The requirements of this subpart apply to any request by a mortgagor, as provided by Sec. 245.10, for HUD approval of one or more of the following covered actions:
(a) Conversion of a project from project-paid utilities to tenant-paid utilities, or a reduction in tenant utility allowances.
(b) Conversion of residential units in a multifamily housing project to a nonresidential use or to condominiums, or the transfer of the project to a cooperative housing mortgagor corporation or association. Conversion of a project to a cooperative or of a portion of a project to nonresidential use does not constitute a change of use requiring mortgagee approval.
(c) A partial release of mortgage security. The requirements of this subpart, however, do not apply to any release of property from a mortgage lien with respect to a utility easement or a public taking of such property by condemnation or eminent domain.
(d) Making major capital additions to the project. For the purposes of this subpart, the term ``major capital additions'' includes only those capital improvements that represent a substantial addition to the project. Upgrading or replacing existing capital components of the project does not constitute a major capital addition to the project.