CFR > Title 24 - Housing and Urban Development > SUBTITLE B—Regulations Relating to Housing and Urban Development > CHAPTER II—OFFICE OF ASSISTANT SECRETARY FOR HOUSING—FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (parts 200 to 291) > SUBCHAPTER B—MORTGAGE AND LOAN INSURANCE PROGRAMS UNDER NATIONAL HOUSING ACT AND OTHER AUTHORITIES (parts 201 to 266) > PART 257—HOPE FOR HOMEOWNERS PROGRAM > SUBPART B—Eligibility Requirements and Underwriting Procedures (§257.102 to §257.122) > 257.118—Exit fee.

257.118—Exit fee.

(a) Initial Equity. For purposes of section 257(k)(1) of the Act, the initial equity created as a direct result of the origination of an H4H program mortgage on a property, as calculated by the H4H program mortgage lender, shall equal:
(1) The lesser of—
(i) The appraised value of the property that was used at the time of origination of the H4H program mortgage to underwrite the mortgage and to determine compliance with the maximum LTV ratio at origination established by section 257(e)(2)(B) of the Act; or
(ii) The outstanding amount due under all existing senior mortgages, existing subordinate mortgages, and nonmortgage liens on the property; less
(2) The original principal amount of the H4H program mortgage on the property.
(b) FHA's interest. Upon the sale or disposition of a property secured by the H4H program mortgage or H4H program mortgage refinancing, FHA is entitled to receive the portion of the initial equity (as defined by paragraph (a) of this section) set forth in section 257(k)(1) of the Act, subject to such standards and policies as HUD may establish.