(2) Income. (i) Base Employment Income. (Enter only normal monthly base salary, wages and retirement income. For self-employed persons, enter average or normal monthly income.)

(ii) Other Income. (Average per month. If received on a regular basis include, by so stating, overtime pay bonuses, commissions, dividends, interest, rental income, and income from part-time employment. Include alimony, separate maintenance and child-support payment information only if the applicant has been advised that such information need not be provided and elects to have it considered.)

(3) Number of dependents. (Each dependent should be counted only once. The applicant and any co-applicant(s) should be excluded.)

(4) Total assets. (i) Liquid assets. (InIclude all cash and other items which are readily convertible to cash (e.g., checking, savings, and time deposit accounts at banks, savings and loan associations, credit unions, or similar institutions; stocks and bonds for which there is a ready market; and the cash surrender value of any life insurance policies).)

(ii) All other assets.

(5) Total liabilities. Exclude any liabilities which will result from the approval of the application and list the following:

(i) Liabilities which will be satisfied upon sale of real estate owned, or upon refinancing of property, associated with this application.

(ii) All other outstanding liabilities.

(6) Total monthly payments on liabilities. Exclude any payments on liabilities which will result from the approval of the application and list the following:

(1) Payments on liabilities which will be satisfied upon sale of real estate owned, or upon refinancing of property, associated with this application.

(ii) All other payments on outstanding liabilities.

(7) Customer(s) of Bank-Yes or No. (B) Characteristics of subject property.

(1) Year Built.

(2) Purchase Price or Approximate Current Market Value.

(3) Value of Land (Construction Loan Only).

(4) Street Address, City, County, State, Zip Code.

(5) Census Tract.

(6) Number of Residential Units. (C) Characteristics of loan request. (1) Purpose of loan.

(i) Purchase of existing dwelling. (ii) Refinancing of existing home loan.

(iii) Construction loan only. (iv) Construction-Permanent. (v) Other, including loan for improvement, repair, or maintenance (specify).

(2) Type mortgage. (i) Conventional. (ii) VA.

(iii) FHA.

(iv) Other (specify).
(3) Amount of Loan.
(4) Interest Rate.

(5) Months to Maturity. (For shortterin, renewable mortgages or those with some other provision for varying rates, a brief explanation of the provisions should be appended to the application form.)

(6) Monthly Payment, Principal and Interest.

(7) Estimated Total Closing Costs. (Excluding downpayment.)

(8) Estimated Closing Costs Paid by Seller.

(9) Estimated Real Estate Taxes and Insurance. (Indicate annual or monthly.)

(iii) Collection of data.

(A) Each bank shall attempt to collect that information in paragraph (a)(2)(i) of this section during the initial contact with the inquirer or applicant. If the applicant or inquirer refuses to furnish all or part of this information, the bank shall note the fact or have the applicant or inquirer note the fact on the form used for recording the information. If the information regarding race and sex is not voluntarily furnished, the bank shall, on the basis of visual observations or surnames, separately note the information on the form or an attached document.

(B) No bank shall engage in any activity which discourages an applicant or inquirer from providing the information in paragraphs (a)(2)(i) and

(a)(2)(ii) of this section. If the bank is unable to obtain any part of the information requested of the applicant under paragraph (a)(2)(ii) of this section, it shall note the reason in the application file. Also, if the bank rejects an application before it has had the opportunity to collect all of the information under paragraph (a)(2)(ii) of this section, it shall note the reason for the rejection in the application file and need not obtain the remaining information.

(iv) Log-sheet. In addition to the other recordkeeping requirements specified in this paragraph (a)(2) of this section, each bank covered by the provision shall keep a log-sheet on its home loan inquiries and applications by bank office. The log-sheet shall contain the information reflected on the sample form in Appendix A. The bank shall be able to trace each entry on the log-sheet to the relevant inquiry or application file, using the name of the inquirer or applicant or a unique case number assigned by the bank.

(b) Disclosure to applicant or inquirer. The bank shall advise an applicant or inquirer that:

(1) The information regarding race/ national origin, marital status, age and sex in paragraphs (a)(1) and (a)(2) of this section is being requested to enable the Federal Deposit Insurance Corporation to monitor compliance with the Federal Fair Housing and Equal Credit Opportunity Acts which prohibit creditors from discriminating against applicants or inquirers on these bases;

(2) The Federal Deposit Insurance Corporation encourages the applicant or inquirer to provide the information requested;

(3) If the applicant or inquirer refuses to provide the information concerning race/national origin or sex, the bank is required, where possible, to note the information on the basis of visual observations or surnames.

(c) Record retention. Each bank shall retain the records required by § 338.4 for 25 months after the bank notifies an applicant of action taken on an application or after the date of receipt of an inquiry. This requirement applies to records of home loans which are originated by the bank and subsequently sold. The Federal Deposit Insurance Corporation may by written notice extend the retention period.

(d) Substitute system. The recordkeeping provisions of § 338.4 constitute a substitute monitoring program adopted under § 202.13(d) of Regulation B of the Board of Governors of the Federal Reserve System (12 CFR 202.13(d)). A bank collecting the data in compliance with § 338.4 will be in compliance with the recordkeeping requirements of § 202.13 of Regulation

B.

