CFR > Title 24 - Housing and Urban Development > SUBTITLE B—Regulations Relating to Housing and Urban Development > CHAPTER XXIV—BOARD OF DIRECTORS OF THE HOPE FOR HOMEOWNERS PROGRAM (parts 4000 to 4001) > PART 4001—HOPE FOR HOMEOWNERS PROGRAM > SUBPART B—Eligibility Requirements and Underwriting Procedures (§4001.102 to §4001.122) > 4001.118—Equity sharing.

4001.118—Equity sharing.

(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 a Program mortgage on a property, as calculated by the 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 Program mortgage to underwrite the mortgage and to determine compliance with the maximum loan-to-value 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 non-mortgage liens on the property; less
(2) The original principal amount of the Program mortgage on the property.
(b) FHA's interest. Upon the sale or disposition of a property or Program mortgage refinancing, FHA shall calculate and be 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 the Board may establish.
[73 FR 58420, Oct. 6, 2008, as amended at 74 FR 622, Jan. 7, 2009]