§ 2700.201 - Types and terms of emergency assistance.

(a) Types of emergency assistance. Emergency assistance may be provided to an eligible homeowner in the form of emergency mortgage relief loans and advances of credit, or in the form of emergency mortgage relief payments. In accordance with §2700.205, the aggregate amount of assistance provided for any eligible homeowner shall not exceed $50,000 or extend beyond the term of monthly payments, as defined in §2700.5.

(1) Emergency mortgage loans and advances. HUD is authorized, upon such terms and conditions as specified by HUD, to insure financial institutions, which HUD finds to be qualified by experience and facilities and approves as eligible for insurance, against losses that they may sustain as a result of providing emergency mortgage relief loans or advances of credit made under this part.

(2) Emergency mortgage relief payments. (i) HUD is authorized to make emergency relief payments under such terms and conditions as HUD may prescribe. Emergency mortgage relief payments may be provided:

(A) As payment of 100 percent of an eligible homeowner's delinquent mortgage arrearages, which may include mortgage principal, interest, insurance, taxes, hazard insurance, ground rent, homeowners' assessment fees or condominium fees, and foreclosure-related legal fees and late payments, in accordance with such terms and conditions as prescribed by HUD; and

(B) As monthly payments due on such delinquent mortgage, for up to a period not to exceed the term of monthly payments, as provided in §2700.5.

(ii) Such emergency mortgage relief payments may be repayable in the form of a declining balance, non-recourse, zero-interest, subordinate loan secured by the same property securing the delinquent mortgage, for a term of up to 7 years.

(3) Direct payments to mortgagees. HUD is authorized to make direct emergency mortgage relief payments to a mortgagee that elects not to participate in the Emergency Homeowners' Loan program as an approved mortgagee on behalf of homeowners:

(i) Whose mortgages are held by such mortgagee; and

(ii) Who meet the requirements of §2700.110.

(b) Terms and conditions of assistance. Emergency mortgage relief loans and advances of credit made and insured under this part, and emergency mortgage relief payments made under this part, shall be repayable by the homeowner upon such terms and conditions prescribed by HUD, except that:

(1) The rate of interest on any emergency mortgage relief loan or advance of credit insured shall be fixed for the life of the emergency mortgage relief loan or advance of credit and shall not exceed the rate of interest that is generally charged for mortgages on single-family housing insured by the Federal Housing Administration under title II of the National Housing Act at the time such emergency mortgage relief loan or advance of credit is made;

(2) No interest shall be charged on interest that is deferred on an emergency mortgage relief loan or advance of credit made under this part. In establishing rates, terms, and conditions for emergency mortgage relief loans or advances of credit, HUD shall take into account a homeowner's ability to repay such emergency mortgage relief loan or advance of credit;

(3) Any mortgage insurance premium charge or charges for any emergency mortgage relief loan or advance of credit made under this part shall not exceed an amount equivalent to one-half of one percent per annum of the principal obligation of such emergency mortgage relief loan or advance of credit outstanding at any one time;

(4) Unless otherwise specified by HUD for a given fiscal year, the homeowner's contribution to the monthly mortgage payment will be set at 31 percent of monthly income at the time of the application for assistance, but in no instance will such contribution to the monthly mortgage payment be less than $25 per month;

(5) The homeowner may repay the emergency mortgage relief loan or advance of credit in full, without penalty, by lump sum or by installment payments at any time before the emergency mortgage relief loan or advance of credit becomes due and payable; and

(6) With respect to the emergency mortgage relief payments repayable in the form of a declining balance, non-recourse, zero-interest, subordinate loan as described §2700.201(a)(2), no payment shall be due by the homeowner during the term of the loan so long as the homeowner remains current in his or her monthly homeowner contribution payments on the delinquent mortgage. If the homeowner meets this requirement, the balance due shall decline by such percentage as may be designated by HUD, until the loan is fully satisfied.

(c) Termination of emergency assistance. Emergency assistance provided to a homeowner shall be terminated and the homeowner shall resume full responsibility for meeting the first mortgage payments if any of the following occur:

(1) The maximum loan amount ($50,000) has been provided to the homeowner;

(2) The homeowner fails to report changes in employment status or income within 15 days of the change;

(3) The homeowner's income increases to 85 percent or more of its pre-Event income level, or such other percentage as may be prescribed by HUD;

(4) The homeowner sells the mortgaged property or refinances the mortgaged property for cash-out;

(5) The homeowner defaults on the monthly homeowner's contribution payment on the delinquent mortgage;

(6) The homeowner has exhausted the full term of monthly payments, as defined in §2700.5; or

(7) Such other event as may be specified by HUD.

(d) Deferral of commencement of repayment. HUD may authorize the deferral of the commencement of the repayment of an emergency mortgage relief loan or advance of credit or emergency mortgage relief payments made under this part until one year following the date of the last disbursement of the proceeds of the emergency mortgage relief loan or advance of credit or emergency mortgage relief payments, or for such longer period as HUD determines would further the purpose of the Emergency Homeowners' Loan Program.