4350.1 REV-1

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CHAPTER 22. PREPAYMENTS AND VOLUNTARY TERMINATIONS

SECTION 1. INTRODUCTION

22-1. General

A contract of mortgage insurance may be terminated

either by prepayment in full of the insured project

mortgage or by acceptance of a request for voluntary

termination made jointly by the mortgagor and

mortgagee. This Chapter provides guidance and

procedures when a request for termination by prepayment

in full or by voluntary termination is made. The

Chapter does not address partial prepayments of the

mortgage.

Projects covered by this chapter may or may not be

insured under a program which restricts prepayment in

full of the mortgage. When asked to do so by

Headquarters, Field Office Asset Management/Loan

Management and Legal staff are to review the Note and

Mortgage to verify whether prepayment in full is

restricted.

22-2. Applicability

A. This chapter does not apply to those projects covered

by Title II of the Housing and Community Development

Act of 1987 and Title VI of the Cranston-Gonzalez

National Affordable Housing Act of 1990 or various

other projects as shown below where the mortgage is:

1\. Insured or HUD-held under the Section 221(d)(3)

Market Rate Program, if the project receives Rent

Supplement or project-based Section 8 assistance;

or

2\. Insured or HUD-held under the Section 221(d)(3)

Below Market Interest Rate (BMIR) program; or

3\. Insured, assisted, or HUD-held under the Section

236 Program; or

4\. A Purchase Money Mortgage originated by HUD with

respect to a project which, prior to HUD\'s

acquisition, was insured under one of the programs

referred to in 1, 2, or 3 above.

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22-1 9/92

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4350.1 REV-1

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HUD Field Offices, mortgagees, and mortgagors are to

follow instructions issued by the Office of

Multifamily Housing Preservation and Property

Disposition for any project that falls into one of

the four categories above.

B. This Chapter does apply to HUD-insured and HUD-held

multifamily projects with moderate prepayment

restrictions and no prepayment restrictions as

follows:

1\. There are mortgage insurance programs that

generally have moderate prepayment

restrictions.

a\. Section 207/223(f), Purchase/Refinancing

of Existing Multifamily Projects (NOTE:

This category applies to mortgages where a

commitment was issued after October 8,

1980; where a commitment was issued prior

to October 8, 1980, the regulations in

place at the time of commitment should be

referred to in order to determine if a

prepayment prohibition exists.)

b\. Section 221(d)(3) Market Rate with

non-profit mortgagors and with no Rent

Supplement or Section 8 Assistance

c\. Section 231, Housing for the Elderly with

Nonprofit Mortgagors (Public and Private)

d\. Section 232, Nursing Homes and

Intermediate Care Facilities with

Nonprofit Mortgagors

e\. Section 242, Hospitals with Nonprofit

Mortgagors (NOTE: This is only applicable

to mortgages for which the commitment for

insurance was issued prior to June 16,

1988, the effective date of the amended 24

CFR 242.51.)

f\. Title XI - Mortgage Insurance for Group

Practice Facilities

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9/92 22-2

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4350.1 REV-1

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2\. There are programs that generally have no

mortgage prepayment restrictions,

a\. Section 207, Multifamily Rental Housing

b\. Section 213, Cooperatives

c\. Section 220, Urban Renewal

d\. Section 221(d)(3), Market Rate with

Limited Dividend Mortgagors and without

Rent Supplement or project-based Section 8

e\. Section 221(d)(4), Market Rate, Moderate

Income Families

f\. Section 231, Elderly Housing with

Profit-motivated Mortgagors

g\. Section 232, Nursing Homes and

Intermediate Care Facilities with

Profit-motivated mortgagors

h\. Section 234, Condominiums

i\. Section 241, Supplemental Mortgages

j\. Section 242, Hospitals with any profit

motivated mortgagors and all nonprofit

mortgagors with mortgages for which an

insurance commitment was issued on/after

June 16, 1988

k\. Section 608, Veteran Housing

l\. Title X, Land Development

C. There is one program that may have strict, moderate,

or no mortgage Prepayment restrictions: Section

207/223(c), \"Formerly HUD-owned Projects.\" These

are projects that were owned by HUD at some point in

time and subsequently sold. When these projects

were sold by HUD, HUD often provided financing with

a Purchase Money Mortgage, or a \"PMM.\" When a

Purchase Money Mortgage is placed on a project upon

its sale to a new owner, HUD itself is the mortgagee

and the new Purchase Money Mortgage is initially

HUD-held. Some of these Purchase Money Mortgages

continue to be HUD-held; others may have been sold

by HUD, with mortgage insurance, to investing

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22-3 9/92

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4350.1 REV-1

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mortgagees. Projects with PMMs commonly retain the

prepayment restrictions that were characteristic of

the project when it was originally processed for

mortgage insurance.

