_lending.aspx">https://www.ginniemae.gov/about_us/who_we_are/Pages/funding_government_lending.aspx</a>.
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This financial difficulty created by 24 CFR 200.54(b) typically
only exists for a short period of usually no longer than two months
after the endorsement of the FHA-insured mortgage, by which time the
mortgagor-provided funds are usually fully disbursed. During the short
period, the mortgagee must implement unusual and burdensome mortgage
servicing practices to maintain compliance with 24 CFR 200.54(b). If a
mortgagee is unable to pool an insured mortgage into a Ginnie Mae
guaranteed MBS at endorsement, the mortgagee might never be able to
securitize the insured mortgage and might fail to meet contractually
required delivery dates between the mortgagee and investor. This could
potentially lead to costly investor compensation fees. The mortgagee
may also experience issues relating to its financial liquidity cycle.
When many insured mortgages are unable to be pooled into Ginnie Mae
guaranteed MBSs at the time the insured mortgages are endorsed,
cascading issues for the broader mortgage market can occur. These can
include reducing the overall liquidity of the mortgage market and
increasing the cost on mortgagors to borrow funds, which reduces the
availability of housing and ultimately harms HUD's mission to create
strong, sustainable, inclusive communities and affordable homes for
all.
Partial Regulatory Waiver of 24 CFR 200.54(b)
HUD has recently addressed this issue with the requirements in 24
CFR 200.54(b) for mortgages insured under National Housing Act sections
213 and 221(d)(4) by issuing a partial regulatory waiver of the
requirements of 24 CFR 200.54(b) (Partial Waiver of 24 CFR
200.54(b)).\3\ The Partial Waiver of 24 CFR 200.54(b) partially waives
the requirement in 24 CFR 200.54(b) that mortgagor-provided funds
``must be disbursed in full'' for project-related expenses before any
disbursement of funds from the insured mortgage. Instead, the Partial
Waiver of 24 CFR 200.54(b) permits a mortgagee to disburse funds from
the insured mortgage in an amount up to one-half percent (0.5%) of the
initially endorsed mortgage amount. The Partial Waiver of 24 CFR
200.54(b) allows mortgagees to comply with FHA's requirements and pool
insured mortgages into Ginnie Mae guaranteed MBSs.
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\3\ The Partial Waiver of 24 CFR 200.54(b) was initially granted
in July 2021. See 87 FR 14563 (Mar. 15, 2022). The Partial Waiver of
24 CFR 200.54(b) has subsequently been extended and remains in
effect until July 4, 2025.
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II. The Proposed Rule
On August 6, 2024, HUD published for public comment a proposed rule
entitled ``Disbursing Multifamily Mortgage Proceeds: Permitting
Mortgagees to Disburse Mortgage Proceeds with Mortgagor-Provided
Funds.'' \4\ The proposed rule proposed to add an exception to the
requirement in 24 CFR 200.54(b) that the funds provided by the
mortgagor must be disbursed in full before the disbursement of any
proceeds from the insured mortgage. The proposed rule also proposed to
make non-substantive terminology and organizational edits to 24 CFR
200.54 that would not affect any other requirements within the section.
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\4\ 89 FR 63847.
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The exception proposed to be added to 24 CFR 200.54(b) would permit
mortgagees, where the funds provided by the mortgagor are not fully
disbursed with the initial advance of the insured mortgage proceeds, to
disburse up to 1 percent of the mortgage amount initially endorsed for
insurance before requiring that the funds provided by the mortgagor be
disbursed in full. This proposed exception would permit that a
mortgagee could disburse mortgage proceeds at the time the mortgage is
initially endorsed for insurance up to a maximum of 1 percent of the
initially endorsed mortgage amount. Alternatively, a mortgagee could
choose to disburse mortgage proceeds in any amount on a monthly basis,
whether consecutive or not, up to a combined maximum of 1 percent of
the initially endorsed insured mortgage amount until the mortgagor-
provided funds are fully disbursed.
