24cfr203.9

[Code of Federal Regulations]

[Title 24, Volume 2]

[Revised as of April 1, 2003]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR203.9]

[Page 139]

TITLE 24--HOUSING AND URBAN DEVELOPMENT

CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PART 203--SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents

Subpart A--Eligibility Requirements and Underwriting Procedures

Sec. 203.9 Disclosure regarding interest due upon mortgage prepayment.

Each mortgagee with respect to a mortgage under this part shall at

or before closing with respect to any such mortgage, provide the

mortgagor with written notice in a form prescribed by the Commissioner

describing any requirements the mortgagor must fulfill upon prepayment

of the principal amount of the mortgage to prevent the accrual of any

interest on the principal amount after the date of such prepayment. This

paragraph shall apply to any mortgage executed after August 22, 1991.

[56 FR 18947, Apr. 24, 1991]

[Code of Federal Regulations]

[Title 24, Volume 2]

[Revised as of April 1, 2003]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR203.10]

[Page 139-140]

TITLE 24--HOUSING AND URBAN DEVELOPMENT

CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PART 203--SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents

Subpart A--Eligibility Requirements and Underwriting Procedures

Sec. 203.10 Informed consumer choice for prospective FHA mortgagors.

(a) Mortgagee to provide disclosure notice. A mortgagee must provide

a prospective FHA mortgagor with an informed consumer choice disclosure

notice if, in the mortgagees's judgment, the prospective FHA mortgagor

may qualify for similar conventional mortgage products offered by the

mortgagee. The mortgagee should base this judgment on the mortgagee's

initial assessment of the prospective FHA mortgagor's eligibility for a

conventional mortgage product. If a mortgagee is unsure about a

prospective FHA mortgagor's eligibility for a conventional mortgage

product, the mortgagee should provide the prospective FHA mortgagor with

an informed consumer choice disclosure notice.

(b) Informed consumer choice disclosure notice--(1) Contents of

notice. The informed consumer choice disclosure notice must:

(i) Provide a one page generic analysis comparing the mortgage costs

of an FHA-insured mortgage with the mortgage costs of similar

conventional mortgage products offered by the mortgagee that the

prospective FHA mortgagor may qualify for;

(ii) Provide information about when the requirement to pay FHA

mortgage insurance premiums terminates; and

(iii) Meet the requirements of section 203(b)(2) of the National

Housing Act (12 U.S.C. 1709(b)(2)).

(2) Format of disclosure notice. The informed consumer choice

disclosure notice must be provided in a format prescribed by the

Commissioner. HUD has prepared a model informed consumer choice

disclosure notice that represents this format and that meets the

requirements of section 203(b)(2) of the National Housing Act (12 U.S.C.

1709(b)(2)). The model informed consumer choice disclosure notice

contains the minimum elements of an informed consumer choice disclosure

notice. These elements must be included in a mortgagee's informed

consumer choice disclosure notice. A mortgagee, however, may include

additional elements in an informed consumer choice disclosure notice to

better reflect the mortgagee's products or to provide information that

the mortgagee believes is meaningful and helpful to the mortgagee's

customers.

(3) Availability of model disclosure notice. HUD's model informed

consumer choice disclosure notice is made available to FHA-approved

mortgagees through Mortgagee Letter and is available to the public

through the internet at HUD's web site at http://www.hud.gov or by

contacting: Home Mortgage Insurance Division, Office of Insured Single

Family Housing, U.S. Department of Housing and Urban Development, 451

Seventh Street, SW, Washington, DC 20410-8000; telephone (202) 708-2700

(this is not a toll-free number), or the nearest HUD Homeownership

Center (Atlanta, GA (888) 696-4687; Denver, CO (800) 543-9378;

Philadelphia, PA (800) 440-8647; or Santa Ana, CA (888) 827-5605).

Hearing-

[[Page 140]]

or speech-impaired individuals may access these numbers via TTY by

calling the toll-free Federal Information Relay Service at (800) 877-

8339.

(c) Timing. When required under paragraph (a) of this section, a

mortgagee must provide an informed consumer choice disclosure notice to

a prospective FHA mortgagor not later than three business days after the

mortgagee receives the prospective FHA mortgagor's application.

(d) Revision of notice. A mortgagee should revise its informed

consumer choice disclosure notice periodically to reflect prevailing

market conditions. To ensure that the informed consumer choice

disclosure notice reflects prevailing market conditions, a mortgagee

must revise its informed consumer choice disclosure notice at least once

annually.

(e) Applicability. This section applies to any application for

mortgage insurance authorized under section 203(b) of the National

Housing Act (12 U.S.C. 1709) that the mortgagee receives on or after

September 2, 1999.

(f) Definitions. As used in this section:

Application means the submission of financial information in

anticipation of a credit decision.

Conventional mortgage means conventional mortgage as used in section

305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C.