1\. For example, if a project was originally

processed and built as a non-profit Section 236

project, was acquired by HUD, was sold by HUD

and financed by HUD with a Purchase Money

Mortgage, the new Purchase Money Mortgage

normally could not be prepaid. The project in

this example is of the type cited in paragraph

22.A.4. of this Chapter and prepayment of its

mortgage is not covered by this Chapter.

2\. For another example, if a project was

originally processed and built as a profit-motivated

project under Section 221(d)(4), was

acquired by HUD, was sold by HUD and financed

by HUD with a PMM, the new PMM would normally

not contain prepayment restrictions.

Prepayment of the mortgage in this example is

covered by this Chapter.

When requests for prepayment of a PMM Note or for

voluntary termination of mortgage insurance are

received by either the HUD Field Office or by HUD

Headquarters, the controlling instruments (Note,

mortgage, and Regulatory Agreement) and any

corollary documents such as a Use Agreement must be

examined in each instance to determine whether or

not prepayment restrictions exist. Once this

determination has been made, the

prepayment/voluntary termination request will be

acted upon according to the procedures described in

this Chapter 22.

22-3. Glossary

Partial Prepayment - Payment in part of the principal

amount of the mortgage note in advance of the

established amortization schedule. (Partial

prepayments which are the result of a partial release

of the mortgage security are discussed in detail in

Chapter 16, Partial Release of Security.)

Prepayment in Full - Payment in whole of the principal

amount of the mortgage note in advance of expiration of

the term of the mortgage note.

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9/92 22-4

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4350.1 REV-1

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Voluntary Termination - The cancellation of HUD

mortgage insurance made at the joint request of the

mortgagee and the mortgagor and with HUD approval.

SECTION 2. REQUESTS FOR TERMINATION OF MORTGAGE INSURANCE

22-4. If the mortgage is insured, the mortgagor will first

notify the mortgagee, consistent with the terms and

conditions of the mortgage insurance, that the

mortgagor wishes to prepay the mortgage in full or seek

voluntary termination of the insurance. If the

mortgage is HUD-held, the mortgagor should direct its

notification to the appropriate HUD Field Office. The

loan documents include time frames for mortgagor

notification to the mortgagee (generally, at least 30

days) and any additional charges to be assessed by the

mortgagee if the mortgagor chooses to prepay

(established by the mortgagee).

22-5. If the mortgagee determines that the mortgagor\'s

request meets loan requirements and agrees to the

mortgagor\'s request, the mortgagee must prepare Form

HUD-9807, \"Request for Termination of Multifamily

Mortgage Insurance,\" (Appendix 1) based on the

following guidelines:

A. If the mortgage loan and insurance contain no

prepayment restrictions, the mortgagee:

1\. Prepares the form and required attachments;

2\. Obtains the mortgagor\'s signature on the form

in cases of voluntary termination; and

3\. Sends the documents to HUD Headquarters at

the address indicated on the front of the

Form.

B. If the mortgage insurance does contain prepayment

restrictions, prior approval from HUD is required

before the form may be prepared. (See Section 3

below.)

SECTION 3. TERMINATION BY PREPAYMENT IN PULL OR VOLUNTARY

TERMINATION OF MORTGAGE INSURANCE WITH PREPAYMENT

RESTRICTIONS

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22-5 9/92

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4350.1 REV-1

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22-6. When prepayment restrictions exist, the mortgagee must

request HUD approval of the proposed prepayment in full

prior to completion of Form HUD-9807. Programs

described in paragraph 22-2.B.1. are covered by this

Section. For projects described in paragraph 22-2.B.1.

(moderate prepayment prohibitions), the mortgagor\'s

signed narrative request must be submitted by the

mortgagee to the appropriate address on the back side

of the Form. Program-specific guidance is provided

below.

22-7. Some projects insured under Sections 231, 232, 242, and

Title XI are described in paragraph 22-2.B.1. as having

moderate prepayment restrictions. For these projects

with insured mortgages, the mortgagee should send the

mortgagor\'s signed request for prepayment/voluntary

termination to the Headquarters Office of Multifamily

Housing Management which will normally forward it to

the HUD Field Office for review. Mortgagors with a

HUD-held mortgage in this category should send their

written requests directly to the HUD Field Office. The

Asset management/Loan Management Branch Chief will

review each request. Under normal circumstances the

Branch Chief may issue approval of prepayment or

voluntary termination by sending a letter of

authorization to the mortgagee, with a copy of the

letter to the mortgagor, the HUD Regional Office, the

Office of Multifamily Housing Management, and the

Office of Mortgage Insurance Accounting and Servicing

(MIAS) in HUD Headquarters. If there are matters

indicating that approval should not be granted, the

Field Office Housing Management Division Director

should forward a memorandum through the HUD Regional

office to the office of Multifamily Housing Management

outlining the issues and making a recommendation about

conditionally permitting or prohibiting prepayment or

voluntary termination. HUD Headquarters will issue the

decision letters in these cases, which are expected to

be relatively rare. If the mortgage is HUD-held, the

above procedures should be followed except that actions

involving the mortgagee are omitted.

