Form HUD-2741 Instructions for Applications for Insuance Benefits

Instructions for
Applications for Insurance Benefits
Multifamily Mortgages

U.S. Department of Housing
and Urban Development
Office of Housing
Federal Housing Commissioner

All conveyances of property and assignments of mortgages in
exchange for the benefits of HUD mortgage insurance should name,
as grantee, the “Secretary of Housing and Urban Development of
Washington, D.C., his or her successors and assigns”
After the assignment of the mortgage or the deed to the Secretary
has been filed for record, the items listed below are to be forwarded
promptly to:
U.S. Department of Housing and Urban Development
Office of Mortgage Insurance Accounting and Servicing
Attn: Multifamily Accounting and Servicing Division, HOMMI
Washington, D.C. 20410 - 8000

1. Statement of Taxes, form HUD-434, in triplicate together with
the tax bills for any unpaid taxes becoming delinquent more than 45
days from the filing for record of the assignment or deed. Taxes that
will become delinquent within the 45 day period should be paid by
the mortgagee and included in the claim for insurance benefits. The
amount of penalties paid on delinquent taxes will be disallowed.
The amount of penalties may be included in the Certificate of Claim
if it was necessary for the mortgagee to advance the funds to pay the
taxes. Copies of tax bills for the taxes last paid should be submitted
showing the check number and date of payment irrespective of
whether the tax was paid before or after default.
2. Photo-copy of the payment record card for title mortgage in
triplicate.
3. For multifamily assigned mortgage claims, all escrow deposits,
reserve for replacement funds, undisbursed mortgage proceeds, any
undisbursed balance under a letter of credit, and other monies held
by the mortgagee for the account of the mortgagor must be remitted
to HUD on the date the assignment is filed for record. The exception
to the foregoing is with respect to the following claims which will
be paid in cash unless the mortgagee requests debentures: sections
220, 221, and 233 endorsed on or after July 7, 1961; 235(j)(1); 236;
Section 241 loans made in connection with any of the foregoing and
endorsed on or after July 15, 1978; Title X mortgages endorsed on
or after March 1, 1980; and all multifamily mortgages endorsed
under another section of Titles II or XI pursuant to section 223(e);
all funds held are to be retained by the mortgagee and such amount
will be deducted from the cash settlement. The mortgagee will
retain net income from operation of the project and receipts from
any source after the date of default irrespective of whether the claim
is settled in debentures or cash.
4. For claims in connection with multifamily conveyances, all
funds are to be retained by the mortgagee, and the amount thereof
will be deducted from the debenture settlement.
Instructions for 221(g)(4)
Any hazard insurance premium which becomes due 45 days from
the date of assignment should be paid by the claimant. A receipted
invoice should be submitted to this office so that the payment may
be reflected in the insurance settlement.
Because HUD will be escrowing for hazard insurance premiums for
221(g)(4) cases, the following information will be needed:
• Copy of hazard insurance policy
• Name of hazard insurance carrier and a contact person with
phone number

OMB Approval No. 2502-0418 (exp. 08/31/2008)

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Copy of last paid hazard insurance invoice
Due date of next hazard insurance premium payment
Amount of hazard insurance escrow to be transferred to HUD
Date and amount of last payment to the hazard insurance
escrow account.
Immediately, following the date of assignment, the hazard insurance information listed above should be mailed to the following
address:
Data Prompt, Incorporated
Attention: Ron Foxhill
PO Box 4308
Silver Spring, MD 20904-3038

All escrow balances and all payments you receive after the date of
assignment must be made payable to HUD and forwarded to:
Multifamily Payment Processing Center
PO Box 70764
Chicago, IL 60673

A cover letter stating the amount of the check, nature of the payment
and the project number and name must be submitted with the
payment. At the same time, telefax to this office a copy of the cover
letter. The telefax number is (202) 619-8259.
Form HUD-2747, Mortgagee’s Application for Insurance Benefits (Multifamily Mortgages)
Form HUD-2747 must be executed and submitted in triplicate to the:
U.S. Department of Housing and Urban Development
Office of Mortgage Insurance Accounting and Servicing
Attn: Multifamily Accounting and Servicing Division, HOMMI
Washington, D.C. 20410 - 8000

