§ 200.54. Project completion funding.
423 words·~2 min read·
/us/cfr/t24/s§ 200.54·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Except as provided in paragraph
(c)of this section, the mortgagor shall deposit with the mortgagee cash deemed by the Commissioner to be sufficient, when added to the proceeds of the insured mortgage, to assure completion of the project and to pay the initial service charge, carrying charges, and legal and organizational expenses incident to the construction of the project. The Commissioner may accept a lesser cash deposit or an alternative to a cash deposit in accordance with terms and conditions established by the Commissioner, where the required funding is to be provided by a grant or loan from a Federal, State, or local government agency or instrumentality.
(b)An agreement acceptable to the Commissioner shall require that funds provided by the mortgagor under requirements of this section must be disbursed in full for project work, material, and incidental charges and expenses before disbursement of any insured mortgage proceeds, except:
(1)Low-income housing tax credit syndication proceeds, historic tax-credit syndication proceeds, New Markets Tax Credits proceeds, or funds provided by a grant or loan from a Federal, State, or local governmental agency or instrumentality under requirements of this section need not be fully disbursed before the disbursement of insured mortgage proceeds, where approved by the Commissioner in accordance with terms, conditions, and standards established by the Commissioner; or
(2)If the mortgagor's deposit required by paragraph
(a)of this section is not fully disbursed with the initial advance of the insured mortgage proceeds, the mortgagee may disburse up to one
(1)percent of the mortgage amount initially endorsed for insurance before requiring that the funds provided by the mortgagor be disbursed in full. The 1 percent of the initially endorsed mortgage amount may be disbursed in full at the time of initial endorsement or may be disbursed in any amount on a monthly basis, whether consecutive or nonconsecutive, until the funds provided by the mortgagor are fully disbursed.
(c)In the case of a mortgage insured under any provision of this title executed in connection with the purchase, construction, rehabilitation, or refinancing of a multifamily tax credit project, the Commissioner may not require:
(1)The escrowing of equity provided by Low-Income Housing Tax Credits for the project pursuant to Title 26, section 42 of the Internal Revenue Code of 1986;
(2)The escrowing of equity provided by historic rehabilitation tax credits, New Markets Tax Credits, or any other form of security, such as a letter of credit. \[75 FR 51915, Aug. 23, 2010, as amended at 89 FR 100743, Dec. 13, 2024\]
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§ 200.54
Project completion funding.
Fed. Reg.×146
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