24 CFR § 206.32
No outstanding unpaid obligations
February 22, 2021
In order for a mortgage to be eligible under this part, a borrower must establish to the satisfaction of the mortgagee that after the initial payment of loan proceeds under §206.25(a), there will be no outstanding or unpaid obligations incurred by the borrower in connection with the mortgage transaction, except for mortgage servicing charges permitted under §206.207(b) and any future Repair Set Aside established pursuant to §206.19(f)(1); and the initial disbursement will not be used for any payment to or on behalf of an estate planning service firm.