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Grant Community.com Catalog of Federal Domestic Assistance Program Descriptions |
CATALOG OF FEDERAL DOMESTIC
ASSISTANCE
14.134: Mortgage Insurance: Rental Housing
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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: Eligible mortgagors include investors, builders, developers, and others who meet HUD requirements for mortgagors.
Beneficiary Eligibility: All families are eligible to occupy dwellings in a structure whose mortgage is insured under the program, subject to normal tenant selection.
Credentials/Documentation: Documentation regarding the characteristics of the property and qualifications of the mortgagor are submitted with the application. This program is excluded from coverage under OMB Circular No. A-87.
Preapplication Coordination: The sponsor has an initial conference with the local HUD field office which does multifamily processing to determine the preliminary feasibility of the project before a site appraisal and market analysis (SAMA) application (for new construction projects) or feasibility application (for substantial rehabilitation projects) is submitted. An environmental assessment is required for this program. 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. This program is excluded from coverage under OMB Circular No. A-102.
Application Procedure: The sponsor submits an application for a SAMA or feasibility letter. The application for conditional and firm commitment are submitted by the sponsor through a HUD approved mortgagee. Applications are submitted to the local HUD field Office which does multifamily processing. This program is excluded from coverage under OMB Circular No. A-110.
Award Procedure: If the project meets program requirements, the local HUD Field Office issues a commitment to the lender to insure the 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 9 to 12 months.
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 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 equal to 90 percent of the estimated value.
No loans have been insured under this Section in many years, since Section 221(d)(4) - Program 14.135 is more advantageous to the borrower and lender.
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 207, Public Law 75-424, 12 U.S.C. 1713.
Regulations, Guidelines, and Literature: 24 CFR 207 et seq.; Fact Sheet: Section 207 Rental Housing, no charge; HUD Handbook 4400.1, Project Mortgage Insurance Basic Section 207 Instructions, no charge.
Regional or Local Office: Persons are encouraged to communicate with the nearest local HUD Field Office listed in the Catalog Address Appendix IV.
Headquarters Office: Office of Business Projects, 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 equal to 90 percent of the estimated value. The mortgage insurance premium is one-half percent of the mortgage amount. The total HUD application processing and commitment fees are $5 per $1,000 of the mortgage amount. Only $1 per $1,000 is required at the initial application for SAMA. No fee is required with a feasibility application for a rehabilitation project. The HUD inspection fee may not exceed $5 per $1,000 of the mortgage amount.
Length and Time Phasing of Assistance: The mortgage term is 40 years, or not in excess of three-fourths of the remaining economic life, whichever is less.
Uses and Use Restrictions: HUD insures lenders against loss on mortgages. Insured mortgages may be used to finance the construction or rehabilitation of rental detached, semidetached, row, walk-up, or elevator type structures with 5 or more units. 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-value 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 annual financial statements to HUD. All approved mortgagees at any time upon request by HUD must furnish copies of their latest financial statements.
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 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.
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Last Updated, November, 2000
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