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Grant Community.com Catalog of Federal Domestic Assistance Program Descriptions |
CATALOG OF FEDERAL DOMESTIC
ASSISTANCE
14.112: Mortgage Insurance for Construction or Substantial Rehabilitation
of Condominium Projects
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| PROGRAM AND AWARD | FINANCIAL AND INFORMATION CONTACTS |
| ELIGIBILITY REQUIREMENTS | FINANCIAL AND ADMINISTRATIVE INFO. |
| APPLICATION AND AWARD PROCESS | INFORMATION CONTACTS |
| RELATED PROGRAMS | ASSISTANCE CONSIDERATIONS |
| PROGRAM ACCOMPLISHMENTS | POST ASSISTANCE REQUIREMENTS |
Applicant Eligibility: Private profit-motivated developers, public bodies, and other sponsors who meet FHA requirements for mortgagors.
Beneficiary Eligibility: All families are eligible to purchase condominium units. Mortgages for individual units may be insured under Section 234(c). See program 14.133.
Credentials/Documentation: Documentation regarding the characteristics of the property and the qualifications of the mortgagor are assembled by the mortgagee and submitted with the application. This program is excluded from coverage under OMB Circular No. A-87.
Preapplication Coordination: The sponsor will have an initial conference with the local HUD Field Office to determine the preliminary feasibility of the project before an application is submitted. This program is excluded from coverage under OMB Circular No. A-102. An environmental assessment is required. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.
Application Procedure: The sponsor submits a formal mortgage insurance application through a HUD approved mortgagee to the local HUD Office. This program is excluded from coverage under OMB Circular No. A-110.
Award Procedure: The local HUD Field Office reviews the application to determine whether the proposal is feasible. Considerations include market need, zoning, architectural merits, capabilities of sponsors, availability of community resources, etc. If the project meets program requirements, the HUD Field Office issues the lender a commitment to insure the project mortgage.
Deadlines: Deadlines are established on a case-by-case basis by the local HUD field office.
Range of Approval/Disapproval Time: Processing time, depending upon the degree of preparation by the sponsor, will range from 3 to 6 months from the first conference with HUD to the issuance of a firm commitment; however in insurance upon completion, modified form, using simplified processing, the approximate time is only 4 to 6 weeks.
Appeals: If an application for mortgage insurance is refused, HUD will state the reasons for the refusal. If reapplication is desired, the applicant may modify the application and reapply.
Renewals: The term of a commitment to insure may be extended under certain circumstances when more time is required.
Criteria for Selecting Proposals: Not applicable.
Examples of Funded Projects: Not applicable.
Range and Average of Financial Assistance: The maximum amount of the loan is 90 percent of the replacement cost, the sum of the statutory per unit limits, or sum of the unit mortgage amounts, whichever is less. The program has statutory per unit mortgage limits which vary according to the size of the unit, the type of structure, and the location of the project. There are also loan-to-replacement cost and debt service limitations.
No loans were insured in fiscal year 1999 and none are anticipated in fiscal year 2000.
Federal Agency: HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Type of Assistance: Guaranteed/Insured Loans.
Obligations: (Mortgages insured) FY 99 $0; FY 00 est $0; and FY 01 est $0.
Budget Account Number: 86-4077-0-3-371.
Authorization: National Housing Act, as amended; Housing Act of 1964, as amended, Section 234(d), Public Law 88-560; Section 234(c), Public Law 90-448, 82 Stat. 476, 507, 1969; Section 234(c), Public Law 91-152, 83 Stat. 379, 384, 12 U.S.C. 1715(y).
Regulations, Guidelines, and Literature: "HUD Mortgage Insurance Handbook No. 4580.1 For Condominium Housing Insured under Section 234 (d) of the National Housing Act"; "Bibliography of Economic, Financial and Legal Factors-Condominium and Cooperative Housing" (For sale by Superintendent of Documents, GPO, 45~); HUD-321-F, 24 CFR-234; "HUD Mortgage Insurance Handbook No. 4265.1, Home Mortgage Insurance-Condominium Units, Section 234(c)", no charge.
Regional or Local Office: All projects are processed in local HUD Offices. Persons are encouraged to communicate with the nearest local HUD Office. See Catalog Address Appendix IV for a list of offices.
Headquarters Office: Office of Business Products Department of Housing and Urban Development, Washington, DC 20410. Phone: (202) 708-2866. Use the same number for FTS.
(See Appendix IV for more contact info.)
Formula and Matching Requirements: The maximum amount of the loan is 90 percent of the replacement cost, the sum of the statutory per unit limits, or sum of the unit mortgage amounts, whichever is less. The combined HUD site appraisal and market analysis application fee and commitment fees are $3.00 per $1,000 of the mortgage amount, and the HUD inspection fee may not exceed $5.00 per $1,000 of the mortgage amount, except that in all cases the combined application, commitment and inspection fee shall aggregate no less than $65 per unit for new construction or $50 per unit in rehabilitation cases. The mortgage insurance premium is one-half percent of the mortgage amount.
Length and Time Phasing of Assistance: The maximum mortgage term is 40 years, or not in excess of three-quarters of the remaining economic life, whichever is less, if the project remains a rental.
Uses and Use Restrictions: HUD insures lenders against loss on mortgage loans. These loans may be used to finance the construction or rehabilitation of multifamily housing structures by a sponsor intending to sell individual units as condominiums, which also would be eligible for the benefits of mortgage insurance under Section 234(c). The program has statutory per unit mortgage limits which vary according to the size of the unit, the type of structure, and the location of the project. There are also loan-to-replacement cost and debt service limitations.
Reports: Any change of the mortgagor during the period of mortgage insurance must be approved by HUD. Defaults in meeting the mortgage terms must be reported. All mortgagors are required to submit an annual financial statement to HUD. All approved mortgagees at any time upon request by HUD must furnish a copy of their latest financial statement.
Audits: The Department of Housing and Urban Development reserves the right to audit the accounts of either the mortgagee or mortgagor in order to determine their compliance and conformance with FHA regulations and standards.
Records: Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the FHA regulations.
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Last Updated, November, 2000
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