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Catalog of Federal Domestic Assistance

Program Descriptions

14.163:  Mortgage Insurance: Single Family Cooperative Housing

Popular Name:  203(n)

Objectives:  To provide insured financing for the purchase of the Corporate Certificate and Occupancy Certificate for a unit in a cooperative housing project. Ownership of the corporate certificate carries the right to occupy the unit located within the cooperative project.

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

14.163 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Potential owner-occupant mortgagors are eligible to apply.

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.

14.163 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  None. This program is excluded from coverage under E.O. 12372.

Application Procedure:  Application is submitted for review and approval or disapproval to the local HUD field office through a HUD approved lending institution. This program is excluded from coverage under OMB Circular Nos. A-102 and 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.

14.163 RELATED PROGRAMS:

• 14.117 Mortgage Insurance: Homes;
• 14.132 Mortgage Insurance: Purchase of Sales-Type Cooperative Housing Units.

14.163 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).

14.163 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Type of Assistance:  Guaranteed/Insured Loans.

Obligations:  (Mortgages insured) Reported under program 14.117.

Budget Account Number:  86-4587-0-3-371.

Authorization:  National Housing Act, as amended, Section 203(n); Emergency Home Purchase Assistance Act of 1974, Public Law 93-449, 88 Stat. 1364.

Regulations, Guidelines, and Literature:  HUD 4240.3, Section 203(n) Application Through Insurance (Single Family) no charge; 24 CFR 203.43c and 203.437.

14.163 INFO CONTACTS:

Regional or Local Office:  Persons are encouraged to contact the Homeownership Center serving their State, or the nearest HUD Office. See Catalog Address Appendix IV for a list of Offices.

Headquarters Office:  None.

(See Appendix IV for more contact info.)

14.163 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  For most families, the maximum amount of the loan is the same as under 203(b) - program 14.117. The unit's share of the project mortgage is deducted from the maximum potential amount to determine the maximum Section 203(n) loan. As of July 1, 1991, risk-based mortgage insurance premiums will be collected including: 1) an up-front premium which may be financed and 2) a periodic premium which is paid monthly. The origination charge by the mortgagee varies, but may not exceed one percent of the total mortgage amount.

Length and Time Phasing of Assistance:  The maximum mortgage term is 30 years or the remaining term of the blanket mortgage covering the cooperative development, whichever is less.

Uses and Use Restrictions:  HUD insures lenders against loss on mortgage loans. These insured loans may be used to assist individuals or families in acquiring corporate certificates and occupancy certificates in a cooperative housing project that is covered by a blanket mortgage insured under the National Housing Act. The maximum insurable mortgage loan is limited to the maximum limit under Section 203(b) minus the portion of the unpaid balance of the project mortgage attributable to the dwelling unit.

14.163 POST ASSISTANCE REQUIREMENTS:

Reports:  Defaults in meeting the mortgage terms must be reported. Any approved mortgagee, at any time upon request by HUD, must furnish a copy of its 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.