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

August 1, 1979
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER               IN REPLY REFER TO:
Mortgagee Letter 79-15
TO:  ALL APPROVED MORTGAGEES
SUBJECT:  Single Family Coinsurance
 
     The instruction limiting single family coinsurance to Section
203(b) loans only is hereby amended.  Effective immediately, approved
coinsuring lenders may include Section 245 graduated payment
mortgages (GPM) under coinsurance.  The Department encourages lenders
to participate in coinsurance and the GPM programs.  Approved lenders
already participating in coinsurance need not receive additional
training to implement these changes.  Lenders originate GPM coinsured
loans in the same manner as 203(b) coinsured loans.  However, when
submitting for insurance endorsement, the lender must show a case
number suffix code of 272 with the appropriate plan number in
parentheses after the case number.  For example, the suffix code and
plan number for a Plan III GPM under coinsurance would be 272 (III).
These provisions do not apply to the purchase of a condominium unit.
 
     Those mortgage lenders which have not been approved for
participation in the coinsurance program should contact the local
field office for detailed information on the coinsurance program.
 
                                   Sincerely,
 
                                   Lawrence B. Simons
                                   Assistant Secretary
 
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