III. This Final Rule
After reviewing and considering the public comments received during
the proposed rule stage of this rulemaking, HUD is publishing this
final rule with only minor, non-substantive revisions from the proposed
rule. HUD believes that the added exception to 24 CFR 200.54(b) will
help keep FHA-insured mortgage products competitive in economic
environments with rising interest rates and/or multi-year high interest
rates, especially for new construction projects, where a higher
proportion of mortgage proceeds are constrained by FHA's debt service
coverage ratio requirements. In an economic environment with rising and
high interest rates, mortgagors must deposit additional funds with
their mortgagee, making it more likely that the mortgagor-provided
funds will not be fully disbursed during the initial advance of the
insured mortgage proceeds. HUD believes that this added exception will
help ensure that interest rates for FHA-insured mortgages remain
competitive and ensure the liquidity of FHA-insured mortgages on the
secondary mortgage market.
IV. Public Comments
This public comments section contains a summary of the public
comments that HUD received in response to the proposed rule.
HUD should allow mortgage proceeds to be disbursed using a
proportional debt to equity amount without requiring that mortgagor-
proved funds first be fully exhausted.
A commenter supported the proposed rule as a step in the right
direction but suggested that HUD go further. Other commenters supported
HUD's goal to allow mortgagees to pool mortgages into Ginnie Mae
guaranteed MBSs prior to mortgagor-provided funds being disbursed in
full but believed the rule as proposed would be ineffective.
A commenter stated that HUD's proposed rule should be changed to
allow mortgage proceeds to be drawn for HUD-covered multifamily loans
proportionate to the proportion of the amount of debt i.e., the loan
amount, to equity, i.e., the mortgagor-provided funds, in the HUD
transaction. As the commenter provided by example, a loan that has a 60
percent loan to cost ratio would, at each draw, draw 60 percent from
the Ginnie Mae MBS and 40% from borrower equity.
Another commenter, similarly, suggested that HUD allow up to 35
percent of the insured loan proceeds to be drawn at initial
endorsement, and then allow subsequent draws in
[[Page 100741]]
proportion to the mortgagor's remaining funds. This commenter stated
that their recommendation would significantly lower insured loan
interest rates.
Commenters pointed to the problems associated with higher interest
rates for construction loans and stated that their recommendations
would address the issue of investors requiring higher interest rates to
hedge variable interest rates while waiting for issuance.
A commenter stated that the multiple Ginnie Mae guaranteed MBSs
issued and delivered in various amounts to a Ginnie Mae investor over
the length of the construction period, typically 18 to 24 months, are
delivered to the investor in an amount equal to the mortgage proceeds
disbursed and, in months where no mortgage proceeds can be disbursed,
no Ginnie Mae MBS is delivered. The commenter stated concerns that
under HUD's proposed rule, in situations where mortgagor-provided funds
are not fully disbursed in the first installment that the first Ginnie
Mae guaranteed MBS delivery can be no more than 1 percent of the
mortgage, and no subsequent Ginnie Mae guaranteed MBS deliveries will
occur until borrower equity is exhausted. The commenter noted that it
is common in today's lending environment that borrower equity makes up
30 percent to 40 percent of the total sources of funds in a
construction loan. The commenter described that all of this means that
investors must price into the agreed interest rate the cost of waiting
7 to 14, or more, months for Ginnie Mae guaranteed MBS issuance in any
substantive amount. The commenter stated that this delay can increase
interest rates by approximately 10 to 50 basis points.
Another commenter specifically noted that for Midwestern and
smaller community projects, it can take up to a year before any insured
loan proceeds are disbursed in a meaningful amount because the amount
of required equity can be higher and take longer to exhaust. The
commenter noted that because of this, the increase in interest rates in
these communities can be anywhere between 0.15 and 0.40 percentage
points.
