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Catalog of Federal Domestic Assistance

Program Descriptions

14.121:  Mortgage Insurance: Homes in Outlying Areas

Popular Name:  203(i)

Objectives:  To help people purchase homes in outlying areas.

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

14.121 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  All families are eligible to apply.

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.

14.121 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  This program is excluded from coverage under OMB Circular No. A-102. 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 No. 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 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, the maximum amount of the loan is 97 percent of the first $25,000 of estimated value (including total allowable closing costs) plus 95 percent of the remainder.

14.121 RELATED PROGRAMS:

• 10.410 Very Low to Moderate Income Housing Loans;
• 14.117 Mortgage Insurance: Homes.

14.121 PROGRAM ACCOMPLISHMENTS:

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

14.121 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 14.117.

Budget Account Number:  86-4587-0-3-371.

Authorization:  National Housing Act, as amended, Section 203(i), Public Law 73-479, 12 U.S.C. 1709, 1715(b).

Regulations, Guidelines, and Literature:  "Guide To Single Family Home Mortgage Insurance," no charge; 24 CFR 203.18(d).

14.121 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.)

14.121 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  The property's sales price (or appraised value, if less) exclusive of any borrower paid closing costs multiplied by a percent that is determined by the sales price or value, if less, and the average closing costs for the State. This determines the maximum mortgage that FHA will ensure, provided the mortgagor makes a cash investment of at least 3% into the property, which may include closing costs. The downpayment is the difference between the maximum loan and the purchase price of the home. In addition to the downpayment, the purchaser must pay for all items of prepaid expense. As of July 1, 1991, risk-based mortgage insurance premiums will be collected including: 1) an up-front premium which may be financed and 2) a periodic premium which is paid monthly. The loan origination charge by the mortgagee varies, but may not exceed one percent of the total mortgage (minus the mortgage insurance premium, if being financed). Mortgagors may be charged appraisal and inspection fees in accordance with fee schedules established by HUD.

Length and Time Phasing of Assistance:  The mortgage term may extend for 30 years, except 35 years if the mortgagor is unacceptable under a 30-year term and the property was constructed subject to HUD or VA inspection.

Uses and Use Restrictions:  HUD insures lenders against loss on mortgage loans. These loans may be used to finance the purchase of proposed, under construction, or existing one-family nonfarm housing, or new farm housing on two and one-half or more acres adjacent to an all-weather public road. The maximum insurable loan for an occupant mortgagor on a one-family home is 75 percent of the Section 203(b) limit.

14.121 POST ASSISTANCE REQUIREMENTS:

Reports:  Defaults in meeting the mortgage terms must be reported. 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 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.