19.4.2.4 Ground Lease

A. When all or part of the Mortgaged Property consists of a leasehold estate, the ground lease must include the provisions set forth in Lease Addendum (form HUD-92070M). The Lease Addendum provisions must be attached to the ground lease and incorporated into the ground lease by reference prior to the execution of the ground lease. If incorporation of the Lease Addendum prior to execution of the ground lease is not possible, the Lease Addendum must be separately executed by the Landlord and Tenant prior to HUD’s endorsement of the Note, with an appropriate amendment to the ground lease. A rider to the Security Instrument relating to the ground lease is not required.

B. For 223(a)(7) refinancing transactions, a new Lease Addendum will not be required unless the ground lease has been materially modified from the version approved at the previous HUD-insured loan closing and without HUD approval, or the ground lease term does not comply with the National Housing Act .