§ 120.394. What are the eligible uses of proceeds?
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/us/cfr/t13/s§ 120.394·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A Borrower must use the loan proceeds solely to acquire, construct or substantially rehabilitate an individual residential or commercial building for sale. "Substantial" means rehabilitation expenses of more than one-third of the purchase price or fair market value at the time of the application. A Borrower may use up to 33 percent of the proceeds to acquire land, and up to 5 percent for community improvements such as curbs and sidewalks. \[61 FR 3235, Jan. 31, 1996, as amended at 82 FR 39503, Aug. 21, 2017\]