22-8. Section 207/223(f) Insurance Program. For all

insurance commitments made under this program after

October 8, 1980, HUD may not approve prepayment for

five years following final endorsement of the mortgage

insurance unless one of the following conditions

exists:

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9/92 22-6

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4350.1 REV-1

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A. The mortgagor has agreed to maintain the property

as rental housing for the remainder of the five

year period. To obtain HUD approval for

prepayment for this condition, the mortgagor must

submit a letter stating the reasons for the

request and must provide HUD three completed,

executed, and notarized copies of the Rental Use

Agreement which has been authorized by the HUD

Office of General Counsel. This Rental Use

Agreement is contained in Appendix 2 of this

Chapter.

B. The project is being converted to a condominium or

cooperative and the conversion is sponsored by a

tenant organization that represents a majority of

the tenants.

C. HUD has determined that there is an adequate

supply of low and moderate income housing in the

community without this project. The Field Office

Asset Management/Loan Management Branch Chief

should obtain the assistance of its Economic and

Market Analysis Division in making this decision.

D. HUD has determined that continuing the property as

rental housing would have an undesirable and

deleterious effect on the neighborhood.

22-9. For those projects with moderate prepayment

restrictions, after the mortgagor\'s request is received

by the Office of Multifamily Housing Management in

Headquarters, that Office will normally contact the

appropriate HUD Field and Regional Offices for

additional comments. When these comments, and the

Rental Use Agreements (if the latter are applicable),

have been received by Headquarters they will be

reviewed and a decision will be issued whether to

permit prepayment. If the Use Agreements are

contemplated, they will be executed and then returned

to the Field Office for recording and distribution.

22-10. After the mortgagee receives a letter from either the

HUD Field Office or from HUD Headquarters authorizing

prepayment of the Note or voluntary termination of

mortgage insurance, the mortgagee should complete

preparation of the Form HUD-9807 by signing the Form

and obtaining the mortgagor\'s signature on the Form.

The mortgagee should then send the Form HUD-9807

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22-7 9/92

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4350.1 REV-1

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together with HUD\'s letter authorizing the

prepayment/voluntary termination to the address on the

front of the Form.

22-11. Prepayment Penalties and Lockout Provisions. Reference

is made to Mortgagee Letter 87-4 dated January 12,

1987, and Mortgagee Letter 87-9 dated February 20,

1987\. Some mortgages may contain lock-out provisions

and prepayment penalties. Where this is permitted,

language similar to the following should be contained

in the Mortgage Note:

\"Notwithstanding any prepayment prohibition imposed

and/or penalty required by this Note with respect to

prepayments made prior to \_\_\_\_\_\_\_\_\_\_\_\_\_, 19\_\_\_\_, enter

first date on which prepayments may be made with a

penalty of one percent or less the indebtedness may be

prepaid in part or in full without the consent of the

mortgagee and without prepayment penalty if HUD

determines that prepayment will avoid a mortgage

insurance claim and is therefore in the best interest

of the Federal Government.\"

Where these restrictions exist and the mortgagee does not

waive its optional prepayment or lockout penalty

provisions, HUD would consider exercising an override of a

mortgagee\'s prepayment lock-out or penalty provision only

if all four of the following conditions are met:

a\. The project mortgagor has defaulted and HUD has

received notice of such default as required by 24 CFR

Section 207.256 (full insurance cases) or Section

251.810, 252.810, or 255.808 (co-insurance cases).

b\. HUD determines that the project has been experiencing a

net income deficiency that was not caused solely by

management inadequacy or lack of owner interest and

that is of such a magnitude that the mortgagor is

currently unable to make required debt service

payments, pay all project operating expenses, and fund

all required reserves.

c\. HUD finds there is a reasonable likelihood that the

mortgagor can arrange to refinance the defaulted loan

at a lower interest rate or otherwise reduce the debt

service payments through partial prepayment.

d\. HUD determines that refinancing the defaulted loan at a

lower rate or partial prepayment is necessary to

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9/92 22-8

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4350.1 REV-1

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restore the project to a financially sound condition

and to avoid an insurance claim.