Commenters stated that their suggested changes represented a low
risk to HUD, and that their suggestions do not increase the risk beyond
the risk level already accepted under the proposed rule. A commenter
noted that FHA-approved lenders are required to hold all the
mortgagor's required funds in escrow and to hold the initial operating
deficit and working capital escrow fund either in cash or an
irrevocable letter of credit. Another commenter noted that if a HUD-
insured project defaulted during construction, HUD and the lender,
under HUD forms HUD-92441M (building-loan agreement) and HUD-94000M
(security instrument), have the right to use mortgagor-provided funds,
which are pledged collateral, to offset any losses or claims on
disbursed loan proceeds. The commenter provided the example of a $10
million project with 40 percent mortgagor-provided funds and 60 percent
mortgage-proceeds, which the commenter stated that the proposed rule
would allow for a $60,000 Ginnie Mae draw before the mortgagor began to
draw down equity. Under the commenter's suggestion, the cash equity
balance would stay higher for a longer period, meaning at the point
where $3 million had been drawn from Ginnie Mae, $2 million would
remain in cash equity as collateral.
A commenter noted that FHA lenders can model the projected interest
cost by preparing a draw schedule based on the projected draw down of
insured loan proceeds. The commenter noted an additional 10 percent
cushion could be added to the estimate to be reasonably confident there
is sufficient capitalized interest carried in the project's budget.
Commenters also stated that HUD has extensive experience with
proportional debt to equity construction loan disbursements through the
Low-Income Housing Credit (LIHTC) exception to HUD's full mortgagor-
provided funds disbursement requirement. Commenters stated that HUD has
allowed this LIHTC exception without increased risk to HUD and its
mortgage insurance fund. Commenters stated that allowing proportional
debt to equity disbursements for non-LIHTC projects, under their
suggested change, would be less risky because LIHTC equity and bridge
loan proceeds are not funded in full nor are they held by the lender
like the funds are in non-LIHTC construction projects to which this
proposed change would apply.
HUD Response: HUD disagrees that mortgage proceeds should be
disbursed to mortgagors in proportional debt to equity amounts. Through
this rulemaking, HUD's is maintaining the intent of the existing
regulation, which is that a borrower's equity should be invested ahead
of debt. With a borrower's equity at risk upfront, the owners are
properly incentivized to prudently manage and complete the project.
The regulation change made through this rulemaking is a technical,
limited modification to support the timely issuance of Ginnie Mae
guaranteed MBSs, while preserving the risk mitigation principle of
upfront equity investment. Under the existing 24 CFR 200.54(b), a
strict requirement that 100 percent of all borrower equity must be
disbursed can delay the initial issuance of a Ginnie Mae guaranteed MBS
and potentially disrupt the mortgage-banking liquidity cycle. HUD has
determined that 1 percent of the mortgage amount can be drawn before
borrower's equity is disbursed in full, without impairing a borrower's
incentive to protect its equity investment. HUD determined this, in
part, by its experience processing mortgages and observing mortgagee
performance while relying on the Partial Waiver of 24 CFR 200.54(b).
HUD should also allow disbursements of up to $25,000 per month in
mortgage proceeds.
A commenter suggested several technical edits to the proposed
regulatory text of 24 CFR 200.54(b)(2). The commenter suggested that
HUD allow the greater of 1 percent of the mortgagee funds or $25,000
monthly in mortgage proceeds. The commenter noted that drawdowns are
made monthly, and HUD's proposed rule appeared to only apply to the
initial draw.
HUD Response: HUD disagrees that the regulation should allow the
greater of 1 percent of the mortgagee funds or $25,000 monthly in
mortgage proceeds. In very infrequent cases, certain small loan balance
multifamily loans may not achieve the investors' preferred $25,000
minimum denomination under a 1 percent threshold; however, modifying
the regulation to optimize investor preferences for the infrequently
occurring nuances of small loan sizes is beyond the scope of this
regulation change.
HUD should adjust its permitted disbursement amount through Federal
Register notice.
