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Grant Community.com Catalog of Federal Domestic Assistance Program Descriptions |
CATALOG OF FEDERAL DOMESTIC
ASSISTANCE
14.135: Mortgage Insurance: Rental and Cooperative Housing for
Moderate Income Families and Elderly, Market Interest Rate
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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: Public, profit-motivated sponsors, limited distribution, nonprofit cooperative, builder-seller, investor-sponsor, and general 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. There are no income limits. Project may be designed specifically for the elderly and handicapped.
Credentials/Documentation: A nonprofit sponsor must receive from HUD a certification of eligibility before submitting a formal project application. 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.
Preapplication Coordination: The sponsor will have 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: Following HUD's issuance of a SAMA letter (new construction) or Feasibility Letter (substantial rehabilitation) the sponsor submits a formal mortgage insurance application through a HUD-approved mortgagee to the local HUD field office which does multifamily processing. This program is excluded from coverage under OMB Circular No. A-110.
Award Procedure: The local HUD Field Office reviews the application to determine whether the proposal is feasible. Considerations include market need, zoning, architectural merits, capabilities of sponsors, availability of community resources, etc. If the project meets program requirements, the HUD Field Office issues the lender a commitment to insure the project 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 3 to 6 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 under certain circumstances when more time is required.
Criteria for Selecting Proposals: Not applicable.
Examples of Funded Projects: Not applicable.
Range and Average of Financial Assistance: Section 221(d)(3): For general and limited distribution mortgagors, the maximum amount of the loan is equal to 90 percent of the estimated replacement cost. For nonprofit, public and cooperative mortgagors the maximum amount of the loan may be up to 100 percent of the estimated replacement cost in most cases. Section 221(d)(4): The maximum amount of the loan is equal to 90 percent of the estimated replacement cost.
In fiscal year 1999, HUD insured 198 projects with 32,264 units.
Federal Agency: HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Type of Assistance: Guaranteed/Insured Loans.
Obligations: (Mortgages insured) FY 99 $4,633,000,000; FY 00 est $4,615,000,000; and FY 01 est $5,449,000,000.
Budget Account Number: 86-4077-0-3-371.
Authorization: National Housing Act, as amended, Section 221, Public Law 86-372, 12 U.S.C. 1715(1).
Regulations, Guidelines, and Literature: 24 CFR 221 et seq.; Fact Sheet: Rental Housing for Moderate Income Families, no charge; HUD Handbook 4560.2, Mortgage Insurance for Moderate-Income Housing Projects, Section 221 (d)(4), no charge; HUD Handbook 4560.1, Section 221(d)(3) Market Interest Rate for Project Mortgage Insurance, no charge; HUD Handbook 4560.3, Mortgage Insurance for Single Room Occupancy Projects; no charge; HUD Handbook 4550.3; Basic Cooperative Housing Insurance Handbook, no charge.
Regional or Local Office: Persons are encouraged to communicate with the nearest local HUD Office listed in the Catalog Address Appendix IV.
Headquarters Office: Office of Business Products, 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: Section 221(d)(3): For general and limited distribution mortgagors, the maximum amount of the loan is equal to 90 percent of the estimated replacement cost. For nonprofit, public and cooperative mortgagors the maximum amount of the loan may be up to 100 percent of the estimated replacement cost in most cases. Section 221(d)(4): The maximum amount of the loan is equal to 90 percent of the estimated replacement cost. All projects: The mortgage insurance premium is one-half percent of the mortgage amount. The HUD application processing and commitment fees are $3 per $1,000 of the mortgage amount. The HUD inspection fee may not exceed $5 per $1,000 of the mortgage amount.
Length and Time Phasing of Assistance: The maximum 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 for market rate rental projects. Insured mortgages may be used to finance construction or rehabilitation of or rental or cooperative detached, semidetached, row, walkup, or elevator-type rental housing containing 5 or more units. The program has statutory 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-replacement cost 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 an annual financial statement to HUD. All approved mortgagees must furnish a copy of their latest financial statements at any time upon request by HUD.
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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