4010.1 CHG

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CHAPTER 5. POLICY STATEMENTS CONCERNING CHANGES IN

JURISDICTIONAL BOUNDARIES OF MORTGAGE

INSURANCE OPERATIONS

5-1. PURPOSE. This chapter furnishes instructions to be followed in

mortgage insurance operations when there are changes in the

jurisdictional boundaries of field offices.

5-2. GENERAL. When notice is received of changes in jurisdictional

boundaries, the office losing and the office gaining the territory

will coordinate the transfer of files, applications and

reports so as to prevent confusion and delay in mortgage insurance

operations. Mortgagees, builders, real estate companies,

and others doing business with HUD-FHA in the area must be

notified by both field offices by circular letter of the change

in jurisdictional boundaries. The circular letter should

furnish instructions on the mortgage insurance operations

affected by the change.

5-3. ASSIGNING FHA CASE OR PROJECT NUMBER. All applications for

mortgage insurance on properties in an area which is being

transferred to another office, that are received four days or

less before the effective date of the change in jurisdictional

boundaries, are to be withheld from processing and forwarded to

the office which will take over the responsibility for the area.

The losing office will notify the mortgagee that the application

has been forwarded to the office gaining the territory. The

FHA case or project number will be assigned to the application

by the gaining office.

5-4. HOME MORTGAGE OUTSTANDING COMMITMENTS AND APPLICATIONS IN PROCESS.

FHA case numbers on home mortgage cases in the area being

transferred will not be changed. All case binders on properties

in the area, including all expired cases for which the case

binders have not been destroyed, conditional and firm commitments,

subdivision files, Cost Handbooks, and Mortgage Credit

files are to be forwarded to the gaining office for subsequent

processing actions. All applications in the processing stream

on the effective date of the change are to be processed by the

losing office through the present stage of processing. The case

binder will then be forwarded to the gaining office. The gaining

office will accept the previous processing determinations

made by the losing office. The case binder will include the

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Page 5-1 4/74

HUD-Wash., D, C.

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4010.1 CHG

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unused OCR Forms for use by the gaining office in reporting

subsequent ADP actions. The losing office will record the FHA

case number and date of transfer of all case binders on Form

FHA 2089d, Record of Home Mortgage Applications Received and

Processed.

a\. Notification of Transfer. The losing office will notify

the mortgagee in writing that the case file has been transferred

and will furnish the Director, Mortgage Insurance

Accounting, Attention: Billing Control Branch, by memorandum

a list of the FHA case numbers for cases transferred,

the office to which transferred and the date of transfer.

b\. FHA Forms 2089d and 1702. The gaining office will record

the transferred cases on FHA Form 2089d, Record of Home

Mortgage Applications Received and Processed. As OCR Forms

are completed for processing actions for transferred cases,

they must be grouped and submitted to Washington with a

separate FHA Form 1702, ADP Card Transmittal Notice.

5-5. PROJECT MORTGAGE APPLICATIONS. Project mortgage insurance

applications on properties located in the transferred area

which are in process on the effective date of the change will

be processed by the losing office through the present stage of

processing (e.g., feasibility, conditional commitment, firm

commitment, initial endorsement, or final endorsement). The

entire project case file together with all related data files

is then to be forwarded to the gaining office for subsequent

processing. Projects which are under construction will remain

tinder the jurisdiction of the losing office until completion

of construction and final endorsement. In the absence of error

concerning a material fact, the gaining office will accept the

previous processing determinations made by the losing office.

The losing office will record the date of transfer and the

office to which the case is transferred on FHA Form 2404,

Multifamily Housing Status Record Card. The gaining office will

establish a new FHA Form 2404 for each project transferred.

a\. Notification of Transfer. The losing office is to notify

the mortgagee in writing that the project case file has been

transferred and is to furnish the Director, Mortgage Insurance

Accounting, Attention: Billing Control Branch, by

memorandum a list of the FHA Project numbers for projects

transferred, the office to which transferred and the date

of transfer.

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4/74 Page 5-2

HUD-Wash., D. C.

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4010.1 CHG

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b\. Changing the Project Number. Upon receipt of the project

file, the gaining office will assign a new project number

and enter it on all documents in the case file. The mortgagee

will be notified in writing of the change and will be

requested to change the project number on all records

established for the case.

\(1\) Immediately upon assigning the new project number, the

gaining office will provide the Director, Mortgage

Insurance Accounting, Attention: Receipts Control

Branch, with a \"no money\" official receipt showing the

new project number in the panel headed \"FHA case or

project number\" and the old project number in the panel

headed \"Old Case No.\"

\(2\) The name of the office from which the project was

transferred will be entered in the panel headed \"Type of

Transaction,\" e.g., \"Transfer from Topeka, Kansas.\"

\(3\) If a change in project number involves a rent supplement

project on which a rent supplement contract has

been executed, the gaining office will prepare a

separate memorandum giving the project number being

cancelled and the new number assigned and forward it to

the Director, General and Program Accounting, Attention:

Diversified Payments and Receipts Division.

