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Catalog of Federal Domestic Assistance

Program Descriptions

14.120:  Mortgage Insurance: Homes for Low and Moderate Income Families

Popular Name:  221(d)(2)

Objectives:  To make homeownership more readily available to families displaced by a natural disaster, urban renewal, or other government actions and to increase homeownership opportunities for low income and moderate income families.

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

14.120 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  All families are eligible to apply. Displaced families qualify for special terms. Certification of eligibility as a displaced family is made by the appropriate local government agency.

Beneficiary Eligibility:  Individuals/families.

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.

14.120 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  None. This program is excluded from coverage under E.O. 12372.

Application Procedure:  Application is submitted for review and approval or disapproval to the local HUD Field Office through a HUD-approved lending institution. This program is excluded from coverage under OMB Circular Nos. A-102 and A-110.

Award Procedure:  See Application Procedure.

Deadlines:  None.

Range of Approval/Disapproval Time:  Varies.

Appeals:  HUD will state the reasons for refusing an application. The applicant may reapply subject to the concurrence of the lender.

Renewals:  Not applicable.

Criteria for Selecting Proposals:  Not applicable.

Examples of Funded Projects:  Not applicable.

Range and Average of Financial Assistance:  For most families purchasing single family units, the maximum amount of the loan is 97 percent of the appraised value, and closing costs.

14.120 RELATED PROGRAMS:

• 14.117 Mortgage Insurance: Homes;
• 14.123 Mortgage Insurance: Housing in Older, Declining Areas.

14.120 PROGRAM ACCOMPLISHMENTS:

Because only a small numbers of loans are insured under this program, annual activity is not tracked.

14.120 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Type of Assistance:  Guaranteed/Insured Loans.

Obligations:  (Mortgages insured) Reported under program 14.133.

Budget Account Number:  86-4077-0-3-371.

Authorization:  National Housing Act, as amended, Section 221 (d) (2), Public Law 83-560, 12 U.S.C. 1715(b), 1715(1).

Regulations, Guidelines, and Literature:  Fact Sheet: "Homes for Low and Moderate Income Families (Mortgage Insurance)," no charge; 24 CFR 221.1 et seq.

14.120 INFO CONTACTS:

Regional or Local Office:  Persons are encouraged to contact the Homeownership Center serving their State, or the nearest local HUD Office. See Catalog Address Appendix IV for a list of offices.

Headquarters Office:  None.

(See Appendix IV for more contact info.)

14.120 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  For most families purchasing single family units, the maximum amount of the loan is 97 percent of the appraised value, and closing costs. The down payment is the difference between the maximum loan amount and the purchase price of the home plus prepaid expenses. For displaced families the down payment required is somewhat smaller, but in no event less than $200. A one-half percent mortgage insurance premium is required. The loan origination charge by mortgagees varies, but may not normally exceed 1 percent of the total mortgage. Mortgagors may be charged appraisal and inspection fees in accordance with fee schedules established by HUD. This program has maintenance of effort (MOE) requirements, see funding agency for further details.

Length and Time Phasing of Assistance:  The mortgage term may extend for 30 years (35 or 40 years if the mortgagor is unacceptable under a 30-year term).

Uses and Use Restrictions:  HUD insures lenders against loss on mortgage loans. These loans may be used to finance the purchase of proposed or existing low-cost one- to four-family housing or the rehabilitation of such housing. Maximum insurable loans for an occupant mortgagor are $31,000 for a single family home, or up to $36,000 for a single family home in high cost areas. For a large family (five or more persons) the limits are $36,000 for a single-family home, or up to $42,000 for a single-family home in high cost areas. Higher mortgage limits apply for two- to four-family housing.

14.120 POST ASSISTANCE REQUIREMENTS:

Reports:  Defaults in meeting the mortgage terms must be reported. All approved mortgagees at any time upon request by FHA must furnish a copy of their latest financial statement.

Audits:  The Department of Housing and Urban Development reserves the right to audit the account of the mortgagee to determine its compliance and conformance with HUD regulations and standards.

Records:  Mortgagees are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the HUD regulations.