Department of Housing and Urban Development July 10, 2013 – Federal Register Recent Federal Regulation Documents

Federal Housing Administration (FHA) Multifamily Mortgage Insurance; Capturing Excess Claim Proceeds
Document Number: 2013-16456
Type: Proposed Rule
Date: 2013-07-10
Agency: Department of Housing and Urban Development
This proposed rule would amend HUD's regulations covering the contract rights and obligations of mortgagees participating in FHA multifamily mortgage insurance programs, to address reimbursement to FHA of excess claim proceeds. When a mortgagee finances mortgages through the issuance and sale of bonds or through bond anticipation notes, the mortgagee uses the FHA insurance claim funds to pay off the remaining bond debts. At times, the amount paid by the FHA insurance claim is greater than the remaining bond debts. This proposed rule would require mortgagees to return to FHA the excess bond funds that remain after FHA's payment is used to satisfy the bonds. HUD requires similar payments of excess bond funds on obligations of public housing agencies and, thus, the proposed rule would provide consistency in the administration of HUD's bond financing programs.