5-6. SUBSIDIZED MORTGAGE INSURANCE PROGRAMS. All contract authority

for transferred cases, either preliminary reservations or firm

obligations of contract authority, will be transferred to the

gaining office. This applies to all subsidized programs for

both home mortgage and project mortgage cases.

a\. Notification to Multifamily Underwriting Division. For

transferred cases, on which preliminary reservations or firm

obligations of contract authority are outstanding, the losing

office must provide the Director, Multifamily Underwriting

Division with a memorandum, giving the case or project number,

the number of units and the amount of contract authority. The

contract authority must be identified to indicate whether it

is a regular or special purpose contract allocation.

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Page 5-3 4/74

HUD-Wash., D. C.

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4010.1 CHG

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b\. Contract Authority Adjustments. The losing office will notify

the Director, Multifamily Underwriting Division, who will make

the required allocation adjustments in contract authority

between the losing and gaining offices. The contract authority

adjustment between the offices is to be carefully coordinated

to assure that all required changes in contract authority are

recorded on the fiscal records and reports of both offices in

the same month.

5-7. TRANSFER OF CONTRACT AUTHORITY. As indicated in paragraph 5-6.b.

above, contract authority adjustments for transferred cases are

to be recorded in the fiscal records and reports of the losing

and gaining offices in the same month. Under no circumstances

can the adjustment be recorded by either office until the allocation

notice has been received from the Director, Multifamily

Underwriting Division. The following entries are to be made on

fiscal records and reports maintained by the losing and gaining

offices to report adjustments for contract authority amounts

reserved or obligated under Sections 235, 236 and the rent

supplement programs for transferred cases on which contract

authority has been reserved or obligated.

a\. Entries Required by the Losing Office for Section 235

Transferred Cases - Preliminary Reservations. Outstanding

preliminary reservations for Section 235 transferred cases

are to be recorded by the losing office as a cancellation

of a preliminary reservation on the following FHA fiscal

records and reports:

\(1\) FHA Form 3123, Record of Section 235(i) Preliminary

Reservations.

\(2\) FHA Form 3127, Report of Contract Authority obligated.

\(3\) FHA Form 3138, Status of Reservations and Obligations.

b\. Entries Required by Gaining Office. The gaining office is

to record the preliminary reservations for the transferred

cases on the following fiscal records and reports:

\(1\) A separate record is to be established on FHA Form

3123 for preliminary reservations for transferred

Section 235 cases.

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4/74 Page 5-4

HUD-Wash., D. C.

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4010.1 CHG

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\(2\) Entries are to be made on FHA Form 3127 for the

preliminary reservations for transferred cases since they

are being reported as cancellations in the monthly

activity for the losing office.

\(3\) The total number of units and total amount of preliminary

reservations transferred are to be entered by

the gaining office on Line (5) of FHA Form 3138.

c\. Entries Required by the Losing Office for Section 235

Transferred Cases - Firm Obligations. Outstanding firm

obligations for Section 235 transferred cases are to be

recorded by the losing office as a cancellation of a firm

obligation on the following FHA fiscal records and reports:

\(1\) FHA Form 3124, Record of Contract Authority Obligated

for Assistance Payments Under Section 235(b).

\(2\) FHA Form 3127, Report of Contract Authority Obligated.

\(3\) FHA Form 3138, Status of Reservations and Obligations.

d\. Entries Required by Gaining Office. The gaining office is

to record the firm obligations for the transferred cases on

the following fiscal records and reports:

\(1\) A separate record is to be established on FHA Form 3124

for firm obligations for transferred Section 235 cases.

\(2\) Entries are to be made on FHA Form 3127 for the firm

obligations for transferred cases since they are being

reported as cancellations in the monthly activity for

the losing office.

\(3\) The total number of units and total amount of firm

obligations transferred are to be entered by the

gaining office on Line (1) of FHA Form 3138.

e\. Entries Required by the Losing Office for Sections 235(j)

or 236 Transferred Cases - Preliminary Reservations.

Outstanding preliminary reservations for Section 235(j) or

236 transferred cases are to be recorded by the losing

office as a cancellation of a preliminary reservation on

the following FHA fiscal records and reports:

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Page 5-5 4/74

HUD-Wash., D. C.

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4010.1 CHG

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(5-7) (1) FHA Form 3125, Record of Contract Authority Reserved

and Obligated for Assistance Payments or Interest

Reduction Payments Under Section 235(j) or Section 236.

\(2\) FHA Form 3127, Report of Contract Authority obligated.

\(3\) FHA Form 3138, Status of Reservations and Obligations.

f\. Entries Required by Gaining Office. The gaining office is

to record the preliminary reservations for the transferred

cases on the following fiscal records and reports:

\(1\) A separate record is to be established on FHA Form 3125

for preliminary reservations for transferred

235(j) or 236 cases.

