On August 6, 2024, HUD’s Office of Multifamily Housing published the following information:

Today, the Office of Multifamily Housing Programs, published the Disbursing Multifamily Mortgage Proceeds: Permitting Mortgagees to Disburse Mortgage Proceeds with Mortgagor-Provided Funds proposed rule in the Federal Register for public comment to modernize regulation in 24 CFR § 200.54(b). The deadline for public comment is October 7th, 2024.

HUD seeks to modernize regulation in 24 CFR § 200.54(b) by:

  1. Updating the regulation to allow disbursement of the mortgage proceeds resulting from the initial issuance of a mortgage-backed security guaranteed by the Government National Mortgage Association (Ginnie Mae).
  2. Permitting lenders, where the funds provided by the borrower to the lender are not fully disbursed with the initial advance of the insured mortgage proceeds, to disburse up to 1 percent of the mortgage amount initially endorsed for FHA-insurance.
  3. Permitting borrower’s deposited funds to not be fully disbursed before any disbursement of insured mortgage proceeds.