in the following manner:
• For assignment of a mortgage, the form is to be submitted
within 30 days after the date of the notice of election to assign,
or promptly upon receipt of the form
• For conveyance of title, the form is to be submitted on the date
the instrument of conveyance is filed for record.
Form HUD-2537, Mortgagee’s Application for Partial Settlement
Form HUD-2537 is to be executed and submitted in triplicate
promptly upon receipt of the form. It is imperative that the form be
submitted well in advance of actual assignment or conveyance. On
the date the assignment or deed is filed for record a telegram must
be sent to:
U.S. Department of Housing and Urban Development
Office of Mortgage Insurance Accounting and Servicing
Attn: Multifamily Accounting and Servicing Division, HOMMI
Washington, D.C. 20410 - 8000
or a telefax sent to(202) 619-8259

advising the date that the assignment or deed was filed for record.
The following additional information must be included in the
telegram for assigned mortgages:

Page 1 of 7

ref. Handbook 4350.1

form HUD-2741 (3/91)

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Date of default
Unpaid principal balance
Monthly amount due for principal and interest, tax escrow, and
reserve for replacements
Date and amount of last taxes paid
Due date of next taxes payable
Escrow balance for taxes, MIP, and hazard insurance. This
information is essential to HUD in establishing a mortgage
payment record. Upon receipt of this telegram, a partial settlement (for cash settlements only) consisting of approximately
90% of the outstanding principal balance will be made on the
basis of the information provided on form HUD-2537 if the
mortgage has been finally endorsed for insurance. If the project
has not been completed, the amount of the partial settlement,
for cash settlements only, will depend upon the extent of
completion of the project but in no event will it exceed 70%. It
is of utmost importance that the instructions for this form be
followed carefully.
Commitment date
Initial endorsement date
Final endorsement date
Tax parcel number(s) for each type of taxes.

Method of Payment
Settlement may be made in cash, in debentures, or in a combination
of both as determined by the Secretary at the time of settlement. The
exception to the foregoing is with respect to the following claims
which will be paid in cash unless the mortgagee requests debentures; Sections 220, 221, and 233 endorsed on or after July 7, 1961;
235(j)(1), 236; Section 241 loans made in connection with any of
the foregoing and endorsed on or after July 15, 1978; Title X
mortgages endorsed on or after March 1, 1980; and all other
multifamily mortgages endorsed under another section of Titles II
or XI pursuant to Section 223(e). At present all other multifamily
claims are settled by issuance of debentures.
Where settlement is made by the issuance of debentures, the
debentures shall:
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be issued in the amount of the partial settlement or if in final
settlement, the net amount of the claim less the amount of the
partial settlement previously issued
be issued generally as of the date of default
be issued in multiples of $50 except that any difference not in
excess of $50 between the amount of insurance benefits to
which the mortgagee is entitled and the aggregate face amount
of the debentures issued shall be paid in cash
bear interest from the date of issue, payable semi-annually on
the first day of January and the first day of July of each year at
the rate in effect as of the date title commitment was issued or
as of the date of the initial endorsement of the mortgage,
whichever is the higher.

For claims under Section 221(g)(4), debentures bear interest from
the date of assignment at the rate in effect as of the date of
assignment.

