Loan purposes.

CFR · 2024-01-01 · US · Title 7

Section 502 funds may be used to buy, build, rehabilitate, improve, or relocate an eligible dwelling and provide related facilities for use by the borrower as a permanent residence. In limited circumstances section 502 funds may be used to refinance existing debt. (a) (b) (1) In the case of loans for existing dwellings, if: (i) Due to circumstances beyond the applicant's control, the applicant is in danger of losing the property, the debt is over $5,000, and the debt was incurred for eligible program purposes prior to loan application or was a protective advance made by the mortgagee for items covered by the loan to be refinanced, including accrued interest, insurance premiums, real estate tax advances, or preliminary foreclosure costs; or (ii) If a loan of $5,000 or more is necessary for repairs to correct major deficiencies and make the dwelling decent, safe and sanitary and refinancing is necessary for the borrower to show repayment ability, regardless of the delinquency. (2) In the case of loans for a building site without a dwelling, if: (i) The debt to be refinanced was incurred for the sole purpose of purchasing the site; (ii) The applicant is unable to acquire adequate housing without refinancing; and (iii) The RHS loan will include funds to construct an appropriate dwelling on the site for the applicant's use. (3) Debts incurred after the date of RHS loan application but before closing may be refinanced if the costs are incurred for eligible loan purposes and any con

official document · source cfr-2024 · id 7:§ 3550.52