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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410

July 14, 1978
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER              IN REPLY REFER TO:
Mortgagee Letter 78-10
TO:       ALL APPROVED MORTGAGEES
SUBJECT:  Payment of Claims - Loans Insured Under Section 241
 
     Mortgage insurance benefits for loans insured under Section 241
of the National Housing Act are currently paid with debentures.
 
     With respect to any claim for insurance benefits filed after
July 15, 1978, where the project loan has received initial
endorsement for insurance (or initial/final in insurance upon
completion cases) on or after such date, HUD will, until further
notice, pay such claims in the same manner, cash or debentures, as
the claim would be paid on the insured first mortgage.
 
                                Lawrence B. Simons
                                Assistant Secretary for
                                Housing-Federal Housing
                                Commissioner
 
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