22-12. If a mortgagor desires HUD\'s override, it must make its

written request to the HUD Field Office with

jurisdiction over the project. The mortgagor must

provide sufficient information to enable HUD to make

the determination stated in conditions b, c, and d in

paragraph 22-11.

22-13. Asset Management/Loan Management Branch Chiefs must be

satisfied that mortgagors in these circumstances did

not intentionally cause a default in order to obviate

prepayment penalties or lockout provisions. After

performing the review required by paragraph 22-11

above, Asset Management/Loan Management Branch Chiefs

should prepare written comments supporting their

conclusions and recommendations and forward these

comments through the HUD Regional Office to the

Operations Division, Office of Multifamily Housing

Management in HUD Headquarters. Headquarters will make

the decision about overriding the prepayment lockout or

penalty provision and will inform the mortgagee, the

mortgagor, and the respective HUD Field and Regional

Offices.

SECTION 4. PREPAYMENTS AND TERMINATIONS WHEN THERE ARE NO

RESTRICTIONS

22-14. When there are no prepayment restrictions, the

mortgagee sends the fully signed Form HUD-9807 to

the Office of Mortgage Insurance Accounting and

Servicing in HUD Headquarters at the address shown

on the form. That Office forwards a copy of the

form to the Office of Multifamily Housing

Management, Operations Division, which will

normally contact the appropriate HUD Field Office

to verify that there are no prepayment

restrictions for the particular project. When

this is confirmed, the Office of Multifamily

Housing Management will so inform MIAS and the

termination or prepayment request will be honored.

SECTION 5. EFFECT OF PREPAYMENT/VOLUNTARY TERMINATION ON

SECTION 8 HAP CONTRACTS

22-15. Prepayment of the mortgage or voluntary termination of

the mortgage insurance does not relieve the mortgagor

of any obligations under a Section 8 New

Construction/Substantial Rehabilitation or Section 8

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22-9 9/92

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4350.1 REV-1

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Loan Management Set-Aside Housing Assistance Payment

(HAP) Contract. All terms and conditions of the

Section 8 HAP Contract remain in force following

Department approval of mortgage prepayment or voluntary

termination of the mortgage insurance.

22-16. Mortgagors who wish to prepay a mortgage because of

refinancing will not be eligible for any rent increases

for the units covered by a Section 8 HAP Contract

except as prescribed by HUD regulations and

administrative procedures for the Section 8 Program.

Increased debt service requirements that occur as a

result of prepayment will not be used by HUD when

considering rent increase requests.

22-17. The HAP Contract prohibits the owner from charging

rents for comparable unassisted units which are less

than the Section 8 Contract Rents. Therefore, if

prepayment enables the owner to reduce rents, the terms

of the Section 8 HAP Contract would prohibit a rent

reduction for units comparable to those assisted under

the HAP Contract unless an equal reduction for the

units covered by the Section 8 HAP Contract is approved

by the Department.

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9/92 22-10

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4350.1 REV-1

APPENDIX 1

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Insurance Termination Request

for Multifamily Mortgage

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form HUD-9807 (4/92)

ref. handbook 4350.4

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22-11 9/92

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4350.1 REV-1

APPENDIX 1

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form HUD-9807

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9/92 22-12

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4350.1 REV-1

APPENDIX 2

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Project Name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Project Number:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Location:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

RENTAL USE AGREEMENT

(for use in the Section 223(f) Mortgage Insurance Program)

This Agreement is made and entered into this
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

day of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
19\_\_\_\_\_\_\_\_, by and

between the Secretary of Housing and Urban Development acting by

and through the Federal Housing Commissioner (\"HUD\"), and

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(Mortgager); WITNESSETH:

WHEREAS, HUD endorsed for mortgage insurance that certain Note

made by Mortgagor dated \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ and
secured by a

Mortgage (Deed of Trust) of even date therewith made to
\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, said Mortgage being
recorded at Official

Records Book \_\_\_\_\_\_\_\_\_\_\_\_\_, Page \_\_\_\_\_\_\_ in the
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_;

and

WHEREAS, the property secured by the said mortgage is described

in Exhibit A to that Mortgage and in Exhibit A of this Agreement

and is currently operated by Mortgagor as (Name of Project,

Address); and

WHEREAS, the said Note contains a prepayment provision as follows:

The debt evidenced by this Note may not be prepaid either

in whole or in part for a period of five years from the

date of endorsement hereof except in cases where the prior

written approval of the Federal Housing Commissioner is

obtained and such written approval is expressly based upon

the existence of one of the following:

\(i\) The grantor has entered into an agreement with the

Commissioner to maintain the property as rental housing

for the remainder of the specified five-year period;

\(ii\) The Commissioner has determined that the conversion

of the property to cooperative or condominium ownership

is sponsored by a bona fide tenants, organization

representing a majority of the households in the

project;

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

22-13 9/92

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4350.1 REV-1

APPENDIX 2

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(iii\) The Commissioner has determined that continuation of

the property as rental housing is unnecessary to

assure adequate rental housing opportunity for low

and moderate income people in the community; or

\(iv\) The Commissioner has determined that continuation

of the property as rental housing would have an

undesirable and deleterious effect on the surrounding

neighborhood.

