---
kind: "section"
citation: "24 C.F.R. § 290.37"
title: "24"
number: "290.37"
heading: "Requirements for continuing Federal rental subsidy contracts."
url: "https://uscodex.org/cfr/24/290.37"
---

# §290.37. Requirements for continuing Federal rental subsidy contracts.


For any mortgage that, at the time HUD offers the mortgage for sale without FHA mortgage insurance, is delinquent and secures a subsidized project or unsubsidized project that receives any of the forms of assistance enumerated in [paragraphs (4)(i) to (4)(iv)](#4-i..4-iv) of the “subsidized project” definition in [§ 290.3](/cfr/24/290.3.md):

- (a) The mortgage purchaser and its successors and assigns shall require the mortgagor to record a covenant running with the land as part of any loan restructuring or of a final compromise of the mortgage debt and shall include a covenant in any foreclosure deed executed in connection with the mortgage. The covenant shall continue in effect until the last federal project-based rental assistance contract expires by its own terms. The covenant shall provide that, except where otherwise approved by HUD, a project purchaser shall agree to assume the obligations of any outstanding:
  - (1) Project-based federal rental subsidy contract; and
  - (2) Tenant-based [Section 8](/cfr/24/8.md) housing assistance payments contract with a public housing agency and the related lease.
- (b) In the event of foreclosure of the mortgage sold by HUD, the mortgage purchaser and its successors and assigns:
  - (1) Shall foreclose in a manner that does not interfere with any lease related to federal project-based assistance or any lease related to tenant-based, [Section 8](/cfr/24/8.md) housing assistance payments; and
  - (2) Shall foreclose in manner that ensures that the right of possession of the purchaser at a foreclosure sale shall be subject to the terms of any residential lease not subject to [paragraph (b)(1)](#b-1) of this section for the remaining term of the lease or for one year, whichever period is shorter.

## Notes

### Amendments

[61 FR 11685, Mar. 21, 1996, as amended at 61 FR 32265, June 21, 1996]

### Authority

Authority: 12 U.S.C. 1701z-11, 1701z-12, 1713, 1715b, 1715z-1b, 1715z-11a; 42 U.S.C. 3535(d) and 3535(i).

### Source

Source: 61 FR 11685, Mar. 21, 1996, unless otherwise noted.

### Amendments

[61 FR 11685, Mar. 21, 1996, as amended at 61 FR 32265, June 21, 1996]