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Catalog of Federal Domestic Assistance

Program Descriptions

14.140:  Mortgage Insurance: Special Credit Risks

Popular Name:  Section 237

Objectives:  To make homeownership possible for low and moderate-income families who cannot meet normal HUD requirements.

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

14.140 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Only families who do not qualify for homeownership under regular HUD credit standards are eligible.

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.

14.140 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  Counseling assistance must be obtained by the applicant mortgagor from a HUD-approved counseling agency. Information regarding availability of counseling assistance is available through local HUD Field Offices. A limited listing of the names, addresses and phone numbers of counseling agencies within caller-selected ZIP Code areas is available by calling toll-free phone number 1-800-569-4278. 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 to the local HUD Field Office for review and approval 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:  See Uses and Use Restrictions.

14.140 RELATED PROGRAMS:

• 14.117 Mortgage Insurance: Homes.

14.140 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).

14.140 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 237 (excepting paragraph (e), Public Law 90-448, 12 U.S.C. 1715(b).

Regulations, Guidelines, and Literature:  "Credit Assistance and Counseling for Low and Moderate Income Home Purchasers (Section 237)," HUD Handbook FHA 4440.5; no charge; 24 CFR 237.1 et seq.

14.140 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.)

14.140 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  The downpayment required is determined by the requirements for the HUD program under which the application originates. Application may be originated under most HUD home mortgage programs.

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.

Uses and Use Restrictions:  HUD insures lenders against loss on mortgage loans. These loans may be used to purchase or refinance one-to-four family homes or condominiums. The maximum insurable mortgage is $18,000 ($21,000 in high cost areas).

14.140 POST ASSISTANCE REQUIREMENTS:

Reports:  Defaults in meeting the mortgage terms must be reported. All approved mortgagees (lenders) 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.