On September 19, 1995 (60 FR 48596), HUD published an interim rule which amended its multifamily coinsurance regulations. The September 19, 1995 interim rule provided coinsuring lenders with two new options in dealing with defaulted coinsured mortgages. Specifically, the interim rule permitted certain coinsuring lenders to request that HUD endorse defaulted mortgages for full insurance. Additionally, the interim rule established a partial payment of claim procedure which permitted coinsuring lenders to advance funds to cure mortgage delinquencies on a coinsured mortgage and to reduce principal on that mortgage to a level that restored the financial viability of the project. This rule finalizes the policies and procedures set forth in the September 19, 1995 interim rule. Further, this final rule makes several clarifying and streamlining amendments to the September 19, 1995 interim rule.