Additional mortgage to HUD Clause Samples

Additional mortgage to HUD. A Re- structuring Plan may require the owner to give an additional mortgage on the project to HUD in an amount that does not exceed the difference be- tween the amount of a section 541(b) claim paid under § 401.471 and the prin- cipal amount of the second mortgage. HUD will provide guidance to PAEs re- ▇▇▇▇▇▇▇ the circumstances under which a Plan may be negotiated that provides for less than the full difference to be payable under the additional mortgage. This additional mortgage must be jun- ior in priority to the second mortgage required by paragraph (a) of this sec- tion, bear interest at the same rate, which will accrue but not compound, and require no payment until the sec- ond mortgage is satisfied, when it will be payable upon demand of the Sec- retary or as otherwise agreed by the Secretary. HUD will pay a section 541(b) claim from the appropriate insurance fund to the insured mortgagee on behalf of the mortgagor. The mortgagee must use the claim payment to prepay the prin- cipal balance of the insured mortgage, in whole or in part, as provided in the Restructuring Plan. All section 541(b) claims will be paid in cash. Part 207 of this title and sections 207(g) and 541(a) of the NA do not apply to a section 541(b) claim. (a) Sources of funds—(1) Project ac- counts. The Restructuring Plan for funding rehabilitation must include funds from the project’s residual re- ceipts account, surplus cash account, replacement reserve account, and other project accounts, to the extent the PAE determines that those accounts will not be needed for the initial de- posit to the reserves.