Where the claims are to be paid in cash, the cash settlement will
include an interest allowance, at the same rate the debentures would
bear, computed from the date of default. The interest allowance will
be computed on the amount of the settlement, either partial or final,
as the case may be. The interest allowance will be computed to the
date of settlement by HUD if the mortgagee takes the required
actions within the time set forth in the HUD regulations, or within
such further times as may be granted in writing. However, if the
mortgagee fails to take the required actions within the time limits
set forth in the regulations, unless extended in writing, the interest
allowance will be computed to the final date within which the
particular action should have been taken under the pertinent section
of the HUD regulations.
Time Requirements
Assignment Multifamily Mortgages: The HUD regulations require the mortgagee to notify the Secretary of its election to assign
within 45 days following eligibility for insurance benefits. The
assignment is to be filed for record and the application for insurance
benefits submitted within 30 days after the election. Although the
assignment of the mortgage should be placed on record within 30
days after the election do not record the assignment or any other
instrument until authorized to do so by HUD’s Office of General
Counsel. The local data and legal requirements, presented in a form
satisfactory to the Secretary, are to be furnished within 45 days after
the assignment is filed for record. The fiscal data are to be submitted
to the Office of Multifamily Accounting and Servicing, and the legal
requirements are to be submitted to the Office of General Counsel.
Conveyed Multifamily Housing Projects: The HUD regulations
require the mortgagee to notify the Secretary of its election to
convey within 45 days following eligibility for insurance benefits.
After the mortgagee acquires title, either by foreclosure or deed, the
deed to the Secretary must be filed for record and the application for
insurance benefits submitted within 30 days following acquisition
of title. The fiscal data and legal requirements, presented in a form
satisfactory to the Secretary are to be furnished within 45 days after
the instrument of conveyance is filed for record. The fiscal data are
to be submitted to the Office of Multifamily Accounting and
Servicing and the legal requirements are to be submitted to the
Office of General Counsel.
Extension of the Time Requirements
Assigned Mortgages and Conveyed Projects: In any case where
the mortgagee, for any reason beyond its control, is unable to
comply with the above requirements, an extension of time must be
requested. If an extension is granted, and if necessary actions are
taken within such extended time, the interest allowance to be
included in the cash payment will be computed to the date of
settlement.
A request for an extension of time in which to make an election to
assign or convey, or in which to record the instruments of assignment or conveyance should be submitted to the Deputy Assistant
Secretary for Multifamily Housing Programs, Attention: Director,
Office of Multifamily Housing Management. A request for an
extension of time concerning submission of the fiscal data should
be submitted to the Office of Multifamily Accounting and Servicing, Attention: Multifamily Claims Section. A request for an
extension of time concerning submission of the legal requirements
should he submitted to the Office of General Counsel.

Page 2 of 7

ref. Handbook 4350.1

form HUD-2741 (3/91)

Form HUD-2742, Fiscal Data in Support of Claims for Insurance Benefits
The original and three copies of form HUD-2742, together with the
supporting schedules are to be submitted to:
U.S. Department of Housing and Urban Development
Office of Mortgage Insurance Accounting and Servicing
Attn: Multifamily Accounting and Servicing Division, HOMMI
Washington, D.C. 20410 - 8000.

The fiscal data should be submitted as promptly as possible, but not
later than 45 days after the recording of the assignment or of the
instrument of conveyance. It should not be submitted prior to
assignment or conveyance. If additional time is needed, a request
for an extension giving the reasons for delay should be submitted to
the Multifamily Accounting and Servicing Division. To correctly
prepare these forms, complete the schedules first; then transfer the
data to form HUD-2742. Schedules A, D and E must be completed
to support all claims. Use Schedules B and C only in those instances
where the mortgagee, either directly or through a servicer, has had
control of the project property and is therefore accountable for the
collection of rents and payments of operating expenses. Where a
receiver has operated the property pursuant to an order of the Court,
the mortgagee is not considered to be in control of the property
during the period of such receivership and Schedules B and C are not
required for that period. The mortgagee is required to furnish copies
of the receiver’s accounting which should include copies of the
following:
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Court Order appointing the Receiver
Receiver’s report or reports to the Court
Court order or orders approving the Receiver’s Accounting
Court order discharging the Receiver, fixing fees and cancelling the receiver’s bond.

Show the receiver’s net income in column 12 of Schedule A and
transfer it to item ‘g’ on form HUD-2742.
Date of Default
It is of utmost importance in the preparation of Schedule A, that the
correct date of default be determined. For those mortgages endorsed
pursuant to commitments issued on or after August 13, 1954, the
date of default for the purpose of settlement is the due date of the
defaulted payment as provided in Section 207.255 of the HUD
Regulations under the National Housing Act. With respect to
mortgages endorsed pursuant to commitments issued prior to August 13, 1954, the date of default for the purpose of settlement is
construed to be the expiration of the period of grace rather than the
due date of the defaulted payment. In either instance, however, the
date of default may be advanced by crediting all complete monthly
payments received prior to election (to assign the mortgage or to
convey the property) to the first unpaid installment in the order
specified in the mortgage: that is, to escrow deposits, interest and
principal, then to the Reserve for Replacements due concurrently
therewith and then to the succeeding required monthly payments in
the same order.
Any amounts received prior to election which do not cover a full
monthly installment and all amounts received after the election to
receive insurance benefits must be applied as a reduction of the
settlement in accordance with the HUD Regulations which provide
that any amounts received on account of the mortgage after the date

