tion of the items included in insurance benefits for conveyed properties, except that in lieu of the allowance in paragraph (f) of § 203.402 of this chapter for foreclosure costs or for the costs of acquiring the property otherwise, there shall be included on account of such costs, in those cases involving mortgages on which the unpaid principal obligation at the time of the institution of foreclosure exceeds 80 percent of the appraised value of the property as of the date the mortgage was accepted for insurance, an amount not in excess of the greater of the following:

(a) Two percent of the unpaid principal of the mortgage as of the date of the institution of foreclosure proceedings, but not in excess of $75; or

(b) Two-thirds of the foreclosure costs or the costs of acquiring the property otherwise.

§ 903.295 Debenture interest rate.

Debentures shall bear interest from the date of issue, payable semiannually on the first day of January and the first day of July of each year at the rate of 22 percent per annum in the case of mortgages endorsed for insurance prior to July 8, 1953, and at the rate of 234 percent per annum in the case of mortgages endorsed for insurance on or after July 8, 1953 and pursuant to commitments issued prior to May 29, 1954, and at the rate of 22 percent per annum in the case of mortgages endorsed for insurance after May 29, 1954, and pur

§ 903.300 Maturity of debentures. Debentures shall mature as follows:

(a) Where the mortgage was insured pursuant to a commitment issued prior to August 9, 1954, the debentures shall mature 10 years after the date of issue of such debentures.

(b) Where the mortgage was insured pursuant to a commitment issued on or after August 9, 1954, the debentures shall mature 20 years after the date of issue of such debentures.

§ 903.305 Applicability to outstanding mortgages and commitments.

The regulations in this part are effective as to all mortgages on which a commitment to insure is issued to an approved mortgagee on or after August 11, 1954.

As used in this subpart, the following terms shall have the meaning indicated: (a) "Act" means the National Housing Act.

(b) "Administrator" means the Housing and Home Finance Administrator or his authorized representatives.

(c) "Commissioner" means the Federal Housing Commissioner or his authorized representatives.

(d) "Improvements" mean water lines and water supply installations, sewer lines and sewage disposal installations, roads, streets, curbs, gutters, sidewalks, storm drainage facilities, and other installations or work, whether on or off the site of the mortgaged property, which the Commissioner deems necessary or desirable to prepare land primarily for residential and related uses or to provide facilities for public or common use. These public or common facilities shall include only such buildings as are needed in connection with water supply or sewage disposal installations and such buildings, other than schools, as the Commissioner considers appropriate, which are to be owned and maintained jointly by the property owners.

(e) "Insured mortgage" means a mortgage insured by the endorsement of the credit instrument by the Commissioner.

(f) "Land development" means the process of making, installing, or constructing improvements.

a

(g) "Local public body" means county, city, or other political subdivision within which a land development project or part of such project is established, and any other political subdivision, public agency, or instrumentality of one or more States, counties, or political subdivisions empowered under law to take or withhold any action required in connection with the establishment of such project.

(h) "Maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with the payments provided for in the mortgage.

(i) "Mortgage" means such a first lien upon real estate and other property as is commonly given to secure advances on, or the unpaid purchase price of, real

estate under the laws of the State, district or territory in which the real estate is located, together with the credit instrument or instruments, if any, secured thereby.

(j) "Mortgagee" means the original lender under a mortgage, and its successors and assigns, and includes the holders of credit instruments issued under a trust indenture, mortgage or deed of trust pursuant to which such holders act by and through a trustee therein named.

(k) "Mortgagor" means the original borrower under a mortgage and its successors and assigns.

(1) "Project" means the land development and improvements which meet the land development criteria established by the Commissioner and which are to be paid for in part with proceeds of an insured mortgage or mortgages.

(m) "State" includes the several States, Puerto Rico, the District of Columbia, Guam, and the Virgin Islands. PRELIMINARY EXAMINATION AND

APPLICATION

§ 1000.5 Preliminary examination.

Prior to the filing of an application, the sponsor of a land development project shall request and be given an analysis of the proposed project. No fee shall be charged for the analysis.

§ 1000.7 Filing of application.

An application for insurance of a mortgage on a project shall be submitted by an approved mortgagee and by the sponsors of such project through the local FHA office on an approved FHA form. No application shall be considered unless the information, documents, and exhibits required by the application are furnished, and the application fee paid.

§ 1000.17 Fees on increases.

(a) Increase in commitment prior to endorsement—(1) Additional application fee. Upon an application, filed prior to initial endorsement (or prior to endorsement in a case involving insurance upon completion), for an increase in the amount of an outstanding commitment, an additional application fee of $1.50 per thousand dollars computed upon the amount of the increase requested shall accompany the application.

(2) Additional commitment fee. Any increase in the amount of a commitment shall be subject to payment of an additional commitment fee which, when added to the additional application fee, will aggregate $4.50 per thousand dollars of the amount of the increase. The additional commitment fee shall be paid within 30 days after the date of the issuance of the amended commitment. If the additional commitment fee is not paid within 30 days, the commitment for the increased amount shall expire and the previous commitment shall be reinstated.

(b) Increase in mortgage between initial and final endorsement-(1) Additional application fee. Upon an application, filed between initial and final endorsement, for an increase in the amount of the mortgage, either by amendment, by substitution of a new mortgage or by the addition of a separate mortgage or mortgages, an additional application fee of $1.50 per thousand dollars computed on the amount of the increase requested shall accompany the application.

(2) Additional commitment fee. The approval of any increase in the amount of the mortgage shall be subject to payment of an additional commitment fee which, when added to the additional application fee, will aggregate $4.50 per thousand dollars of the amount of the increase granted.

§ 1000.20 Transfer fee.

Upon application for approval of a case involving the transfer of physical assets or involving the substitution of mortgagor, a transfer fee of 50 cents per thousand dollars shall be paid on the original face amount of the mortgage. § 1000.22 Refund of fees.

If an application is rejected before it is assigned for processing, or in such

other instances as the Commissioner may determine, the entire application fee or any portion thereof may be returned to the applicant. Commitment and reopening fees may be refunded, in whole or in part, if it is determined by the Commissioner that there is a lack of need for the project or that the development or financing of the project has been prevented because of condemnation proceedings or other type of legal action taken by a governmental body or public agency, or in such other instances as the Commissioner may determine. A transfer fee may be refunded only in such instances as the Commissioner may determine.

§ 1000.25 Maximum charges by mortgagee.

The mortgagee may collect from the mortgagor the amount of the fees provided for in this subpart and may charge the mortgagor an initial service charge in an amount not to exceed 12 percent of the original principal amount of the mortgage. Any additional charges shall be subject to prior approval of the Commissioner.

ELIGIBLE MORTGAGORS

§ 1000.30 Eligible mortgagors.

(a) General requirements. In order to be eligible as a mortgagor under this subpart, the applicant must be a mortgagor approved by the Commissioner, which is regulated or restricted by the Commissioner as to capital structure, use of property and methods of operation. A public body shall not be eligible for approval as a mortgagor. The regulation or restriction of the mortgagor shall continue until the termination of all obligaticns of the Commissioner under the insurance contract and during such further period of time as the Commissioner shall be the owner, holder, or reinsurer of the mortgage. The regulation or restriction may be in the form of a regulatory agreement, corporate charter or such other means as the Commissioner may approve.

(b) Special requirements-water or sewer systems. The owner of a privately or cooperatively owned water or sewer system may be approved as a mortgagor.

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