1454(a)(2)) or section 302(b)(2) of the Federal National Mortgage

Association Charter Act (12 U.S.C. 1717(b)(2)), as applicable.

Mortgagee means mortgagee as defined in Sec. 202.2 of this chapter.

Prospective FHA mortgagor means a person who submits an application

to a mortgagee to obtain mortgage insurance authorized under section

203(b) of the National Housing Act (12 U.S.C. 1709).

[64 FR 29765, June 2, 1999, as amended at 64 FR 34984, June 30, 1999]

[Code of Federal Regulations]

[Title 24, Volume 2]

[Revised as of April 1, 2003]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR203.12]

[Page 140]

TITLE 24--HOUSING AND URBAN DEVELOPMENT

CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PART 203--SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents

Subpart A--Eligibility Requirements and Underwriting Procedures

Sec. 203.12 Mortgage insurance on proposed or new construction.

(a) Applicability. This section applies to an application for

insurance of a mortgage on a one-to four-family dwelling, unless the

mortgage will be secured by a dwelling that:

(1) Was completed more than one year before the date of the

application for insurance or, under the Direct Endorsement Program, was

completed more than one year before the date of the appraisal; or

(2) Is being sold to a second or subsequent purchaser.

(b) Procedures. (1) Applications for insurance to which this section

applies will be processed in accordance with procedures prescribed by

the Secretary. These procedures may only provide for endorsement for

insurance of a mortgage covering a dwelling that is:

(i) Approved under the Direct Endorsement Program or the Lender

Insurance Program; or

(ii) Located in a subdivision approved by the Rural Housing Service.

(2) The mortgagee must submit a signed Builder's Certification of

Plans, Specifications and Site (Builder's Certification). The Builder's

Certification must be in a form prescribed by the Secretary and must

cover:

(i) Flood hazards;

(ii) Noise;

(iii) Explosive and flammable materials storage hazards;

(iv) Runway clear zones/clear zones;

(v) Toxic waste hazards;

(vi) Other foreseeable hazards or adverse conditions (i.e., rock

formations, unstable soils or slopes, high ground water levels,

inadequate surface drainage, springs, etc.) that may affect the health

and safety of the occupants or the structural soundness of the

improvements. The Builder's Certification must be provided to the

appraiser for reference before the performance of an appraisal on the

property.

(3) If a builder (or developer) intends to sell five or more

properties in a subdivision, an Affirmative Fair Housing Marketing Plan

(AFHMP) that meets the requirements of 24 CFR part 200, subpart M must

be submitted and approved by HUD no later than the date of the first

application for mortgage insurance in that subdivision. Thereafter,

applications for insurance on other properties sold by the same builder

(or developer) in the same subdivision may make reference to the

existing previously approved AFHMP.

[64 FR 56110, Oct. 15, 1999]

[[Page 141]]

[Code of Federal Regulations]

[Title 24, Volume 2]

[Revised as of April 1, 2003]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR203.14]

[Page 141]

TITLE 24--HOUSING AND URBAN DEVELOPMENT

CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PART 203--SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents

Subpart A--Eligibility Requirements and Underwriting Procedures

Sec. 203.14 Builders’ warranty.

Applications relating to proposed construction must be accompanied

by an agreement in form satisfactory to the Secretary, executed by the

seller or builder or such other person as the Secretary may require, and

agreeing that in the event of any sale or conveyance of the dwelling,

within a period of one year beginning with the date of initial

occupancy, the seller, builder, or such other person will at the time of

such sale or conveyance deliver to the purchaser or owner of such

property a warranty in form satisfactory to the Secretary warranting

that the dwelling is constructed in substantial conformity with the

plans and specifications (including amendments thereof or changes and

variations therein which have been approved in writing by the Secretary)

on which the Secretary has based on the valuation of the dwelling. Such

agreement must provide that upon the sale or conveyance of the dwelling

and delivery of the warranty, the seller, builder or such other person

will promptly furnish the Secretary with a conformed copy of the

warranty establishing by the purchaser's receipt thereon that the

original warranty has been delivered to the purchaser in accordance with

this section.

[57 FR 58346, Dec. 9, 1992]

[Code of Federal Regulations]

[Title 24, Volume 2]

[Revised as of April 1, 2003]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR203.15]

[Page 141]

TITLE 24--HOUSING AND URBAN DEVELOPMENT

CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PART 203--SINGLE FAMILY MORTGAGE INSURANCE--Table of Contents

Subpart A--Eligibility Requirements and Underwriting Procedures

Sec. 203.15 Certification of appraisal amount.

An application with respect to insurance of mortgages must be

accompanied by an agreement satisfactory to the Commissioner, executed

by the seller, builder or such other person as may be required by the

Commissioner, whereby the person agrees that before any sale of the

dwelling, the person will deliver to the purchaser of the property a

written statement, in a form satisfactory to the Commissioner, setting

forth the amount of the appraised value of the property as determined by

the Commissioner.

[58 FR 41001, July 30, 1993]