amount of, a payment under the regulations in this part may have his claim reviewed or reconsidered by the head of the State agency or his authorized designee, in accordance with such procedures as the State agency shall have established for such review or reconsideration. Where such person is not satisfied by such review or redetermination, he is entitled to redetermination of his claim by HUD. Any person or class of persons may similarly seek review and revision of any schedules with respect to payments under the regulations in this part.

§ 42.195

Accounts and records.

Accounts and records shall be subject to inspection or audit at all reasonable times by HUD. Records pertaining to eligibility for payments, including all claims, receipted bills, or other documentation in support of a claim, and records pertaining to action on a claim, shall be retained by the State agency for not less than 3 years after the completion of the project. Timely and complete reports shall be submitted in accordance with HUD requirements.

§ 42.200 Payments not to be considered as income.

No payment received under these regulations by a displaced person shall be considered as income for the purposes of the Internal Revenue Code of 1954; or for the purposes of determining the eligibility or the extent of eligibility of any person for assistance under the Social Security Act or any other Federal law. § 42.205 Displacement in connection with more than one project.

No person shall be entitled to more than one payment under each of §§ 42.65-42.95 and §§ 42.140 and 42.145 on account of a single displacement or a single acquisition, notwithstanding that the displacement or acquisition is in connection with more than one Federal or federally assisted project.

§ 42.210 Policies and requirements of HUD.

All determinations or other actions by the State agency provided for under the regulations in this part shall be undertaken in accordance with the policies and requirements of HUD as issued from time to time.

AUTHORITY: The provisions of this Part 81 issued under secs. 303 (c), 304(b), 309 (h), 311, 12 U.S.C. 1718(c), 1719(b), 1723a (h), 1723c.

SOURCE: The provisions of this Part 81 appear at 36 F.R. 24457, Dec. 22, 1971, unless otherwise noted.

§ 81.1 Scope of part.

This part is established for the codification of regulations governing the operations of the Federal National Mortgage Association (hereafter in this part called the corporation) issued and to be issued from time to time by the Secretary of Housing and Urban Development, as authorized by the Federal National Mortgage Association Charter Act (hereafter in this part called the Charter Act). § 81.2 Common stock.

(a) The corporation is authorized to issue shares of its common stock to each seller or borrower who makes capital contributions authorized by section 303(b) of the Charter Act. The corporation is further authorized to issue and sell additional shares of its common stock to the servicers of its mortgages, in consideration for payments by such servicers into the corporation's capital or capital and surplus for each share of an amount equal to the then current issue price of the common stock authorized to be issued by the first sentence hereof; but no such stock shall be issued to any servicer at any time in excess of its reasonably foreseeable need at such time in connection with the amount of stock required to be held pursuant to section 303 (c) of the Charter Act. The authorizations of this paragraph are granted on the condition that the Secretary of Housing and Urban Development be given written notice at least 15 days in advance of any change

by the corporation in the issue price of its stock issued pursuant to this paragraph.

(b) For any and all stock or convertible debt issues other than stock issued pursuant to paragraph (a) of this section, the corporation is authorized to adopt a shareholder resolution, governing all such issues and sales of shares of its common stock, or other securities convertible into the corporation's common stock, which permits the corporation to provide for or limit or deny to shareholders pre-emptive rights in all purchases of issues of such stock or securities. Such resolution shall be effective with respect to each such issue from and after the date of adoption thereof and until expressly repealed or amended by a subsequent resolution duly adopted in accordance with the procedures set forth in paragraph (c) of this section.

(c) The shareholder resolution authorized by paragraph (b) of this section shall be made in the following manner:

(1) The Board of Directors of the corporation shall adopt the proposed resolution setting forth the language thereof and directing that it be submitted to a vote at a meeting of shareholders of the corporation, which may be either an annual or a special meeting.

(2) Written notice setting forth the proposed resolution or a summary of it shall be given to each shareholder of record entitled to vote thereon within the time and in the manner provided for notices of meetings of shareholders in the bylaws of the corporation.

(3) At such meeting a vote of the shareholders entitled to vote thereon shall be taken on the proposed resolution. The proposed resolution shall be adopted upon receiving the affirmative vote of the holders of at least two-thirds of the shares of the corporation which are outstanding and entitled to vote thereon.

(d) For any issues other than stock issued as authorized by paragraph (a) of this section, the approval of the Secretary is required prior to the issuance by the corporation of any stock, obligation, security, or similar instrument.

section 304(b) of the Charter Act and outstanding at any one time shall not exceed 25 times the sum of its capital, capital surplus, general surplus, reserves and undistributed earnings. For the purposes of this section, the outstanding aggregate principal amount of any obligations of the corporation issued under section 304 (e) of the Charter Act which are entirely subordinated to the obligations of the corporation issued or to be issued under section 304 (b) of the Charter Act shall be deemed to be capital of the corporation.

(b) In the event at any time of a reduction in the sum of the corporation's capital, capital surplus, general surplus, reserves, and undistributed earnings, the maximum debt to capital ratio is automatically increased to such ratio as may be necessary to include all obligations issued under said section 304 (b) and outstanding at such time. In the event at any time of a maturity or other event requiring the payment or redemption of any of the obligations issued under section 304 (e) of the Charter Act, the maximum debt to capital ratio is automatically increased to such ratio as may be necessary to permit the issue of obligations under section 304(b) of the Charter Act in an amount sufficient to provide the proceeds required to pay the principal of and interest on the obligations outstanding under such section 304 (e) and so required to be paid or redeemed at such time. As used in this section, the term "maximum debt to capital ratio" means the maximum ratio, set forth in paragraph (a) of this section or elsewhere, which may be borne to the aforesaid sum by the aggregate principal arnount of the corporation's obligations issued under section 304 (b) of the Charter Act and outstanding at any one time.

So long as any obligations of the corporation issued under section 304 (e) of the Charter Act are outstanding, no action shall be taken with respect to the debt to capital ratio provisions of this subsection which is detrimental to the holders of such obligations.

§ 81.5 Issuance of obligations.

The corporation is authorized, upon the approval of the Secretary of the Treasury, to issue its obligations and securities from time to time under subsections (b), (d), and (e) of section 304 of the Charter Act in such amounts as may be approved in writing by the Secretary of Housing and Urban Development. In the event at any time of a maturity or other event requiring the payment or redemption of any of the corporation's outstanding obligations, the corporation is hereby authorized, upon the approval of the Secretary of the Treasury, to issue its obligations and securities at such time under any of the aforesaid subsections of section 304 of the Charter Act in an amount sufficient to provide the proceeds required to pay the principal of and interest on the obligations so required to be paid or redeemed at such time.

§ 81.6 Housing for low and moderate income families. [Reserved]