Section 1005.715 - Application of Borrower payments(a) Servicer shall comply with § 1005.509 with respect to the application of Borrower payments. The Servicer shall apply the payments in the following order: (1) Escrow items, including monthly payments of the Annual Loan Guarantee Fee, rents, taxes, special assessments, and if required, flood insurance, fire, and other hazard insurance premiums;(2) Interest accrued on the Section 184 Guaranteed Loan;(3) Principal of the Section 184 Guaranteed Loan; and(4) Late charges, if permitted under the terms of the Section 184 Guaranteed Loan and subject to such conditions as HUD may prescribe.(b) Partial Payments shall be applied in accordance with § 1005.723 .