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Catalog of Federal Domestic Assistance

Program Descriptions

14.132:  Mortgage Insurance: Purchase of Sales-Type Cooperative Housing Units

Popular Name:  213 Sales

Objectives:  To make available, good quality, new housing for purchase by individual members of a housing cooperative.

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

14.132 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Eligible mortgagors include members of nonprofit cooperative ownership housing corporations or trusts which sponsor such housing.

Beneficiary Eligibility:  Individuals/families and nonprofit organizations.

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.

14.132 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 mortgagee. 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:  The term of a commitment to insure may be extended when more time is desired.

Criteria for Selecting Proposals:  Not applicable.

Examples of Funded Projects:  Not applicable.

Range and Average of Financial Assistance:  See Uses and Use Restrictions.

14.132 RELATED PROGRAMS:

• 14.126 Mortgage Insurance: Cooperative Projects;
• 14.163 Mortgage Insurance: Single Family Cooperative Housing.

14.132 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).

14.132 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 14.135.

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

Authorization:  National Housing Act, as amended, Section 213; Housing Act of 1950; Public Law 81-475; 12 U.S.C. 1715(e).

Regulations, Guidelines, and Literature:  HUD-17-F(3) "Let's Consider Cooperatives," no charge; 24 CFR 213, subpart C; HUD Handbook No. 4550.6, "Sales Type Cooperatives."

14.132 INFO CONTACTS:

Regional or Local Office:  Persons are encouraged to contact the Homeownership Center serving their State, 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.)

14.132 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  The maximum amount of the loan is the same as under Section 203(b) - program 14.117, except that the mortgage shall not exceed an amount equal to the portion of the unpaid balance of the blanket mortgage covering the cooperative which is attributable to the dwelling unit. The downpayment is the difference between the maximum loan amount and the purchase price of the home, but in no case less than $200. The mortgage insurance premium is one-half percent of the mortgage amount.

Length and Time Phasing of Assistance:  The mortgage term is 30 years, except 35 years if the mortgagor is unacceptable under a 30-year term.

Uses and Use Restrictions:  HUD insures lenders against loss on mortgages. Insured mortgages may be used to finance purchase by a cooperative member under the sponsorship of a nonprofit cooperative with five or more units. The unit mortgage limit is the same as Section 203(b).

14.132 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.