of default (as advanced) shall be deducted from settlement. Attention is called to the fact that this order of application applies
specifically and solely to determining the date of default for the
purpose of settlement. Accordingly, any debentures issued will be
dated as of the date of default as so determined, or the interest
adjustment will he computed from that date if the settlement is in
cash.
The following examples illustrate the method of computing the date
of default for mortgages endorsed pursuant to commitments issued
prior to August 13, 1954:
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The payment due June 1 was made on July 18, prior to election
to assign or convey. Assuming that this was the last payment
received, the date of default for the purpose of issuing debentures, or determining the interest adjustment for inclusion in a
cash settlement, would be August 1, by reason of failure to
make the payment due July l
The payment due June 1 was made on August 8, the payment
due July 1 was made on September 6, and the payment due
August 1 was made on October 10. No additional payments
were received from the mortgagor and claim for insurance
benefits was filed. Assuming that the foregoing payments were
received after the election to assign or convey, the date of
default would be July 1, since none of the payments could be
applied. The amounts received subsequent to July 1, therefore,
must be considered as receipts after the date of default and
applied in their entirety to the reduction of the debentures or
cash settlement. On the other hand if any of the above payments
were received prior to election they could be applied and the
date of default advanced accordingly.

Schedule A - Allocation of Mortgage Receipts and Disbursements (to be submitted in triplicate)
1. The period covered by this schedule must begin with the date
the claimant became the mortgagee. Transactions must be reported
in chronological order.
2. If the claimant was the mortgagee during the construction
period, show the dates of advances of mortgage proceeds in Column
(1), and the amounts of the advances in columns 2 and 9 in
parentheses. Interest collections during this period are to be shown
with the dates received in column 1 and the amounts received in
columns 2 and 8. In the event of a participation agreement, the full
amount of the advances made and/or interest collected must be
shown rather than the amount of the participant’s share.
3. If the mortgage was acquired by the claimant from another
mortgagee after the construction period, show the date acquired in
column 1 and show the unpaid principal balance in parentheses in
columns 2 and 9. Show any accrued interest purchased in parentheses in columns 2 and 8. If there is more than a few days lapse of time
between the date you acquired the mortgage and the date your
accounting begins, a full explanation must be given.
4. Escrow funds on deposit to the mortgagor’s credit at the date of
acquisition of the mortgage by the claimant are to be shown on the
line following the entry recording the acquisition of the mortgage.
Show in column 1 the date, in column 2 the total funds, in columns
4, 5, 6, 7 and 10 the amounts, if any, to the mortgagor’s credit for
each item. Amounts in column 7 must be identified in column 11.

Page 3 of 7

ref. Handbook 4350.1

form HUD-2741 (3/91)

5. All payments made by the mortgagor which are received prior
to the date of election to assign the mortgage or convey the property
are to be shown in columns 1 through 10 with the exception of
incomplete payments received after default.
6. Show the date of payment in column 1, the total amount
received on that date in column 2 and the date or dates due in column
3. If the payment is made to cover amounts due on different dates,
use a separate line, starting with column 3, for the amounts
applicable to each date. In columns 4 through 10 show how the total
amount received was applied. Attention is called to the fact that
columns 4 through 9 appear on this schedule in the order in which
the standard form of mortgage or other credit instrument requires
the amounts received to be applied.
7. In order to avoid the necessity of transcribing unnecessary
detail with respect to mortgage payments received more than two
years preceding the date of default, which are in the same amount
each month, and where the monthly allocation to the individual
escrow accounts for mortgage insurance premiums, taxes, and
hazard insurance premiums remains constant, it is permissible to
show a lump sum entry for all such like payments received consecutively. For example, if ten consecutive monthly payments were
received, each in the same amount and with exactly the same
allocations to escrow, show in column 2 “10 payments @
$_______________ ”, on the next line show in column 2 the total
of the ten payments and in column 3 show the inclusive dates the
payments were due, as for example, “1/1 - 10/1” and show in
columns 4, 5, 6, 8, 9 and 10 the total allocations for the ten monthly
installments.
It should be noted that disbursements for the period covered by
such lump sum allocation must be shown separately and in chronological order immediately following the lump sum entry for any
period. See item number 10 of these instructions for detailed
information on disbursements.
Since it is necessary that individual entries for each separate
payment be shown on Schedule A for all mortgage payments which
are received for the years prior to default, it will not be possible to
show lump sum allocations unless the mortgage has been held by the
claimant for more than two years. Copies of the payment record card
must be submitted showing in detail all transactions since the
claimant became the mortgagee.
8. The Reserve for Replacements Fund, column 10, is not required by the standard form of mortgage and this column is to be
used only if such a requirement is imposed by other agreements.
Please note the following special instructions:
(a) Where a Mortgage is Assigned to the Secretary: In the event
any or all of the funds accumulated in the reserve for replacements
account were invested in United States Government Bonds, limited
to U.S. Treasury Bonds, Notes and Bills in Bearer form, the
Multifamily Claims Section should be advised as soon as possible,
of the type and amount of such bonds; also the cost of the bonds
showing a breakdown of brokerage fees, accrued interest purchased
and any other costs. Such bonds, in Bearer form, must be delivered
on assignment of the mortgage as indicated below. If, however, the
bonds held in the reserve for replacements accounts are not in bearer
form, they should be redeemed and the proceeds therefrom be
retained in the fund. In this event, a statement is required showing

