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Content provided by the Catalog of Federal Domestic Assistance
14.108 Rehabilitation Mortgage Insurance

FEDERAL AGENCY:

HOUSING, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

AUTHORIZATION:

National Housing Act, as amended, Section 203(k), Public Law 95-557, 12 U.S.C. 1709, 1715(k).
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To help families repair or improve, purchase and improve, or refinance and improve existing residential structures more than one year old.

TYPES OF ASSISTANCE:

Guaranteed/Insured Loans.
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USES AND USE RESTRICTIONS:

HUD insures lenders against loss on loans. These loans may be used to rehabilitate an existing 1 to 4 unit dwelling in one of four ways: (1) Purchase a structure and the land on which the structure is located and rehabilitate it; (2) purchase a structure on another site, move it onto a new foundation on the mortgaged property and rehabilitate it; (3) refinance the existing indebtedness and rehabilitate such a structure; or (4) rehabilitate such a structure. Maximum insurable mortgage loans for an occupant mortgagor are the same as prescribed for Section 203(b) - Program 14.117. Rehabilitation cost must be at least $5,000.

ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:   Individual purchasers are eligible to apply.

Beneficiary Eligibility:   Individual purchasers.

Credentials/Documentation:   Documentation regarding the characteristics of the property and the qualifications of the borrower are assembled by the lender and submitted with the application. This program is excluded from coverage under OMB Circular No. A-87.

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APPLICATION AND AWARD PROCESS:
Pre-application Coordination:   None. This program is excluded from coverage under E.O. 12372.

Application Procedure:   Application is submitted 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:   The lender or HUD will state the reason for refusing an application. The applicant may reapply subject to concurrence of the lender.

Renewals:   Not applicable.

ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:   The maximum loan amount is the same as Section 203(b) - Program 14.117. Value is determined by either (a) the value of the property before rehabilitation plus the cost of rehabilitation, or (b) 110 percent of the appraised value of the property after rehabilitation, whichever is less. The loan may be subordinated to an existing first mortgage, or there may be insured advances during the rehabilitation period if the loan is a first lien. The lender may charge the greater of $350 or an additional 1-1/2 percent supplemental loan origination fee for the portion of the loan which is allocated to rehabilitation when there are insured advances. Also, the lender may charge the mortgagor fees in the nature of discounts.

Length and Time Phasing of Assistance:   The mortgage term may extend for 30 years.

POST ASSISTANCE REQUIREMENTS:

Reports:   Defaults in meeting the mortgage terms must be reported. All approved mortgagees at any time upon request by FHA 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 FHA regulations and standards.

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

FINANCIAL INFORMATION:

Account Identification:   86-0148-0-1-604; 86-4077-0-3-371.

Obligations:   (Loans insured) FY 01 $995,129,475; FY 02 est $1,395,800,109; and FY 03 est $1,395,000,000.

Range and Average of Financial Assistance:  
No Data Available.

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PROGRAM ACCOMPLISHMENTS:
The Department expects to endorse an estimated 9000 loans in 2002.

REGULATIONS, GUIDELINES, AND LITERATURE:

HUD Residential Rehabilitation Program, no charge; Fact Sheet: Rehabilitation Mortgage Insurance, no charge. 24 CFR 203.50.

INFORMATION CONTACTS:

Regional or Local Office:   None. For additional information, individuals are encouraged to contact the FHA Resource Center by phone at 1-800-CALLFHA (1-800-225-5342), by email at answers@hud.gov or visit the FHA Resource Center site at http://portal.hud.gov/hudportal/HUD?src=/FHAFAQ

Headquarters Office:   Wanda L. Sampedro 451 7th Street, SW, Washington, District of Columbia 20410 Email: answers@hud.gov Phone: (800) 225-5342

Web Site Address:  
https://portal.hud.gov/hudportal/HUD

EXAMPLES OF FUNDED PROJECTS:

Not applicable.

CRITERIA FOR SELECTING PROPOSALS:

Not applicable.

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