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This proposed rule would update HUD’s regulation in 24 CFR 200.54 to allow mortgage proceeds resulting from the initial issuance of a mortgage-backed security guaranteed by the Government National Mortgage Association (Ginnie Mae) to be disbursed immediately in a limited amount for projects insured under National Housing Act when the required Borrower equity exceeds the amount of the initial closing construction draw. Many times, the amount of Borrower equity exceeds the amount required at initial closing for the first draw, which presents a timing challenge because disbursing the equity as construction activity occurs will take up to two months and mortgage draw activity must be postponed. A latent conflict exists for a very short period of time when a mortgage lender pools a loan into a mortgage-backed security. The proposed rule will resolve this conflict and provide necessary flexibility for the FHA program.