§ 881.502. Term of contract.
369 words·~2 min read·
/us/cfr/t24/s§ 881.502·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Term (except for Manufactured Home Parks). The term of the Contract will be as follows:
(1)Where the estimated cost of the rehabilitation is less than 25 percent of the estimated value of the project after completion of the rehabilitation, the contract will be for a term of 20 years for any dwelling unit.
(2)Where the estimated cost of rehabilitation is 25 percent or more of the estimated value of the project after completion of rehabilitation, the contract may be for a term which:
(i)Will cover the longest term, but not less than 20 years, of a single credit instrument covering:
(A)The cost of rehabilitation, or
(B)The existing indebtedness, or
(C)The cost of rehabilitation and the refinancing of the existing indebtedness, or
(D)The cost of rehabilitation and the acquisition of the property; and
(ii)For assisted units in a project financed with the aid of a loan insured or co-insured by the Federal government or a loan made, guaranteed or intended for purchase by the Federal government, will be 20 years for any dwelling unit; or
(iii)For units in a project financed other than as described in paragraph (a)(2)(ii) of this section will not exceed 30 years for any dwelling unit except that this limit will be 40 years if
(A)the project is owned or financed by a loan or loan guarantee from a state or local agency,
(B)the project is intended for occupancy by non-elderly families and
(C)the project is located in an area designated by HUD as one requiring special financing assistance.
(b)Term for manufactured home parks. For manufactured home units or spaces in substantially rehabilitated manufactured home parks, the term of the Contract will be 20 years.
(c)Staged projects. If the project is completed in stages, the term of the Contract must relate separately to the units in each stage. The total Contract term for the units in all stages, beginning with the effective date of the Contract for the first stage, may not exceed the overall maximum term allowable for any one unit under this section, plus two years. \[48 FR 12707, Mar. 28, 1983, and 49 FR 17449, Apr. 24, 1984\]