Appraisal. The Fund requires an appraisal report acceptable to the Fund, in its sole discretion, prepared by a qualified appraiser, before approval of any loan for mortgage insurance. An appraisal shall show the: Current market value of the property; and Expected value of the property after completion of the proposed improvements, if any. Types of Insurance Coverage. The Fund may insure a construction loan for a period of 12 months and, depending upon the size and complexity of a project, may renew the insurance for one additional 12-month term. The Fund may insure a permanent loan for up to 30 years, except that, if the Administration elects to fund the project initially from a source other than proceeds of tax-exempt bonds, then the term may not exceed 31 years and 6 months. The Fund may not insure construction advances only, without also insuring the permanent mortgage. Processing and Closing Fees. The sponsor shall pay a processing fee in an amount to be determined in accordance with the schedule of premiums and fees established under Regulation .10 of this chapter. The processing fee shall be paid to the Fund at or before closing. The Fund may waive or postpone the payment of the processing fee at its sole discretion. The sponsor shall pay a closing fee at or before the initial endorsement of the loan for insurance, in an amount to be determined in accordance with the schedule of premiums and fees established under Regulation .10 of this chapter. Insurance Premiums. Permanent Financing. The initial and annual renewal premiums for a mortgage loan for permanent financing shall be determined in accordance with the schedule of premiums and fees established under Regulation .10 of this chapter. When a permanent loan is insured by the Fund following Fund insurance of a construction loan, the annual renewal rather than initial premium for the permanent loan shall be charged. Construction or Rehabilitation Financing. The premium for insurance of a mortgage loan for construction or rehabilitation advances shall be determined in accordance with the schedule of premiums and fees established under Regulation .10 of this chapter. For public lenders, construction insurance may be renewed for one period of 6 months. The renewal premium shall be determined in accordance with the schedule of premiums and fees established under Regulation .10 of this chapter. There may not be refunds or credits for completion of construction in less than the initial 12 months or any renewal period. Refund of Mortgage Premium. The premium, or any portion of it, is not refundable except when an insured mortgage is prepaid in full. In those cases, no further premiums are due and a portion of the premium paid for the year shall be refunded in accordance with the short rate cancellation schedule. Effective Date. The mortgage insurance is effective as of the date the loan is closed if the: Fund has received payment of the required premium and fees; and Lender has certified to the Fund that all conditions of the loan and insurance commitments have been fulfilled. Insurance extends only to the amount of funds disbursed under a construction or rehabilitation loan. Incontestability. Any evidence of insurance issued by the Fund under the Act is conclusive evidence of the eligibility of the mortgage loan for insurance, and this insurance is incontestable, except as to defenses based on fraud or misrepresentation. Loan Assignment. Assignment by the lender of a loan insured by the Fund does not impair insurance coverage, if the: New lender is determined to be an eligible lender under the requirements in Regulation .08 of this chapter; and Fund is advised in writing of the: Assignment, Name of the assignor and its address, Name of the assignee and its address, Proposed date of the assignment, and Policy number of loans to be assigned. Loan servicing by the lender may not be transferred without the approval of the Fund. Insurance Termination. Insurance coverage may be terminated, at the sole option of the Fund and without liability to the Fund, if: The lender requests cancellation; A claim is satisfied by the Fund; The mortgage loan is paid in full; A renewal premium is not paid by the lender or sponsor after receipt of a notice from the Fund; The loan terms are modified without the prior written consent of the Fund; There is any change in the identity of the sponsor without the prior written consent of the Fund; The property is transferred, sold, conveyed, or encumbered other than by operation of law, without the prior written approval of the Fund; or The lender assigns the loan in contravention of the requirements under §G of this regulation.