A commenter suggested that HUD create a new 24 CFR 200.54(b)(3)
that allows HUD to adjust the permitted disbursement amount through the
publication of a notice in the Federal Register. The commenter stated
that the Federal Register notice should provide a 30 day public comment
period prior to the finalizing of the adjusted disbursement amount that
was announced in the suggested notice. The commenter believed that a 1
percent disbursement amount may not be enough and thought HUD might
decide to increase the percentage in the future. The commenter noted
that adjusting the permitted disbursement amount through a Federal
Register notice is similar to the strategy used for HUD's mortgage
insurance premium regulations.
[[Page 100742]]
HUD Response: HUD disagrees that 24 CFR 200.54(b) needs periodic
updates. Periodically adjusting the 1 percent threshold to a different
percentage through a Federal Register notice is unnecessary because HUD
has determined that it is sufficient to allow up to the 1 percent
threshold amount can be drawn before a borrower's equity is disbursed
in full without impairing borrower incentive to protect its equity
investment.
HUD's proposed rule goes too far by allowing even 1 percent of
mortgage proceeds to be disbursed before requiring the full
disbursement of mortgagor-provided funds.
A commenter disagreed with HUD's proposed rule by saying that HUD's
proposed rule goes too far by allowing even 1 percent of mortgagee
proceeds to be disbursed before requiring the full disbursement of
mortgagor-provided funds. The commenter stated that requiring full
disbursement of mortgagor-provided funds before mortgage proceeds is a
crucial risk mitigation measure to prevent financial mismanagement and
delays in projects. The commenter stated that HUD's proposed rule could
introduce instability into the MBS market because, as is currently
required, by first requiring the full disbursement of mortgagor-
provided funds ensures the financial soundness of the securities
issued. The commenter also suggested that HUD's proposed rule could
negatively impact small businesses by creating unpredictable financial
environments, which would cause business uncertainties and cash-flow
issues.
HUD Response: HUD disagrees that a 1 percent disbursement of
mortgage proceeds prior to full disbursement of mortgagor-provided
funds materially impairs the over-arching risk mitigation set forth by
HUD's regulations. HUD has determined that 1 percent of the mortgage
amount can be drawn before a borrower's equity is disbursed in full
without impairing borrower incentive to protect its equity investment.
HUD determined this, in part, by its experience processing mortgages
and observing mortgagee performance while relying on the Partial Waiver
of 24 CFR 200.54(b).
V. Findings and Certifications
Regulatory Review--Executive Orders 12866, 13563, and 14094
Pursuant to Executive Order 12866 (Regulatory Planning and Review),
a determination must be made whether a regulatory action is significant
and, therefore, subject to review by the Office of Management and
Budget (OMB) in accordance with the requirements of the Executive
Order. Executive Order 13563 (Improving Regulations and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The order also directs Executive agencies to analyze regulations that
are ``outmoded, ineffective, insufficient, or excessively burdensome,
and to modify, streamline, expand, or repeal them in accordance with
what has been learned.'' Executive Order 13563 further directs that,
where relevant, feasible, and consistent with regulatory objectives,
and to the extent permitted by law, agencies are to identify and
consider regulatory approaches that reduce burdens and maintain
flexibility and freedom of choice for the public. Executive Order 14094
(Modernizing Regulatory Review) amends section 3(f) of Executive Order
12866, among other things.
The only substantive regulatory change made through this rulemaking
is to permit mortgagees, where the funds provided by the mortgagor are
not fully disbursed with the initial advance of the insured mortgage
proceeds, to disburse up to 1 percent of the mortgage amount initially
endorsed for insurance before requiring that the funds provided by the
mortgagor be disbursed in full. This rulemaking was determined to not
be a ``significant regulatory action'' as defined in section 3(f) of
Executive Order 12866, as amended by Executive Order 14094, and is not
an economically significant regulatory action and therefore was not
subject to OMB review.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
The changes in this rulemaking are limited to permitting mortgagees,
where the funds provided by the mortgagor are not fully disbursed with
the initial advance of the insured mortgage proceeds, to disburse up to
1 percent of the mortgage amount initially endorsed for insurance
before requiring that the funds provided by the mortgagor be disbursed
in full. This change will not have a significant economic impact on a
substantial number of small entities. Accordingly, the undersigned
certifies that this final rule will not have a significant economic
impact on a substantial number of small entities.
