24 Cfr 200.95

[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: 24CFR200.95]

[Page 21-22]

TITLE 24--HOUSING AND URBAN DEVELOPMENT

CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING

COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

PART 200--INTRODUCTION TO FHA PROGRAMS--Table of Contents

Subpart A--Requirements for Application, Commitment, and Endorsement

Generally Applicable to Multifamily and Health Care Facility Mortgage

Insurance Programs; and Continuing Eligibility Requirements for Existing

Projects

Sec. 200.95 Certification of cost requirements.

(a) Before initial endorsement of the mortgage for insurance, the

mortgagor, the mortgagee, and the Commissioner shall enter into an

agreement in form and content satisfactory to the Commissioner for the

purpose of precluding any excess of mortgage proceeds over statutory

limitations. Under this agreement, the mortgagor shall disclose its

relationship with the builder, including any collateral agreement, and

shall agree:

(1) To enter into a construction contract, the terms of which shall

depend on whether or not there exists an identity of interest between

the mortgagor and the builder.

[[Page 22]]

(2) To execute a Certificate of Actual Costs, upon completion of all

physical improvements on the mortgaged property.

(3) To apply in reduction of the outstanding balance of the

principal of the mortgage any excess of mortgage proceeds over statutory

limitations based on actual cost.

(b) The provisions of paragraph (a) of this section relating to

disclosure and the requirement for a construction contract shall not

apply where the mortgagor is the general contractor.