7.16.4 Deferral of Real Estate Taxes

A. A real estate tax deferral must be distinguished from a real estate tax abatement. A tax deferral only postpones the payment of real estate tax until some future date. The Borrower shall not participate in a real estate tax deferral program unless approved by HUD Headquarters in writing. HUD will not approve participation in any real estate tax deferral program unless participation will not result in the creation of a lien that has priority over the insured mortgage and, if applicable, any second mortgage held by the Commissioner. However, if any deferred taxes result in a first lien on the property, the tax lien must be paid before HUD will allow an FHA insurance claim, and the payment will not be reimbursed by HUD as part of any insurance claim.