Federalism (Executive Order 13132)
Executive Order 13132 (Federalism) prohibits an agency from
publishing any rule that has federalism implications if the rule either
imposes substantial direct compliance costs on State and local
governments and is not required by statute or preempts State law,
unless the agency meets the consultation and funding requirements of
section 6 of the Executive Order. This rulemaking does not have
federalism implications and does not impose substantial direct
compliance costs on State and local governments or preempt State law
within the meaning of the Executive Order.
Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to the
environment was made, at the proposed rule stage of this rulemaking, in
accordance with HUD regulations at 24 CFR part 50 that implement
section 102(2)(C) of the National Environmental Policy Act of 1969 (42
U.S.C. 4332(2)(C)). The FONSI remains applicable to this final rule and
is available through the Federal eRulemaking Portal at <a href="http://www.regulations.gov">http://www.regulations.gov</a>. The FONSI is also available for public inspection
during regular business hours in the Regulations Division, Office of
General Counsel, Department of Housing and Urban Development, 451 7th
Street SW, Room 10276, Washington, DC 20410-0500. Due to security
measures at the HUD Headquarters building, you must schedule an
appointment in advance to review the FONSI by calling the Regulations
Division at 202-708-3055 (this is not a toll-free number). HUD welcomes
and is prepared to receive calls from individuals who are deaf or hard
of hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for Federal agencies to
assess the effects of their regulatory actions on State, local, and
Tribal governments, and on the private sector. This rulemaking does not
impose any Federal mandates on any State, local, or Tribal governments,
or on the private sector, within the meaning of the UMRA.
[[Page 100743]]
List of Subjects in 24 CFR Part 200
Administrative practice and procedure, Claims, Equal employment
opportunity, Fair housing, Housing standards, Lead poisoning, Loan
programs--housing and community development, Mortgage insurance,
Organization and functions (Government agencies), Penalties, Reporting
and recordkeeping requirements, Social security, Unemployment
compensation, Wages.
For the reasons stated in the preamble, HUD amends 24 CFR part 200
as follows:
PART 200--INTRODUCTION TO FHA PROGRAMS
0
1. The authority citation for part 200 continues to read as follows:
Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).
0
2. In Sec. 200.54:
0
a. Amend paragraph (a) by removing the reference to ``paragraph (d)''
and adding, in its place, a reference to ``paragraph (c)'';
0
b. Amend paragraph (b) by removing the word ``mortgage'' and adding, in
its place the term, ``insured mortgage'';
0
c. Redesignate paragraph (c) as paragraph (b)(1);
0
d. Amend newly redesignated paragraph (b)(1) by removing the word
``mortgage'' and adding in its place the term, ``insured mortgage'' and
by adding the word ``or'' at the end of the paragraph;
0
e. Add paragraph (b)(2); and
0
f. Redesignate paragraph (d) as paragraph (c).
The addition reads as follows:
Sec. 200.54 Project completion funding.
* * * * *
(b) * * *
(2) If the mortgagor's deposit required by paragraph (a) of this
section is not fully disbursed with the initial advance of the insured
mortgage proceeds, the mortgagee may disburse up to one (1) percent of
the mortgage amount initially endorsed for insurance before requiring
that the funds provided by the mortgagor be disbursed in full. The 1
percent of the initially endorsed mortgage amount may be disbursed in
full at the time of initial endorsement or may be disbursed in any
amount on a monthly basis, whether consecutive or nonconsecutive, until
the funds provided by the mortgagor are fully disbursed.
* * * * *
Julia R. Gordon,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2024-29390 Filed 12-12-24; 8:45 am]
BILLING CODE 4210-67-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.