the date of redemption, amounts received and any other information
pertinent to the transaction. The receipt and disposition of all bond
interest income received prior to the date of default should be shown
in Column 10. On assignment of the mortgage, please forward
transferable bonds by registered mail to:
U.S. Department of Housing and Urban Development
Director, Office of Mortgage Insurance Accounting & Servicing
Multifamily Accounting and Servicing Division, HOMMI
Washington, D.C. 20410 - 8000
To Be Delivered to Addressee Only

For mortgages that have investments in the reserves for replacement
fund other than bearer bonds, the following must take place on the
day the assignment is filed for record:
1. U.S. Treasury book entry securities -- Complete the attached
form PD-5179, Treasurer Direct Security Transfer Form. The
information necessary to transfer the securities to HUD's account is
completed on the form for your convenience. When the form is
completed, send it to your Treasury Direct Servicing Officer, and
notify this office by telefax at least two (2) working days prior to the
date the actual transfer takes place. The notice to this office is to include
the project number and name, a complete description of the securities
and the CUSIP number. The telefax number is (202) 619-8259.
2. Other Investments, including Nontransferable Certificates of
Deposit (CD) -- Investments in the Fund are to be liquid, and
therefore, any penalties for early withdrawal of funds from nontransferable investments are to be absorbed by the mortgagee.
Transferable -- If other investments of the fund are transferable,
they should be transferred in the name of:
Federal Housing Administration
Washington, DC 20026-4804
A/C (project name and FHA number)

(b) Where a Property is Conveyed to the Secretary In the event
any or all of the funds accumulated in the reserve for replacements
account were invested in United States Government Bonds, the
value of the bonds as of the date of the foreclosure sale should be
determined and this amount entered in column 10. If the property
is being conveyed pursuant to a deed in lieu of foreclosure, the value
of the bonds should he determined as of the date the property is
deeded to the mortgagee, or, if by a direct conveyance to the
Secretary the date title passes to the Secretary should be used. The
receipt and disposition of all bond interest income received prior to
the date of default should also be shown in column 10.
9. Column 12 is to be used to record all amounts received which
cannot be applied to sums due under the mortgage. Any payment
received after default which is not complete with respect to escrows,
interest, principal and reserve for replacements must be reported in
column 12. All payments received after the date of election to
receive the insurance benefits must be reported here. Other amounts
to be shown in this column are returned premiums on cancelled
hazard insurance policies, interest received after default on investments of the reserve for replacements fund, refunds of deposits left
with utility companies, amounts received as proceeds of a receivership, etc. Enter dates received in column 1, the amounts in
columns 2 and 12 and identify the source of the funds in column 11.
Do Not show net rental income received during the period the
claimant operated the project, since Schedules B and C are provided
for developing this amount.

Page 4 of 7

ref. Handbook 4350.1

form HUD-2741 (3/91)

