In order for a mortgage to be eligible under this part, a mortgagor must establish to the satisfaction of the mortgagee that:
(a) After the initial payment of loan proceeds under Sec. 206.25(a), there will be no outstanding or unpaid obligations incurred by the mortgagor in connection with the mortgage transaction, except for repairs to the property required under Sec. 206.47 and mortgage servicing charges permitted under Sec. 206.207(b); and
(b) The initial payment will not be used for any payment to or on behalf of an estate planning service firm. [64 FR 2988, Jan. 19, 1999]
Eligible Mortgagors