(e) Review of records. Each bank shall make all information collected under paragraph (a) of this section available to for FDIC examiners review upon request.

§ 338.5 Mortgage lending of a controlled entity.

Any bank which refers any applicants or inquirers to a controlled entity and which purchases any home loans originated by the controlled entity, as a condition to transacting any business with the controlled entity, shall require the controlled entity to enter into a written agreement with the bank. The written agreement shall provide that the controlled entity (a) shall comply with the requirements of §§ 338.2, 338.3, and 338.4, (b) shall open its books and records to examination by the Federal Deposit Insurance Corporation, and (c) shall comply with all instructions and orders issued by the Federal Deposit Insurance Corporation with respect to its home loan practices.

INSTRUCTIONS Use the codes listed below in the appropriate columns Indicate by an asterisk (*) if the information recorded is the bank officer's observation rather than bor rower's statement.

339.4 Exemption.

339.5 Records of compliance.

339.6 Notice of special flood hazard and of the availability of Federal disaster relief assistance.

AUTHORITY: Secs. 102(b) and 202(b), Pub. L. 93-234, 87 Stat. 978, 982 as amended by Secs. 704(a) and 703(a), Pub. L. 95-128, 91 Stat. 1145 (42 U.S.C. 4012a (b), 4106(b)); Sec. 1364, Pub. L. 93-383, 88 Stat. 739 (42 U.S.C. 4104a).

SOURCE: 45 FR 56028, Aug. 22, 1980, unless otherwise noted.

al Flood Insurance Act of 1968,1 unless the building or mobile home and any personal property securing the loan is covered for the term of the loan by flood insurance. The amount of the insurance must be at least equal to the outstanding principal balance of the loan or the maximum limit of coverage made available for the particular type of property under the Act, whichever is less.

§ 339.4 Exemption.

Flood insurance shall not be required on any State-owned property that is covered under an adequate policy of self-insurance satisfactory to the Director of the Federal Emergency Management Agency who will publish and periodically revise the list of States falling within the exemption provided by this section.

§ 339.5 Records of compliance.

Each bank shall maintain for all extensions of credit secured by improved real estate or a mobile home sufficient records to indicate the method used by the bank to determine whether the extensions of credit fall within the provisions of § 339.3 or § 339.4 of this part.

§ 339.6 Notice of special flood hazard and of the availability of Federal disaster relief assistance.

(a) Notice Requirement. In making, increasing, extending, or renewing a loan as defined in Section 339.2(b), each bank shall mail or deliver a written notice to the borrower stating: (1) that the property securing the loan is or will be located in an area identified as a flood hazard area (or in lieu of such notification, the bank may obtain satisfactory written assurance from the seller or lessor that the seller or lessor has notified the borrower, before the execution of any agreement for sale or lease, that the property securing the loan is or will be located in such an area); and (2) whether Federal disaster relief assistance will be available for the property if the property is damaged by a flood in a federally de

1 Flood insurance is available to a community when the community is participating in the National Flood Insurance Program.

clared disaster. The notice must be mailed or delivered as soon as feasible but not later than 10 days before the closing of the transaction (or not later than the bank's commitment if any, if the period between commitment and closing is less than 10 days). Each bank shall require the borrower, before closing, to provide the bank with a written acknowledgment that the borrower realizes the property securing the loan is or will be located in an area identified as a flood hazard area and that the borrower has received the required notice regarding Federal disaster relief assistance.

(b) Sample Notices. A bank providing written notice containing language substantially similar to that presented below, as appropriate, within the time limits prescribed in paragraph (a) will be considered to be in compliance with the notice requirements of paragraph (a).

(1) Notice to Borrower of Special Flood Hazard Area. Notice is hereby given to (Name of borrower) that the improved real estate or mobile home described in the attached instrument is or will be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area. This area is delineated on (Name of Community) Flood Insurance. Rate Map (FIRM) or, if the FIRM is unavailable, on the Flood Hazard Boundary Map (FHBM). The area has at least a 1 percent chance of being flooded within any given year. The risk of exceeding the 1 percent chance increases with time periods longer than one year. For example, during the life of a 30-year mortgage, a structure located in a special flood hazard area has a 26 percent chance of being flooded.

(2) Notice to Borrower about Federal Disaster Relief Assistance.-(i) Notice in participating communities. The improved real estate or mobile home securing your loan is or will be located in a community that is now participating in the National Flood Insurance Program. If the property is damaged by flooding in a federally declared disaster, Federal disaster relief assistance may be available. However, such assistance will be unavailable if your

community has been identified as a flood-prone area for one year or longer and is not participating in the National Flood Insurance Program when the assistance is approved. This assistance, usually in the form of a loan with a favorable interest rate, may be available for damages incurred in excess of your flood insurance.

(ii) Notice in nonparticipating communities. The improved real estate or mobile home securing your loan is or will be located in a community that is not participating in the National Flood Insurance Program. This means that the property is not eligible for Federal flood insurance. If the property is damaged by flooding in a federally declared disaster, Federal disaster relief assistance for the property will be unavailable if your community has been identified as a flood-prone area for one year or longer. Such assistance may be available only if, at the time the assistance would be approved, your community is participating in the National Flood Insurance Program or has been identified as a flood-prone area for less than one year.