10. From time to time disbursements will have been made for
items for which the escrow funds in columns 4, 5, 6, 7, and 10 were
established. Show the date of disbursement in column 1 and the
amount disbursed in column 2 in parentheses, show the due date of
the item for which the disbursement was made in column 3 and show
the amount disbursed again in parentheses in the applicable columns (4, 5, 6, 7 or 10). This procedure permits the use of these
columns to develop either the balances to the mortgagor’s credit or
the advances by the mortgagee for the account of the mortgagor. All
amounts entered in column 7 are to be identified in column 11.
Disbursements in column 10 for any purpose other than investments
must be supported by letters of authorization from HUD authorizing
such disbursements. Hazard insurance premiums for policies with
the effective date after the date of assignment or conveyance should
not be paid.
11. After all entries have been made, sub-total columns 4 through
7. A deficit balance in any of these four columns may be offset by
a transfer from column having a credit balance. Report transfers by
showing “Transfer of Funds” in column 3.
12. The adjusted totals of the other columns should then be shown
in the space provided at the bottom of the page. This schedule, if
correctly and accurately prepared, is self-balancing. The net total of
column 2 should equal the totals of all the other amount columns.
13. Submit Receipts or Paid Bills to cover all disbursements
shown in columns 6 and 7 made subsequent to the date of default.
Evidence of payment of taxes, water and sewer charges, etc., to be
shown in column 5 should be by copies of the bills showing the
check numbers and dates of payment.
14. If you have not already done so, submit three copies of your
ledger record cards to support this schedule. If copies have previously been submitted and later entries have been made on the cards,
new copies are required. The ledger card should cover the period
front the date the claimant became the mortgagee to the date of
assignment or recordation of the deed to the Secretary.
Schedule B- Mortgagee’s Report of Project Collections
(to be submitted in triplicate)
15. This schedule is for use only if the mortgagee, either directly
or through its servicer or the mortgagor, has had control of the
project property and is therefore to account for the collection of
rents and payment of operating expenses which the project incurred
during that period.
It is to be used to report and to account for all rents collected by
the mortgagee or its servicer as well as to account for periods of
vacancies, and rents in arrears. Do not report security deposit
transactions on this schedule. Security deposits collected and
forfeited by the tenants during the period of the mortgagee’s
operation of the project should be reported as Other Income and
shown in column 7 of this schedule. See the last paragraph of
instruction number 21. Security deposits that are applied to rent are
to be included in the total collections report in column 7.
Any security deposits on hand at date of conveyance must be
accounted for separately and remitted to:
U.S. Department of Housing and Urban Development
Office of Mortgage Insurance Accounting and Servicing
Attn: Multifamily Accounting and Servicing Division, HOMMI
Washingtion, DC 20410 - 8000.

16. In column 1 show the unit number or the other symbol by which
the units are identified. All units, whether occupied or vacant, must
be listed and accounted for.
17. Column 2 is to be used to report the occupancy status of each
unit in the project during the entire period from the date the claimant
took over control to the date such control ended (the dates shown at
the top of the schedule).
Show the status of the unit at the date control was assumed by
inserting tenant’s name or the word “vacant” in column 2. If the
occupancy status changed, show on the next line under the same unit
number (which need not be repeated) the change in status whether
it was a change in tenants or a change from occupancy to vacancy
or vice versa and complete the other applicable columns. Repeat this
procedure for each change in order that the entire period is covered.
18. Column 3 is to be used to show the monthly rental rate. If the
rental rate was changed during the period covered by the schedule,
show the original rate in column 3 and the period during which that
rate was in effect in columns 4 and 6. Then show the new rate in
column 3 and the period during which it was in effect in column 4
and columns 5 or 6 whichever is applicable.
19 Show in column 4 the date a tenant’s rent started with respect
to total collections shown in column 7 or unpaid rent in column 8.
For example, if the mortgagee assumed control on March 16 and the
tenant’s rent had been previously paid through March 31 the date the
rent started would be April 1 (assuming of course that all rent is
current and the tenant is paying from the 1st). Using the example
above, if the tenant was paying rent on a 15th to the 15th of a month
basis, the date to be shown in column 4 would be March 15. If a tenant
was in arrears from December 1 when a mortgagee assumed control on
March 16, the date to be shown in column 4 would be December 1.
20. Show in column 6 the date through which the tenant’s rent was
paid by calculating rent at the rate or rates shown in column 3
against the total rent paid as shown in column 7.
21. In column 7 show the total rents collected from the tenant between
the beginning and ending dates shown at the top of the Schedule.
Do Not Prorate Rental Collections. For example, if the
property was conveyed to the Secretary on the 15th of a month, all
rents collected by you prior to the 15th, regardless of the period
covered by the amounts received, are to be retained by you and
accounted for on Schedule B. All rents paid on the date of conveyance and subsequent thereto should be paid to the rental broker for
HUD. If any rent refund was made to a tenant, enter the amount in
parenthesis in column 7 and explain in column 2.
Do Not Show Rent Refunds on Schedule C. There are some
instances where recurring items other than shelter rental are to be
included on Schedule B, such as furniture rental, flat charges for
utilities, garage rental, etc. All amounts received for such items
from each tenant should be shown in column 7 after all rental
collections have been listed for the tenant. A corresponding explanation should be shown in column 2. Miscellaneous collections not
applicable to a particular tenant should be shown at the end of the report.
22. Column 8 is to be used to report the amount of rents in arrears.
It should show an amount equal to the daily rental rate multiplied
by the number of days from the date shown in column 6 to the date
shown in column 5 for those tenants who vacated, and covering the
period from that shown in column 6 to the date the mortgagee
relinquished control for those tenants still in occupancy.

