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Unformatted text preview: e once–a–year payments, and in many cases the property was lost due to a tax lien. Often the property was damaged by fire and the owner did not have insurance to cover the loss. FHA, with the advent of the escrow account, made sure that the lender was less likely to lose the property due to a tax lien and made sure that there was insurance coverage on the property. This was also an advantage for the property owner in that he or she did not have to make one lump sum payment for taxes and insurance, but would set aside one–twelfth of the cost each month. Minimum property standards – FHA was the first lender or insurer of mortgages to set minimum standards for the property. These standards have constantly been upgraded to make sure that the property securing the mortgage is safe, sanitary, and livable. The standards covered such things as the amount of insulation, the arrangement of rooms, the number of baths, and the type of wiring used in a house. Some have referred to these standards as a national housing code. The requirements of FHA were basically the same no matter where in the United States the property was located. Then with the passage of the Housing and Urban–Rural Recovery Act of 1983 and the signing of the legislation on November 30, 1983, Title IV,
5-22 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 5: GOVERNMENT PARTICIPATION & BACKED LOANS
Program Amendments and Extensions, Part A, Subpart 1, Section 405, entitled Minimum Property Standards all of the HUD–FHA minimum property standards for all types of properties other than manufactured housing were basically eliminated. Paragraph (2) of this section did keep in place the energy conservation portion of the minimum property standards. The paragraph states that the energy performance requirements developed and established by the Secretary of Housing and Urban Development under this subsection for newly constructed homes, other than manufactured homes, shall be effect...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10