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Catalog of Federal Domestic Assistance

Program Descriptions

14.151:  Supplemental Loan Insurance: Multifamily Rental Housing

Popular Name:  241(a)

Objectives:  To finance repairs, additions and improvements to multifamily projects, group practice facilities, hospitals, or nursing homes already insured by HUD or held by HUD. Major movable equipment for insured nursing homes, group practice facilities or hospitals may be covered by a mortgage under this program.

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

14.151 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Owners of a multifamily project or facility already subject to a mortgage insured by HUD or held by HUD.

Beneficiary Eligibility:  Individuals/families and owners of multifamily projects.

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.

14.151 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  The sponsor will have a preapplication conference with the local HUD Field Office which does multifamily processing to determine the preliminary feasibility of making the proposed improvements before a formal application is submitted. This program is excluded from coverage under OMB Circular No. A-102. 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.

Application Procedure:  The sponsor submits a formal application for review and approval or disapproval through a HUD-approved mortgagee to the local HUD Office. 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 3 to 9 months from the first conference with local HUD Field officials to the issuance of a firm commitment.

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 amount of the loan may not exceed 90 percent of the estimated value of the improvements, additions, or equipment.

14.151 RELATED PROGRAMS:

• 14.116 Mortgage Insurance: Group Practice Facilities;
• 14.129 Mortgage Insurance: Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities.

14.151 PROGRAM ACCOMPLISHMENTS:

HUD insured 26 loans in fiscal year 1999, totaling $264,089,600, for 5,319 units/beds. It is anticipated that insurance levels will remain the same for fiscal year 2000.

14.151 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Type of Assistance:  Guaranteed/Insured Loans.

Obligations:  (Loans insured) Reported under program 14.135.

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

Authorization:  National Housing Act, as amended, Section 241, Public Law 90-448, 12 U.S.C. 1715, Public Law 94-375, 12 U.S.C. 17152-6.

Regulations, Guidelines, and Literature:  24 CFR, 241 et seq.; HUD Handbook 4585.1 "Supplemental Loans for Project Mortgage Insurance," Section 241, no charge.

14.151 INFO CONTACTS:

Regional or Local Office:  All projects are processed in Regional and Local HUD Offices. Persons are encouraged to communicate with the nearest local HUD Field Office listed in the Catalog Address Appendix IV.

Headquarters Office:  Office of Business Products, Office of Insured Multifamily Housing Development, Department of Housing and Urban Development, Washington, DC 20411. Phone: (202) 708-2866. Use the same number for FTS.

(See Appendix IV for more contact info.)

14.151 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  The amount of the loan may not exceed 90 percent of the estimated value of the improvements, additions, or equipment.

Length and Time Phasing of Assistance:  A loan for a project with a HUD-insured or HUD-held mortgage must have a maturity acceptable to HUD.

Uses and Use Restrictions:  HUD insures lenders against loss on loans made either (1) to finance additions and improvements of multifamily housing projects, nursing homes, hospitals and group practice facilities already subject to HUD/FHA insured mortgages or mortgages held by HUD, or (2) to finance energy conservation improvements. The proceeds of a loan involving an insured nursing home, hospital or a group practice facility may also be used to purchase equipment to be used in the operation of such nursing home or facility. The maximum insurable loan for an insured project is an amount which, when added to the outstanding balance of the existing insured mortgage, does not exceed the amount insurable under the program pursuant to which the mortgage covering such project or facility is insured. Where the project is covered by a mortgage held by the Secretary the principal amount of the loan shall be in an amount acceptable to the Secretary.

14.151 POST ASSISTANCE REQUIREMENTS:

Reports:  Any change of the borrower during the period of loan insurance must be approved by HUD. Defaults in meeting the loan terms must be reported. All borrowers are required to submit an annual financial statement to HUD. All approved lenders 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 lender or borrower in order to determine their compliance and conformance with HUD regulations and standards.

Records:  Lenders are required to service and maintain records in accordance with acceptable lending practices of prudent lending institutions and the HUD regulations.