Page 5 of 7

ref. Handbook 4350.1

form HUD-2741 (3/91)

23. All balances due from present and former tenants are formally
assigned to the Secretary in compliance with instructions issued by
the Office of the General Counsel. Column 8 of Schedule B provides
the data as to the actual amounts due from tenants and covered by
that assignment. On the basis of the amounts shown in column 8, this
Administration will establish its records and will take steps to
collect amounts shown as due from tenants. It is, therefore, of
particular importance that the amounts be correctly shown.
After accounting for all units during your period of control, show
under heading Former Tenants all tenants owing rent who vacated
prior to your control of the property. If available, show tenant’s full
name, the unit number, any collections made and the balance still
due. If the tenant has given any evidence of the indebtedness such
as a note, this fact is to be noted in column 8 and that evidence should
be delivered to this Administration.
Schedule C - Mortgagee’s Report of Project Disbursements
(to be submitted in triplicate)
24. This schedule is provided for reporting, in chronological order,
disbursements for necessary project operating expenses incurred by
the mortgagee or its servicer during its control or ownership. Do
not include disbursements for which the former mortgagor is liable
unless it was necessary for the claimant to pay them. In this event,
provide full, detailed explanation as to the necessity for payment.
25. Column 1 is provided for convenience in either listing receipted invoices numbered consecutively or inserting the number of
the check in payment. The purpose of the disbursement should be
fully explained in column 3. The dates and amounts of all payments
must be shown. Please take care to pay all amounts chargeable to the
period of the claimant’s operation of the project, even though the
actual payment is made after the end of the period.
26. As the footnote on the schedule indicates, either the original or
duplicate paid invoices, or photo copies thereof, must be submitted
in support of all disbursement. Where receipts for wages are not
available, submit in detail the rate of pay, number of hours worked,
amount withheld for taxes, etc.
Schedule D - Other Disbursements by the Mortgagee
(to be submitted in triplicate)
27. List on this schedule all other disbursements relating to the
conveyance of the property, or preservation expenses, if any. Do not
include advances of mortgage proceeds or advances to escrow
accounts. Show dates of all payments in column 1 and all payees in
column 2. Disbursements made in connection with an assignment
of a mortgage are not to be shown.
28. Reasonable expenses approved by the local HUD office for the
completion and preservation of the property are allowable in
computing the amount of settlement. Enter such amounts in column
3 and explain the purpose in column 4. In columns 5, 6 and 7 list all
other disbursements made in connection with the conveyance of the
property which are to be included in the Certificate of Claim. These
will include attorney’s fees, foreclosure costs, title policy, surveys,
taxes on deeds, recording fees, special commissioner’s fees and
costs etc. Use column 4 to explain the purpose of disbursements shown
in columns 5 and 7. Cost incurred in connection with an assignment of
a mortgage cannot be included in the Certificate of Claim.
29. Paid invoices or photo copies thereof must be submitted to
support all disbursements shown on this schedule.

Schedule E - Mortgagee’s Report of Special Escrow
(to be submitted in triplicate)
30. This schedule is self-explanatory and should be submitted with
the other fiscal data forms. Where the mortgage is assigned and the
settlement is made by, the issuance of debentures any balances
shown should be remitted to HUD. Where the mortgage is assigned
and the settlement is made in cash, and in all cases where the
property is conveyed, any balances shown are to be retained by the
mortgagee and reported under Section 1(e)5 on form HUD-2742.
Form HUD-2742 - Fiscal Data in Support of Claim for Insurance
Benefits
31. After completion of the schedules, the data developed thereon
are to be transferred to form HUD-2742. The amounts to be
transferred will be obtained as follows:
Section I(a)

Total From Column 9 of Schedule A.

Section I(b)
(see
instruction
no. 11)

1. Total, if any, in parentheses in column 4 of Schedule A.

Section I(c)

Total in column 3 of Schedule D.