WHEREAS, Mortgagor is the original Mortgagor and has requested

the prior written approval of HUD acting by and through the

Federal Housing Commissioner to prepay the
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

pursuant to the above quoted provision; and

WHEREAS, Mortgagor is willing to agree to maintain the subject

property as rental property until
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,

which is the requisite period of five years after the date of

HUD\'s endorsement of the
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_;

NOW, THEREFORE, in consideration of the mutual covenants

contained herein, and other good and valuable consideration,

the receipt and sufficiency of which are expressly acknowledged,

the parties agree as follows:

1\. The execution and recording of this Agreement shall

constitute HUD\'s approval of the prepayment of the Note

described above, provided such prepayment is made in

accordance with the terms of the Note for a prepayment

penalty, if applicable.

2\. The Mortgagor agrees that, during the period that it

owns the property, it will maintain the property as

rental housing until
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,

or until any earlier date agreed to by HUD in writing.

During such period the Mortgagor shall not market

project dwelling units for any purpose other than

rental housing without HUD\'s prior written approval.

3\. The provisions of this Agreement shall be binding upon

the heirs, successors and assigns of the Mortgagor.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

9/92 22-14

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4350.1 REV-1

APPENDIX 2

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4\. The provisions of this Agreement relating to the rental

use of the property shall be binding for the benefit of,

in favor of and enforceable by the Secretary and his

successors in office. The Secretary and his successors

in office and/or any third-party beneficiary shall be

entitled to (a) institute legal action to enforce

performance and observance of, (b) enjoin any actions

which are violative of, and (c) exercise any other

legal or equitable right or remedy with respect to,

such provisions. For the purpose of these covenants, a

third-party beneficiary shall be any person eligible for

occupancy in a rental project insured pursuant to the

provisions of Section 223(f). These rights and remedies

may be exercised separately or in combination.

5\. The Mortgagor agrees that during the period it owns the

property and after the prepayment has been made, it will

comply with the provisions of the Fair Housing Act which

prohibits discrimination in housing on the basis of race,

color, religion, sex, handicap, familial status, or

national origin, and with all regulations issued pursuant

to the Act.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement

to be executed the day and year first above written.

ATTEST: MORTGAGOR:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

by (Title):

by (Name):

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

SEAL UNITED STATES OF AMERICA

SECRETARY OF HOUSING AND

URBAN DEVELOPMENT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

By: Director, Office of

Multifamily Housing Management

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

22-15 9/92

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4350.1 REV-1

APPENDIX 2

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

County of \_\_\_\_\_\_\_, State of \_\_\_\_\_\_\_\_\_\_, SS:

I,
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,

notary public on and for the State of \_\_\_\_\_\_\_\_\_\_\_\_, do
hereby certify

that
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,

as

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,

on behalf of the Secretary of Housing and Urban Development

acting through the Federal Housing Commissioner, a party to the

foregoing and attached Use Agreement, personnally appeared

before me in said District, and, being personally known to me

and authorized to do so, executed said Use Agreement for the

purpose set forth therein.

Given under my hand and seal this
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

day of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
19 \_\_\_\_\_\_\_\_\_\_\_\_.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Seal)

Notary Public

My commission expires: \_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

9/92 22-16

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4350.1 REV-1

APPENDIX 2

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

STATE OF
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

COUNTY OF
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

On this \_\_\_\_\_\_\_\_\_\_ day of \_\_\_\_\_\_\_\_, 19\_\_\_\_, before
me, the undersigned

officer, personnally appeared
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

who acknowledged himself to be the
\_\_\_\_\_\_\_\_\_\_\_\_\_(title)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

of
\_\_\_\_\_\_\_\_\_\_\_(Mortgagor)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
and that as such

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
being

authorized to do so, executed the within Agreement for the

purpose therein contained by signing the name of said

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ by
himself as \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

WITNESS my hand and Notarial seal the day and year aforesaid.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Notary Public

My commission expires: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

22-17 9/92