\(2\) Entries are to be made on FHA Form 3127 for the

preliminary reservations for transferred cases since

they are being reported as cancellations in the monthly

activity for the losing office.

\(3\) The total number of units and total amount of

preliminary reservations transferred are to be entered by

the gaining office on Line (5) of FHA Form 3138.

g\. Entries Required by the Losing Office for Sections 235(j) or

236 Transferred cases \-- Obligations. Outstanding firm

obligations for Sections 235(j) or 236 transferred cases are to

be recorded by the losing office as a cancellation of a firm

obligation on the following HUD-FHA fiscal records and reports:

\(1\) FHA Form 3125, Record of Contract Authority, Reserved

Obligated for Assistance Payments or Interests Reduction

Payments Under Section 235(j) or Section 236.

\(2\) FHA Form 3127, Report of Contract Authority Obligated.

\(3\) FHA Form 3138, Status of Reservation; and Obligations.

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4/74 Page 5-6

HUD-Wash., D. C.

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4010.1 CHG

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h\. Entries Required by Gaining Office. The gaining office is

to record the firm obligations for the transferred cases

on the following fiscal records and reports:

\(1\) A separate record is to be established on FHA Form

3125 for firm obligations for transferred Sections

235(j) or 236 cases.

\(2\) Entries are to be made on FHA Form 3127 for the firm

obligations for transferred cases since they are being

reported as cancellations in the monthly activity for

the losing office.

\(3\) The total number of units and total amount of firm

obligations transferred are to be entered by the gaining

office on Line (10) of FHA Form 3138.

i\. Entries Required by the Losing Office for Transferred Rent

Supplement Projects - Original Reservations. Outstanding

original reservations for transferred rent supplement

projects are to be recorded by the losing office as an outright

cancellation of an original reservation on the following

FHA forms:

\(1\) A separate record is to be established on FHA Form 2591,

Record of Rent Supplement Reservations, for original

reservations for transferred rent supplement projects.

\(2\) Entries are to be made on FHA Form 2593, Report of Rent

Supplement Reservations and Obligations, for the original

reservations for transferred cases since they are

being reported as cancellations in the monthly activity

for the losing office.

\(3\) The total number of rent supplement projects, units and

dollar amount of original reservations transferred are

to be entered by the gaining office on the appropriate

line of FHA Form 2595, Status of Rent Supplement

Reservations and Obligations.

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Page 5-7 4/74

HUD-Wash.. D. C.

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4010.1 CHG

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(5- 7) j. Entries Required by Gaining Office. The gaining office is

to record the original reservations for the transferred

rent supplement projects on the following forms:

\(1\) A separate record is to be established on FHA Form

2591 for original reservations for transferred rent

supplement projects.

\(2\) Entries are to be made on FHA Form 2593 for the original

reservations for transferred cases since they

are being reported as cancellations in the monthly

activity for the losing office.

\(3\) The total number of rent supplement projects, units

and dollar amount of original reservations transferred

are to be entered by the gaining office on the appropriate

line of FM Form 2595.

k\. Entries Required by the Losing Office for Transferred Rent

Supplement Projects - Firm Obligations. Outstanding firm

obligations for transferred rent supplement projects are

to be recorded by the losing office as a cancellation of a

firm obligation on the following FM form:

\(1\) For transfers of firm obligations, the losing office

will type or print in the space between items (11) and

\(12\) on FHA Form 2595: \"LESS: TRANSFERS TO (NAME OF

OFFICE).\" Appropriate entries are then to be made for

the transfers.

\(2\) The losing office is to prepare and attach to the Form

2595 submitted to the Director, General and Program

Accounting, a memorandum setting forth the following

information for each such contract cancelled on its

records and transferred: project number, number of

units, contract amount cancelled and date of transfer.

l\. Entries Required by Gaining Office. The gaining office is to

record the firm obligations for the transferred rent supplement

projects on the following fiscal records and reports.

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4/74 Page 5-8

HUD-Wash., D. C.

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4010.1 CHG

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\(1\) A separate record is to be established on FHA Form

2592 for firm obligations transferred for rent supplement

projects.

\(2\) No entries are to be made on FHA Form 2593 for firm

obligations for transferred rent supplement projects.

\(3\) For transfers of firm obligations, the gaining office

will type or print in the space between Lines (11) and

\(12\) on Form 2595: \"ADD: TRANSFERS FROM (NAME OF

OFFICE).\" The total number of projects, units and

dollar amount of firm obligations transferred are to

be entered between Lines (11) and (12) of FHA Form 2595.

5-8. PENDING ACTIONS. Other pending actions such as construction

complaints, compliance matters, Congressional or public

correspondence, etc., should be forwarded to the gaining office as

soon as practicable. It is not necessary to wait until the action is

finally resolved. The files on such actions must be fully

documented.

It there are any questions concerning these instructions, please

telephone the following offices:

Fiscal - Office of Finance and Accounting,

Systems and Procedures Staff

All Other - Office of Field Support

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Page 5-9 (and 10) 4/74

HUD-Wash., D. C.