Section I(d)

Balance, if any, undisbursed mortgage proceeds.

Section I(e)
(see
instruction
no. 11)

l.

2. Total, if any, in parentheses in column 5 of Schedule A.
3. Total, if any, in parentheses in column 6 of Schedule A.

Balance, if any, on deposit from column 4 Schedule A.

2. Balance, if any, on deposit from column 5 Schedule A.
3. Balance, if any, on deposit from column 6 Schedule A.
4. Balance, if any, on deposit from column 10 Schedule A.
5. Balance, if any, on deposit from column 7 Schedule A,
plus any balances developed on Schedule E which
were not remitted.
In this space identify the items.

Section I(f)

1. Total of column 7 Schedule B.

Section I(g)

Total of column 12 of Schedule A.

2. Total of column 5 Schedule C.

Section 1(h) This item does not apply to conveyances. It does apply to
all assignments except assignments of Sections 221(d)(3)
and 221(h) below market interest rate mortgages and
assignments of Section 803 mortgages which were accepted for insurance subsequent to August 15, 1955. In
addition, under such terms and conditions as the Secretary
may approve, all or part of the 1% deduction may be waived
for assignments under other sections of the Act.

32. The amounts to be shown in Section II of form HUD-2742 will
be obtained as follows:
Section II(a)
Section II(b)
Section II(c)
Section II(d)

Total of column 5 of Schedule D.
Total of column 6 of Schedule D.
The same amount shown in item ‘h’ of Section I.
Total of column 7 of Schedule D.

33. Have the form properly certified

Warning: HUD will prosecute false claims and statements.
Conviction may result in criminal and/or civil penalties.
(18 U.S.C. 1001, 1010, 1012; 31 U.S.C. 3729, 3802)

Page 6 of 7

ref. Handbook 4350.1

form HUD-2741 (3/91)

Check List for Filing Claims for Insurance Benefits
Follow the detailed instructions to prepare your claim. This check list is to serve only as a guide for mortgagees to properly submit the
supporting data for a claim for insurance benefits. The Department of Housing and Urban Development is anxious to settle all claims as
soon as possible, and every effort is made to do so. You can help in the prompt settlement of your claim by being certain that all forms are
properly completed, and that the ledger records and all supporting receipts are furnished in a legible condition. If the submission is incomplete,
it will require correspondence and will result in a delay in the settlement. The following items, as applicable, should be forwarded.
Completed form HUD-2742, original and three copies, signed in the space provided.
Schedule A, in triplicate, detailing all mortgage transactions since the inception of the loan or the date of purchase from another
mortgagee. The schedule, as completed, should show the detail of the advances of mortgage proceeds, if disbursed by claimant, as well
as the disposition of interest income received on any securities held as part of the Reserve for Replacement Fund.
Show under column 12 of Schedule A (with respect to a conveyance) the full amount of return premium from canceled hazard insurance
policies.
Schedule B, in triplicate, covering rental income for all the units in the project, if it has been under the mortgagee’s control.
Schedule C, in triplicate, showing all disbursements made in connection with the operation of the project, if it has been under the
mortgagee’s control.
Receipts covering all disbursements made in connection with the operation of the project, as shown on Schedule C. If receipts for wages
paid are not available, submit a breakdown on the number of hours worked, rate of pay, and withholdings.
Schedule D, in triplicate, listing all legal costs and expenses relating to the conveyance of the property and all preservation expenses.
Receipts covering legal costs, attorney’s fees, etc., as shown on Schedule D, relating to the acquisition and conveyance of the property.
Schedule E, in triplicate, reflecting disposition of special escrows, letters of credit, and any mortgage insurance premium refunds.
Three photocopies of original ledger record, if not previously furnished, covering all mortgage transactions since the inception of the
loan or the date of purchase from another mortgagee. Be sure to include ledger records covering advances of mortgage proceeds and
interest accruals and collections, if disbursements were made by mortgagee or its servicer.
Receipts or other evidence of payment covering all disbursements on and after the date of default, as shown on Schedule A, for taxes,
hazard insurance premiums, water rates, etc.
Receipts or authorizations for all disbursements shown on Schedule E.
Copies of authorizations covering the release of all monies disbursed from the Reserve for Replacements Fund.
Any bonds, for assignments only, held as part of the Reserve for Replacements Fund except non-transferable securities.

Page 7 of 7

ref. Handbook 4350.1

form HUD-2741 (3/91)