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Catalog of Federal Domestic Assistance

Program Descriptions

14.130:  Mortgage Insurance: Purchase by Homeowners of Fee Simple Title From Lessors

Popular Name:  240

Objectives:  To help homeowners obtain fee-simple title to the property which they hold under long-term leases and on which their homes are located.

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

14.130 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  All homeowners whose homes are located on property which is held under long-term ground leases 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.

14.130 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 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 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:  See Uses and Use Restrictions.

14.130 RELATED PROGRAMS:

None.

14.130 PROGRAM ACCOMPLISHMENTS:

Because of the small number of loans in any given year, the data is included in the number of loans insured under Section 203(b) - program 14.117.

14.130 FINANCIAL AND ADMINISTRATIVE INFO:

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, Section 240, Public Law 90-448, 12 U.S.C. 1715(b).

Regulations, Guidelines, and Literature:  Fact Sheet: Purchase of Fee Simple Title, no charge; 24 CFR 240.1 et seq.

14.130 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.)

14.130 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  The maximum amount of the loan is equal to the difference between the maximum amount prescribed under HUD's Section 203(b) program of mortgage insurance and current indebtedness on the property, subject to the $10,000 loan limitation ($30,000 in Hawaii). A one-half percent mortgage insurance premium is required. The origination charge by the mortgagee varies, but may not normally exceed one percent of the total loan.

Length and Time Phasing of Assistance:  The mortgage term may extend for 20 years.

Uses and Use Restrictions:  HUD insures lenders against loss on loans. These loans may be used to finance the purchase from lessors by homeowners of fee simple title to property which is held under long-term leases and on which their homes are located. For one- to four-family residences, the maximum amount insurable is the cost of purchasing fee-simple title, an amount which, when added to all existing indebtedness related to the property, does not exceed the maximum mortgage amount under Section 203(b), or $10,000 ($30,000 if the property is located in Hawaii) per family unit, whichever is less.

14.130 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.