---
kind: "section"
citation: "24 C.F.R. § 1005.727"
title: "24"
number: "1005.727"
heading: "Substitute Borrowers."
url: "https://uscodex.org/cfr/24/1005.727"
---

# §1005.727. Substitute Borrowers.


Where an original Borrower requests the substitution of an existing Borrower on the [Section 184](/cfr/24/184.md) Guaranteed Loan:

- (a) A Servicer who is Non-Direct Guarantee Lender or financial institution must obtain HUD approval for the substitution. A remaining original Borrower must be maintained and continue to be personally liable for the [Section 184](/cfr/24/184.md) Guaranteed Loan, notwithstanding any discharge entered in accordance with applicable Tribal, Federal, or State law.
- (b) A Servicer who is a Direct Guarantee Lender may, subject to limitations established by HUD, approve an eligible substitute Borrower that meets the requirements for [Section 184](/cfr/24/184.md) Guaranteed Loans which they own or service, without specific approval from HUD. The remaining original Borrower must be maintained and continue to be personally liable for the [Section 184](/cfr/24/184.md) Guaranteed Loan, notwithstanding any discharge entered in accordance with applicable Tribal, Federal, or State law.

## Notes

### Authority

Authority: 12 U.S.C. 1715z-13a; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).

### Source

Source: 89 FR 20056, Mar. 20, 2024; 89 FR 22084, Mar. 29, 2024, unless otherwise noted.