24 CFR § 206.209 - Prepayment.

---
identifier: "/us/cfr/t24/s206.209"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "24 CFR § 206.209 - Prepayment."
title_number: 24
title_name: "Housing and Urban Development"
section_number: "206.209"
section_name: "Prepayment."
chapter_name: "OFFICE OF ASSISTANT SECRETARY FOR HOUSING—FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT"
subchapter_number: "B"
subchapter_name: "MORTGAGE AND LOAN INSURANCE PROGRAMS UNDER NATIONAL HOUSING ACT AND OTHER AUTHORITIES"
part_number: "206"
part_name: "HOME EQUITY CONVERSION MORTGAGE INSURANCE"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "12 U.S.C. 1715b, 1715z-20; 42 U.S.C. 3535(d)"
regulatory_source: "82 FR 7117, Jan. 19, 2017, unless otherwise noted."
cfr_part: "206"
---


# 206.209 Prepayment.

(a) *No charge or penalty.* The borrower may repay a mortgage in full or prepay a mortgage in part without charge or penalty at any time, regardless of any limitations on repayment or prepayment stated in a mortgage.

(b) *Insurance and condemnation proceeds.* If insurance or condemnation proceeds are paid to the mortgagee, the principal limit and the outstanding loan balance shall be reduced by the amount of the proceeds not applied to restoration or repair of the damaged property.

(c) Funds received from a partial prepayment shall be applied in accordance with the Note.