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Grant Community.com Catalog of Federal Domestic Assistance Program Descriptions |
CATALOG OF FEDERAL DOMESTIC
ASSISTANCE
14.155: Mortgage Insurance for the Purchase or Refinancing of
Existing Multifamily Housing Projects
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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: Mortgagors may be either private or public as defined in Section 207.17 of the Code of Federal Regulations (CFR 24). The property must consist of not less than 5 living units and must meet the following criteria: (a) Three years must have elapsed from the later of the date of completion of the project construction or substantial rehabilitation, or beginning of occupancy to date of application for mortgage insurance; and (b) remaining economic life must be long enough to permit at least a 10-year mortgage term.
Beneficiary Eligibility: All persons are eligible to occupy such projects subject to normal occupancy restrictions.
Credentials/Documentation: Documentation regarding the characteristics of the property and the qualifications of the purchaser or existing mortgagor in refinance projects are assembled by the mortgagee and submitted with the application. Management plan must be submitted at time of application for commitment. This program is excluded from coverage under OMB Circular No. A-87.
Preapplication Coordination: Before the application is filed, the sponsor should have a conference with local HUD field office Staff. This program is excluded from coverage under OMB Circular No. A-102 and E.O. 12372.
Application Procedure: The applicant will submit a formal application for conditional or firm commitment, through a HUD approved mortgagee. This program is excluded from coverage under OMB Circular No. A-110.
Award Procedure: The local HUD field office reviews the application to determine proposal eligibility. If the project meets program requirements, the local HUD field office issues the commitment to the lender to insure the project.
Deadlines: Deadlines are established on a case-by-case basis.
Range of Approval/Disapproval Time: Processing time, depending on the degree of preparation of the sponsor, will range from 3 to 6 months.
Appeals: If an application for mortgage insurance is refused, HUD will state the reasons for refusal.
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: The estimated cost of required repairs may not exceed 15 percent of the estimated value after repairs or $6,500 per unit, adjusted by a high cost factor, whichever is greater and may not involve the replacement of more than one major system.
In fiscal year 1999, HUD insured 165 loans (19,054 units).
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, Section 223(f), as amended; Housing and Community Development Act of 1974, as amended, Public Law 93-383.
Regulations, Guidelines, and Literature: Fact Sheet, Section 223(f) Mortgage Insurance; 24 CFR 207.32a, HUD Handbook 4565.1, Mortgage Insurance for the purchase or Refinancing of Existing Multifamily Housing Projects, Section 223(f).
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 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: The maximum amount of the loan will not be in excess of 85 percent of the Commissioner's estimate of value. For the first year there is a 1 percent mortgage insurance premium; thereafter, a .5 percent mortgage insurance premium will be applied.
Length and Time Phasing of Assistance: The mortgage term should not be less than 10 years nor should it exceed the lesser of 35 years or 75 percent of the estimated remaining economic life of the physical improvements.
Uses and Use Restrictions: HUD insures lenders against loss on mortgage loans. These loans may be used to purchase or refinance existing multifamily housing projects. Only rental housing projects not requiring substantial rehabilitation are acceptable under this section. The estimated cost of required repairs may not exceed 15 percent of the estimated value after repairs or $6,500 per unit, adjusted by a high cost factor, whichever is greater and may not involve the replacement of more than one major system. 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 term 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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