The

(a) Submission of certificates. mortgagor's certificate of actual cost, in a form prescribed by the Commissioner, shall be submitted prior to each insured advance.

(b) Items to be included. Each certificate shall show the actual cost to the mortgagor of items as follows:

(1) Development contract, where the mortgagor and the general contractor are separate entities.

(2) Construction of the improvements, where the mortgagor is the general contractor and there is no development contract.

(3) Architect's fee, engineer's fee, and land planning fees.

(4) Offsite public utilities and streets not included in computations under subparagraphs (1) and (2) of this paragraph.

(5) Organization and legal work. (6) Other items of expense approved by the Commissioner.

(c) Items not to be included. The certificate shall not include as actual cost any kickbacks, rebates, trade discounts, or other similar payments to the mortgagor, or to any of its officers, directors, stockholders, partners, or beneficiaries. Any such payments shall be deducted from the costs determined under paragraph (b) of this section.

(a) Such general overhead items as are acceptable to the Commissioner.

(b) A reasonable allowance for the general contractor's profit as established by the Commissioner.

[30 F.R. 15033, Dec. 4, 1965, as amended at 30 F.R. 16110, Dec. 28, 1965]

§ 1000.122 Certificate of actual costsubcontractor's cost.

(a) Submission of certificates. The Commissioner may require the mortgagor to submit a certificate of actual cost showing all amounts actually paid by a subcontractor, material supplier or equipment lessor, where it is determined by the Commissioner that an identity of interest exists between either of the following:

(1) The mortgagor or any of its officers, directors, stockholders, partners or beneficiaries and any subcontractor, material supplier, or equipment lessor.

(2) The general contractor and any subcontractor, material supplier, or equipment lessor.

(b) Items to be included. Each certificate shall show the amounts paid for labor, materials, subcontracts and overhead.

(c) Items not to be included. The certificate shall not include amounts paid for any kickbacks, rebates, trade discounts, or other similar payments to the general contractor, the mortgagor, or any of its officers, directors, stockholders, partners, or beneficiaries. § 1000.125 Contractor's certificationfixed fee contract.

A general contractor receiving a fixed fee shall certify, in form prescribed by the Commissioner, as to all actual costs paid for labor, materials, and subcontract work under the general contract. The fee of the general contractor, any kickbacks, rebates, trade discounts, or other similar payments to the general contractor or mortgagor corporation or any of its officers, directors, stockholders, partners or beneficiaries shall not be included in arriving at such actual costs. § 1000.127

Records.

The mortgagor shall keep and maintain adequate records of all costs of any development or other cost items not representing work under the general con

Any agreement, undertaking, statement, or certification required in connection with cost certification shall specifically state that it has been made, presented, and delivered for the purpose of influencing an official action of the Commissioner and may be relied upon as a true statement of the facts contained therein.

§ 1000.137 Cost certification incontestable.

Upon the Commissioner's approval of the certification by the mortgagor as to actual costs submitted in connection with the request for the final insured advance of mortgage proceeds, such certification shall be final and incontestable, except for fraud or material misrepresentation on the part of the mortgagor. This pro

In order for the mortgaged property to be eligible for insurance, the Commissioner shall determine that marketable title thereto is vested in the mortgagor as of the date the mortgage is filed for record. The title evidence shall be examined by the Commissioner and the original endorsement of the credit instrument for insurance shall be evidence of its acceptability.

§ 1000.142 Title evidence.

Upon insurance of the mortgage, the mortgagee shall furnish to the Commissioner a survey, satisfactory to him, and a policy of title insurance, as provided in paragraph (a) of this section. If, for reasons the Commissioner deems satisfactory, title insurance cannot be furnished under paragraph (a) of this section, the mortgagee shall furnish eviIdence of title in accordance with paragraph (b) or (c) of this section, as the Commissioner may require. Each time there is an insured advance, the title evidence shall be continued down to date of mortgagee's request for the insured advance with the proper amount of title insurance including coverage against any outstanding liens of mechanics or materialmen. Any survey, policy of title insurance, or other evidence of title required under this section shall be furnished, upon insurance of the mortgage or the advance, without expense to the Commissioner. The types of title evidence are:

(a) A title insurance policy, issued by a company and in a form satisfactory to the Commissioner. The policy shall name as the insureds the mortgagee and the Commissioiner as their respective interests may appear. The title policy shall provide that upon acquisition of title by the mortgagee or the Commissioner, it shall become an owner's policy running to the mortgagee or Commissioner, as the case may be.

(b) An abstract of title satisfactory to the Commissioner, prepared by an abstract company or individual engaged in the business of preparing abstracts of title, accompanied by a legal opinion

satisfactory to the Commissioner as to the quality of such title, signed by an attorney at law experienced in the examination of titles.

(c) Torrens or similar title certificate.

[30 F.R. 15033, Dec. 4, 1965, as amended at 30 F.R. 16110, Dec. 28, 1965]

AMENDMENTS AND EFFECTIVE DATE

§ 1000.145 Amendment of regulations.

The regulations in this subpart may be amended by the Commissioner at any time and from time to time, in whole or in part, but such amendment shall not adversely affect the interests of a mortgagee under the contract of insurance on any mortgage already insured or to be insured on which the Commissioner has made a commitment to insure. § 1000.147 Effective date.

Unless otherwise specified, provisions of this subpart shall be effective as to all mortgages with respect to which a commitment to insure is issued on or after August 10, 1965.

Subpart B-Contract Rights and
Obligations

§ 1000.253 Mortgage insurance premium.

(a) If the mortgage is for a term not in excess of 7 years, the mortgage insurance premium shall be computed and paid as follows:

(1) The mortgagee, upon initial endorsement of the mortgage note for insurance, shall pay to the Commissioner a mortgage insurance premium equal to 2 percent of the original face amount of the insured mortgage if the mortgage is for a term of 3 years or less. If the mortgage is for a term in excess of 3 years, an additional mortgage insurance premium equal to one-twelfth of 1 percent of the original face amount of the mortgage shall be collected at the time of initial endorsement, for each month, or fraction thereof, in excess of the 3-year term.

(2) In the event the original term of the mortgage is extended with the approval of the Commissioner, a mortgage insurance premium for the period of extension shall be due, and payable by the mortgagee, on the date the Commissioner approves such extension. This premium shall be equal to 1 percent of the unpaid principal balance of the mortgage outstanding on the date of the Commissioner's approval of such extension for each 12-month period or fraction thereof of the additional term of the mortgage granted by the extension.

(b) If the mortgage is for a term in excess of 7 years and is to cover water or sewerage systems, the mortgage insurance premium shall be computed and paid as follows:

(1) The mortgagee, upon initial endorsement of the mortgage note for insurance, shall pay to the Commissioner a mortgage insurance premium equal to one-twelfth of 1 percent of the original face amount of the insured mortgage for each month, or fraction thereof, prior to the date of commencement of amortization.

(2) Upon commencement of amortization and until the mortgage is paid in full, or until receipt by the Commissioner of an application for insurance benefits, or until the contract of insurance is otherwise terminated with the consent of the Commissioner, the mortgagee, on the date amortization commences and on